An Interview With Ilya Merenzon, Organizer of Carlsen-Anand

An Interview With Ilya Merenzon, Organizer of Carlsen-Anand

PeterDoggers
PeterDoggers
Dec 1, 2014, 5:50 AM |
11 | Chess Event Coverage

The 2014 World Championship match, won by Magnus Carlsen, has set records in online viewership. Chess.com asked main organizer Ilya Merenzon: what's next?

According to the official website the 2014 Championship Match is Sochi has set records in online viewership. Over a million people visited the official site daily. The total number of unique visitors was 10.5 million with the highest traffic on the last day of the match: 2 million visitors.

These, and other statistics, were provided to the media by Ilya Merenzon. Being the owner of Agon, the company that has the commercial rights of the championship, he can be seen as the main organizer. During one of the earlier games of the match, Chess.com spoke with Merenzon. 

He is from Russia, but his accent (or rather, lack of) suggests that he has lived in the U.S. as well. “I studies economics in New York, where I lived for 15 years,” confirms Merenzon, who is a new name in the chess world but in fact has been around for a while. He knows FIDE President Kirsan Ilyumzhinov, and he has worked with Andrew Paulson, the former owner of Agon.

“I knew Andrew from the media. I thought chess was really underdeveloped, and that it was a good idea to start developing it. I introduced him to Kirsan, and helped to draft a contract, so I was involved from day one.”

For more background, read the ChessVibes interview with Paulson from March 2013 here.

Merenzon knows Ilyumzhinov via Press Release Group, his media company with locations in New York, London and Moscow, where it's called Public Space. “I knew him from the [2010 Presidential] elections when he asked me to arrange a couple of interviews with western media. He felt his message wasn't being heard, so I helped him. Assisting Russians and others with PR and contacts with western journalists, that's what my company does.”

“He seems to be working hard,” Magnus Carlsen's manager Espen Agdestein recently said about the new owner of Agon. In Sochi, Merenzon was rarely seen without his laptop: “Initially Agon was about 25 percent of my time; now it's about 75 percent of my time.”

Agon's involvement in top-level chess started in early 2012, when a first agreement with FIDE was signed. The company earned the commercial rights for the events in the world championship cycle, and organized its first event in September 2012: the London Grand Prix.

In two subsequent Grand Prixs Agon was not involved, but the company played a large role in the March 2013 Candidates’ Tournament (won by Magnus Carlsen, who would win the world title half a year later). London-based Pentagram designed the playing hall, and special software was developed to show the games online and on tablets for spectators at the venue.

Merenzon about this period: “When Andrew set it up I helped him and I was part of the decision-making process as well, but he was always running the show. I think he did a really good job in setting it up. When he came around, there was nothing to sell, so for a year he tried to develop a product.

“He created a design, he developed presentations, he ordered a YouGov study which is now used by everyone in chess, he hired a number of advertising agencies to develop prototypes, presentations, packages... Even this championship was designed within the framework of what Pentagram created, who were hired by Andrew. So he did a lot of really cool things but the only thing he didn't do yet is actually go out and sell things to sponsors.

“So he did a lot of really cool things but the only thing he didn't do yet is actually go out and sell things to sponsors.”

“The reason is that he didn't have time, and he didn't focus enough. It's the toughest part, you know, selling to sponsors. You have to talk to people and basically ask them for favors... It's tough and it's unpleasant overall. So, he wasn't focused on that, he was really focused on developing the product.”

Andrew Paulson. | Photo © Anastasiya Karlovich.

In a recent email to Chess.com, Paulson stated that he isn't involved in chess anymore, but according to Merenzon that is not the case: “Right now we're using his foundation, and we're using him. He is involved — not financially, but on a personal level. He is giving advise, he knows everyone, and he is just trying to help even though he is now doing something else.”

In October the ownership of Agon has transferred from Paulson to Merenzon (“I bought the company from Andrew for one pound”), who is now the 100 percent owner. Merenzon doesn't want to go into detail about how the Agon is doing. “The company is doing OK. I've seen some debt, and basically I am fixing the company.”

Merenzon also doesn't answer the question why a required $500,000 deposit was never paid to FIDE. He rather looks ahead: “Basically Agon has now organized three Grand Prixs, including the ones in Baku and Tashkent recently. The prize money has been transferred to FIDE's account.

“Each Grand Prix is about 250,000 Euros, including hotel costs, prize money et cetera. We have already paid FIDE 600,000 Euros. According to the contract, if I recall correctly, it is up to FIDE whether to hold the deposit or to use it for prize funds so from a legal point of view they can be satisfied.

“I don't know how it was before, but at least now we can prove that we have transferred the money. And this is what we are planning to do from now on: keep the money until the next championship and then transfer to FIDE.”

Adding “this way we don't have to answer questions from media anymore,” Merenzon notes that he gets a lot of questions about Agon's finances. “For some reason everybody is interested in Agon. People are suggesting that there is some kind of corruption going on, but in reality we're just trying to sell sponsorship and create a sustainable business for everyone. I just want to close this weirdness and move on.”

“I just want to close this weirdness and move on.”

In Sochi the prize money for the players was 1 million Euros. As the winner, Carlsen got 600,00 and Anand 400,000. During the match there were reports in the media that Agon had not transferred the required funds to FIDE in order to provide the prize money for the players. However, Espen Agdestein confirmed to Chess.com that all payments have been made according to the contract schedule.

Merenzon interviewed by Anna Burtasova in Sochi. | Photo Mike Klein.

The path towards the 2014 World Championship has been a bumpy road. The World Chess Federation had not received any bids by the extended deadline of 30 April, 2014. The Norwegian Chess Federation made some attempts to try to get the match to Norway, but no official bid emerged.

Then, in June of this year, Ilyumzhinov suddenly arranged a press conference where he announced that the match would be held in Sochi. He also announced the dates and location, and stated that an agreement was made with the Governor of the Krasnodar Region, Alexander Tkachev.

In the third week of August, news came out that FIDE had denied a request from Carlsen to postpone his world championship match with Anand. Carlsen was not happy with the match taking place in November in Sochi due to “much uncertainty about it”, as stated by his manager.

However, FIDE President Kirsan Ilyumzhinov made clear at another press conference that the deadline would be upheld. Meanwhile, Anand had already signed, and was ready to play in Sochi.

Then, the Carlsen team wanted to postpone the decision whether to sign the match contract or not until after the Sinquefield Cup. FIDE's initial reaction, by Vice President Israel Gelfer, was negative but later Ilyumzhinov agreed to postpone the deadline to September 7th. Eventually Carlsen decided to sign the contract.

All this meant that the match was only organized in just a couple of months. And when the first pictures of the playing hall appeared on the internet, it also became clear that there are two main sponsors: Summa Group and Gazprom.

How did this all happen