Richard Grellman: A chat with the outgoing head of the ASP

Stu Nettle picture
Stu Nettle (stunet)

"I don't really know what we're doing here, Stuart."

This wasn't the interview I'd intended it to be. Three days before those words were spoken I'd arranged to meet with Richard Grellman, Executive Chairman and acting head of the ASP. It was an easy interview to secure and I quickly found out why; the following day Paul Speaker of ZoSea was announced as new CEO of the ASP and Grellman was relinquished of his top dog duties.

"ZoSea are going to do their launch," said Grellman, "and announce their plans when they're ready, and speculation by me or anybody else doesn't help them and it may be wildly inaccurate." 

I continued with the the interview anyway...

Swellnet: How involved in their plans have you been? Not at all.

You were the head of the ASP? Yeah. I was the executive chairman and I spent all last year working with Zosea to see whether or not the transfer of the business to them might make sense from the point of view of the commercial aspects of the sport. Also, what might be best for the stakeholders. And, at the end of the day, our stakeholders – the association and its members voted very convincingly to go with Paul. So he's building his plans for 2014, when they're ready he'll unfurl what they look like.

Why did you have so much trust in Paul? Trust comes from here [points to stomach]. You have to form a judgement whether or not you feel comfortable with these guys. Whether their values look like your values. Whether you think they will respect and honour the heritage they're taking over. And I think they're good guys, they've tried very hard to understand the historical aspects of surfing and we ended up feeling comfortable.

The current state of the surf industry must've factored into that decision as well. Look, we have, and had, a full tour this year. The women's are still a bit short. We were on notice for a couple of events like New York and Jeffrey's Bay and The Search which are going to take another year off. But, you know, it was an incredible year to find another world champion. We can all read the newspapers and read of the plight some of our long-time supporters find themselves in, but I've been around the finance sector a long time and don't pay much attention – with great respect – to what journalists say. It's usually wrong, it's usually headline driven to sell publications. Who would know? I'd be the last to know what the true state of some of those companies is and I wouldn't rely on a headline to tell me.

You were the head of the ASP since November 2011 and you weren't privy to the state of companies that bought licenses from you? Not at all. They're public companies, I'd be as privy as you would be.

So you don't feel you know any more about them than the average punter on the beach? No, and I'd never expect to. Just like other public companies where I'm on the board, I say to people who want to know whats going on, "It's all out there," because we're obliged to let the public know what we think it needs to know.

When did Zosea first make contact with the ASP? Twelve months ago, at the board meeting here in February. They made a very high level vision statement on what they'd like to do with the sport and sought to get permission to enter into an exclusive due diligence period. That was granted because we quite liked the way they articulated their vision.

But it wasn't granted straight away though was it? Yes it was. Non-exclusive.

So it's been a year of negotiations? Yes, it began in February, and they were looking and they acquired exclusivity for a period. Up until that point we were talking to a few clients. In May we granted ZoSea exclusivity for a ninety day period for them to do deep due diligence. Knowing that they were the only ones allowed into the lower levels of figures that we hadn't previously provided to anyone. At the end of that period of exclusivity we could'nt really get that support that we needed to agree with it.

From who...? From the stakeholders - companies and surfers. There's five voting members of each and they're the only members. You know, I'm not even a member in terms of making the final decision about the ASP.

Why did they reject it first time around? It wasn't so much rejected, they just said, "No, you need to try harder." We had Managing Director of Bank of America Merrill Lynch, Kevin Skelton, who was acting for us in the commercial dialogue on a pro bono basis and he was just helping open up the issues and seeing whether or not we could get a bit more here or there. ZoSea were very accommodating and very flexible, they came back with a refined proposal about six weeks weeks later and there were still some issues around the edges that people weren't sure about.

Their final proposal was put to a board meeting in France last October and the board looked at it and got significantly along the road of comfort passing a resolution recommending it to the members - by a high majority. And then the members met and that was convincingly passed. At that point we'd agreed to go with ZoSea subject to documentation and then the lawyers moved in. There was a long lawyering through October, November, December and the documents were finally wrastled into shape in late December and executed.

It was quite a process – pretty much twelve months and the documentation, you know, it's huge. It's designed to give them and their commercial interests the best opportunity and its designed to protect our stakeholders to ensure that the undertaking ZoSea offered is properly documented and goes in with appropriate agreements.

How will the tour be restructured next year. Can you divulge that information? No I cant. The ASP is now them [ZoSea]. Old ASP is a shelf company with a couple of dollars sitting in it. It's sitting on a shelf. They now own the ASP, they own the brand, they own the name, they own all the intellectual property and they will have the relationship with the events and they will contract the surfers.

So, I think it's been disclosed, in 2013 they will run the ASP but under the old model. So this [the Quiksilver Pro] is being funded by Quiksilver with their sub sponsors. This year will unfold under the old funding model yet under ZoSea control.

On the 1st January 2014 there's a new funding model – the details are out there. If Quiksilver choose not to retain their naming rights for this event then they don't pay naming rights and it'll be called something else. That'll be ZoSea's call, they might find another sponsor.

Those sort of details are already out there. Yesterday Paul formally confirmed that he's chief executive and Kieren [Perrow] is coming on as commissioner. In fact he's employed all of our staff – every single person is now on his payroll. So the staff feel good about it, they feel it's a well funded business. Paul's got quite significant working capital to employ and he's now out there looking for media deals, sponsorship deals, to essentially start to create some commercial grunt around surfing.

Will this be the end of the problems professional surfing has faced over the last couple of years? What problems are those?

Licensees pulling out of events for various reasons; instability and uncertainty; the premature world title debacle... It was just a mathematical error. Just human error.

Brodie Carr, who was then CEO, stepped down because of it. That alone might indicate the gravity of the error. It was just an error. Someone added up the numbers wrong. Brodie took responsibility in a very responsible way. He offered his resignation, it wasn't tendered. He thought it was the right thing to do as the ranking officer to step up and say, "It happened on my watch, I'm the ranking officer, I'm going to offer my resignation," and the board accepted it.

Many surf companies are suffering financial issues, some GFC-related some not, do you think the ZoSea offer is a Godsend to them? Yeah, well, the companies positions seem to be widely discussed. As I said before I don't know anything more than you do about their true state, but this arrangement will relieve them of the heavy lifting that they've done for thirty years. So I think it's very timely. I think Paul and his guys were clever in spotting an opportunity and importantly the members of the ASP – by a very significant majority – saw it as a great opportunity. So I think the planets lined up pretty well actually. I personally feel like its going to be terrific for the sport.

Where do you see ZoSea and the ASP in five years time? I'd really like to reinforce what I said last night [at the ASP Awards Banquet]: the best years are ahead of the ASP. These guys, in relocating and creating a new head office in California, that's where the big commercial dollars are, they're deeply connected with the entertainment sector and the television and new media sector. They're getting great people on board as employees. It will have every opportunity to succeed and I think they'll do OK. I think it will be a success.

Bear in mind, the old ASP was a not-for-profit. Just your average charity. We were tax exempt, you know, that's all the ASP has ever been and so it's managed to survive for thirty or forty years with a lot goodwill and a lot of dedication and frankly the big surf companies just paying for everything. They pay the prizemoney, they pay for all the site set up, they pay for the webstream, TV production, so, you know, I think we're coming to the view that that model had worked very well but maybe its time had come. Whether Paul saw that or the timing was fortunate, who knows? It feels just about right to me.

And what now for you? For me personally, I said to the board last February that 2012 was going to be my last year. I've been here ten years and I believe in the ten year model – you make your best contribution and then you give someone else a go. So, ironically, I said that and the next agenda item was Paul Speaker. None of us had met him, no-one knew him, we knew he was on the Quiksilver Inc. board. He came in and, as events unfolded, well, I was able to fulfil my desire to step down but do so at a situation where the company, and the new company, is in very good shape. It feels good from my point of view.

You're happy leaving under this scenario. I am. Well, I'm not happy leaving, because I love it. But it's the right thing to do.


top-to-bottom-bells's picture
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top-to-bottom-bells Monday, 4 Mar 2013 at 1:37pm

An illuminating interview.

"Will this be the end of the problems professional surfing has faced over the last couple of years?"
"What problems are those?"

Very illuminating.

blindboy's picture
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blindboy Monday, 4 Mar 2013 at 4:09pm

Well he would say that wouldn't he.

stunet's picture
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stunet Monday, 4 Mar 2013 at 7:30pm

Well maybe he would, but I sure wasn't expecting it. It's one thing to be optimistic and see beyond current problems but quite another to ignore them or discount them.

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blindboy Monday, 4 Mar 2013 at 8:08pm

You asked the hard questions. He gave the easy answers. If you can't see any problems you don't have to discuss them.

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blindboy Monday, 4 Mar 2013 at 8:59pm

I think it is fair to assume that the long game here is to build wave pools and locate the events in them. In the short term I suspect they are looking at a more sophisticated media product. The existing television product was pretty poor. This is no criticism of most of those involved. It was an inevitable outcome of live coverage.

The major problems of an unpredictable schedule and lengthy periods of inaction would be solved by canning the live coverage and releasing an edited event coverage soon after its completion. Probably as a pay per view Main Event type package. Failing that, bottom line, some shoddy gimmicky format that can hold its existing time slot between lingerie football and cage fighting. And yes, I keep repeating that line in the hope that it might emphasise how debased the "product" has become.

Personally I cannot wish the project well on any level. If successful it links surfing with the most despicable aspects of corporate culture. If it fails it merely continues to degrade what once was noble. It began as the pastime of kings but seems destined to become the entertainment of peasants.

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zenagain Tuesday, 5 Mar 2013 at 2:39am

You got something against tits and bums blindboy?

Maybe next time Laura Enever surfs someone might politely suggest that she puts some pants on.

I wish pro surfing well. I know it's a terrible analogy but without F1 would we see so many improvements in cars in terms of design, safety, aesthetics, performance? The same with surfing in my eyes.

If you surf in seriously cold water (like I do) you would appreciate just how far wetsuits have progressed. If you are in your 40's, I'm sure you would be stoked that there are boards being shaped with materials and technology that make me feel like I'm surfing in my 20's again.

Crowds? Pffftt! It's just as crowded now as it always was.

Plus, it's great to see just how amazing some humans can be on a slice of handshaped fibreglass and a moving H2O canvas.

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mick-free Tuesday, 5 Mar 2013 at 10:11am

Given the health of the ASP in previous years and its continual smooth running was inexpicably linked to the success of the major labels, I find it rather peculiar that a Chairman wasn't up to date with the health of their partners considering they were funding the ASP 'product'. With two of the majors listed he could easily read balance sheets and be totally across all the details. Even an executive summary could be prepared for him by a jo blo analyst - theres probably a shitload on the net. The fact that he wasn't and chose to ignore it is bewildering. I don't think there would be a CEO position available for anyone who submitted that fact in a job interview. This guy Terry must be a real good bloke - stunning!

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stunet Tuesday, 5 Mar 2013 at 12:45pm

"I think it is fair to assume that the long game here is to build wave pools"

I've absolutely no doubt that it's being factored into current plans. It puts last night's Four Corners expose on LM Investments (developers of Maddison Estate and Kelly's Gold Coast pool) in an interesting light.

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mick-free Tuesday, 5 Mar 2013 at 1:06pm

Wave Pools are the only way you could organise live on ESPN at 7pm and guarantee content. Look at Snapper now - low tides during the day all week will play havoc with running the comp at Greeny.

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camboboog Friday, 8 Mar 2013 at 2:11am

California has a GDP equivalent to France, the relocation of the head office to that state is a great business decision. Just pause for a second and equate how the Gross Domestic Product of a U.S. state is equal to that of an entire successful European country.

Wave pools are a certainty of future events. Major corporate sponsors will be much more willing to support events if there are guarantees of high rating marketing time slots. Love it or hate it, competitions at natural surf breaks will one day become the novelty events. The surf locations we all love and cherish are by nature fickle beasts, not suited to media demands. Look at the evolution of snowboarding as an example. It's roots and core were paved by riders willing to challenge mountains that may have had great conditions on the day, but were at most times unrideable. Now the snowboard world champ is decided in controlled environments that secure an even playing field for all.

We are by nature a stubborn breed. If we invite a visitor to our local break, we want them to think it is the best in the world but in the same breath we ask them to not tell anyone else about it. We want to have products that are practical to surfing, but we don't want some central city dweller to use them. We want to see surfing on the T.V, but we don't want it to get too popular. We want to buy wax, but are upset that there is a surf shop selling our lifestyle. We get inspired by professional surfers but get jealous of their success. We love watching surf competitions in great waves but we are usually unable to watch it when it happens. We want to embrace the culture but we are driven back by the forceful marketing of surf companies.

We want surfing to differentiate us from the average/ordinary person, but the line has become confusingly blurred.

The change of high level management of the ASP is completely irrelevant to us. The reason of why we surf is unequivocally the most diverse. You have to ask yourself the most basic and definitely the most perplexing question. 'Why do I surf?'

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mick-free Friday, 8 Mar 2013 at 11:51am

Does Grellman advise what Zosea paid for the ASP - Did anyone get any cash? ASP Brand is worth something - how much?

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thermalben Friday, 8 Mar 2013 at 12:05pm

Dunno if he'd have to disclose anything (payment wise). Unless they're a publicly listed company, they'd have every right to keep it to themselves and I imagine the contract would have had specifics clauses regarding this point (ie not publicly discussing the terms of the agreement). It's pretty standard these days.

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mick-free Friday, 8 Mar 2013 at 4:06pm

The only thing they have disclosed is the name and that Zosea owns it all. The former ASP are accountable to their stakeholders. Is it a not-for-profit organisation? An association? I don't know their old taxation status but I am sure the former ASP still has to file tax returns in Australia. Be interesting reading.

Its purely conjecture but on paper with all the invisible ink, I think they may have got a bargain. With the financial difficulty of the sponsors and threats of a rebel tour it sounds like it was handed over.

From a conversation with an ex Quiky boardmember his comment was that Terry is the only person that can make this work. There can be no dispute there is a massive conflict of interests - Manager of Kelly, the No.1 draw card and the Kelly Slater Wave Company. In the future your making a select group of people very wealthy and very powerful in the realm of Professional Surfing.

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thermalben Friday, 8 Mar 2013 at 4:21pm

I have no doubt that it was acquired at a bargain price.

Rewind 12 months and the ASP wasn't in a good way, in fact things started to slide several years ago once Fosters decided not to renew the global naming rights position, and the ASP couldn't get anyone to replace the vacancy.

The surf labels have known for a long time that each WT event was purely a branding vehicle. However, marketing and advertising budgets are often the first to be cut when times get tough. Hence why many events have fallen off the program over the last few years - because they can't be monetised, and their enormous costs (filed under 'marketing') can't be justified. Free webcasts are great in theory but someone's gotta pay the bills.

Therefore it takes a particular kind of business person to see a strategic, financially secure way forward under these kinds of circumstances. The only person capable of this may be Terry Hardy. Maybe someone else could do the job too, but have they stepped forward yet?

And irrespective of whether you think ZoSea will make a positive impact (and I think they will), what was the alternative anyway? Another three years like the last three?

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grazza Friday, 8 Mar 2013 at 5:32pm

Hey Ben. I think you are spot on there. Fact is that the business model for the surf industry is in trouble, and as a result the ASP business model, yoked as it is to this same ailing industry, was looking very sick.

Rick Grellman, who is by the way an honourable and very capable man, has somehow managed to guide the ship home the only even vaguely safe harbour. Does he understand the current state of these key sponsors? Of course he does, although it's true that he will have no more access to information about them then you or I. But it's not hard to understand where they are at, is it? Chairman should and must play their cards close to their chest as they dance through all the minefields they face. That's how the game is played. It might look like he understand and doesn't care, but I promise you that's not the case.

The strategic mistake that the ASP made was not aggressively pursuing support from outside the surf industry. The way it ended up, whatever ailed the surf industry ailed the ASP. It didn't have to been that way, but given that the board was ruled by the surf companies and by the surfer's reps who were naive about their sport and who, as sponsored surfers were in the pocket of the people that they should have been standing up to, it was hard to imagine it going any other way.

It's taken this industry crisis to trigger this seismic shift in the sport, probably couldn't of happened any other way. That the only way forward was selling it off is still worrying. We now have to trust ZoSea to take the whole thing forward. All the changes they are flagging are the right things, but it remains to be seen if they do protect their new baby. While this future has risk, the alternative offered only certain doom, so we really didn't have a choice. And hat's off to Rick for getting us there.

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mick-free Sunday, 10 Mar 2013 at 11:59am

Great comments Grazza.

I guess the jewel in the crown is Kelly, and I think the marketing of him with a small window (ie hes 40) will be the lynchpin to getting the sport a paying audience.

For all of Kellys incredible ambassador skills and his promotion of the sport he has been really under utilised by ASP. The fact that they had possibly the greatest sportsman of all time in their sport and were unable to transition the sport to a mainstream audience, is the ultimate failure. A blueprint would have been Michael Jordan and the NBA where Nike made their fortune.

How much is it going to cost to run the tour $20 - $25 million dollars??

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uplift Sunday, 10 Mar 2013 at 2:45pm

Kelly Slater is the awesome surfer. But the jewel in the crown? That's waves. No waves, forget it. Braithy's latest piece sums it up nicely, what time is it, how long have I been asleep. Anyone will marvel at amasing waves. Every non surfer knows about pipeline and co and appreciates them. Hawaii's waves catch attention in all sorts of media's, for a myriad of audiences. Swell net loves running photo's and video of sick waves. Take any tourist out to black's in a boat when its on and thumping and you'll blow their mind, surfer or no surfer. If you add a surfer who's along for the ride, trying to lose energy along the way, it adds some ooohs and aaahs. If you add a surfer that can actually contribute something to the waves grunt and shape (rare, along the lines of Tom Carrol's snap), that will up the energy and get screams and hoots for sure. But, when that super bomb appears on the indicator, even the most surf ignorant tourist will wait a minute longer to marvel at what happens. And if someone is truly, genuinely, super confidently paddling their butt off to be on the spot, so that they can really do their thing with the wave too... what are you doing! Stop the boat, we gotta see this!

Maybe so many venues are a liability. Pipeline is perfect. You can paddle out when its on, fans can get in and are in the stadium, yet feel, and become a part of nature's awesomeness. When snapper is spectacular its hard enough for the surfers to be in the picture, let alone the spectators. Jet skis take out a huge part of surfing, paddling, that could be a competitive plus, spectacle wise. Like taking the run of the day, or tackle of the day out of rugby or gridiron. Other people have found and capitalised on amasing waves that they know will pull a happily paying crowd. It might be better to have something like four venues, two rights, two lefts, pipe and a close to shore version of sunset, much more reliable and spectacular ones, with the attributes of pipeline spectator wise. Then the actual surfers would get a much better chance to really show their talent to the public, and the sport would be open to a huge range of athletes, especially those weighing more than 65 - 70kg. All sorts of interesting, amasing scenarios could occur as in some other sports. Endurance, speed, precision, flexibility and power... Hewett, Sampras, Lomu, Ablett, Judd, Meninga, Menzies all mixing it up.

You can't expect the fans to regularly make all the effort and spend hard earned money to get to the Superbowl, only to be told the goal posts are broken, there's a huge hole in the ground, and the rest is a swamp, or no one has a ball, and the players brought the wrong boots. But its all ok, they are putting on a skipping demonstration, come back tomorrow...maybe.

Or worse, these guys can't play because we don't have uniforms big enough, and when they run, they are too powerfull and sink into the too soft ground.

Just like people, not just surfers, are drawn to powerfull, beautiful, spectacular waves, especially the set and the wave of the day, nature's full potential on show, its the same with athletes. Surfing could have the best of both worlds, but at the moment, its not happening. Fiji showcased lots of issues.

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derra83 Sunday, 10 Mar 2013 at 2:59pm

Another good post Mick. Theyre all a solid read but worth it.

If I could go back to Grazzas comments. Ive been as guilty as the next twitter critic of saying unkind things about Richard Grellman (and other people working for the ASP) but if you take a step back it's clear that Grellman did many good things to steer the ASP during an incredibly tough time. Like Rudd steering Australia's economy post-GFC, Grellman will probably never get the recognition he deserves.

No more unkind words from me though.

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mick-free Sunday, 10 Mar 2013 at 5:42pm

Fair play, I know nothing of the internal workings of zosea/ASP, but he will be hailed as a visionary if the transition becomes a success.

I just can't understand why he can't(or someone form Zosea) divulge any further information about the tour next year. The only conclusion I can make from this is that they really don't have the details worked out yet. In the interview, the first bit of information Zosea sent to the ASP was a vision for the tour - at the very least this document could be released.

I guess the problem for people like me who have an interest in competitive surfing is the poor communication of all of this. And communication/marketing are going to make and break these guys in the next few years.

Has there been any further media releases since the first one?

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brutus Sunday, 10 Mar 2013 at 7:25pm

guys, Richard Grellman was and is a great bloke but also he really acted for the interests of the sport,and not for the commercial interests of the sport.

I got to know him when he first joined the ASP,when i was still an advisory board member to the surfers.

He was a genuine bloke and with a huge professional profile...the big question for any of his critics was,what was in it for him personally,what did he leave with and what was his legacy if any??

Along with Greville and Lisa Mitchell,Richard worked tirelessly and a great expense to him/themselves,monetarily and physically they toiled for and still do I imagine...for surfing which in turn is for surfers rights andthe bst deal for "OUR" culture of surfing...

as far as details for next year can only imagine what Zosea is trying to do......but they will be better informed after watching this year and try and work out what the tour would be like without Kelly...this is in my opinion a huge negative,if kelly retires there is no-one else on tour close to having as strong a brand as him.....especially to people who don't surf.....

interesting times...the ASP,with the industry in control has had their moment,and now they are in survival mode....thankfully there have been People like Richard ,greville and Lisa who have paved the way for the next gen ASP.....couldn't be better!!!!

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derra83 Sunday, 10 Mar 2013 at 7:52pm

Mick-free, I meant the Mick in the post above my last one - Uplift. Too many Micks, too many Daves.

Brutus "Along with Greville and Lisa Mitchell,Richard worked tirelessly and a great expense to him/themselves,monetarily and physically they toiled for and still do I imagine" Why don't we hear more about these people??? Richard seemed reluctant to talk in the interview above, maybe if they discussed things more with journalists we'd have a fuller picture. If nothing else I'd like to know why they do what they do.

Lets face it, everyone thinks they know whats best for surfing. It's probably because it is such a persoanl thing and that's why we all feel we can criticise or chip in with opinions - everyone feels like theyre part of it somehow.

Interesting times Brutus.

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brutus Sunday, 10 Mar 2013 at 10:34pm

hey Dera,its amazing when you know the Mitchells,and who I consider to be the God Parents of Modern surfing......

they created the WPS,they don't need any media gratification..these are some of the most amazing selfless people i know...and surfing is sooooo much better for their genorosity of spirit and the friendships they have forged in surfing....

you probably need to ask the "media/Journalists" why we hear so little of the real power and people like Richard,and the Mitchells behind the scenes.....then again they don't need media gratification or fame or glory......

ready...they do it for the Love....of surfing and the surfers...

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grazza Monday, 11 Mar 2013 at 9:21am

Derra, Rick was reluctant to talk about the future structure of things for one completely valid and very proper reason - it's not his job any more. The reins have been handed over, and laying out the vision is very properly a job for the new world order. Nothing worse than a former leader sucking the oxygen away from the new guard.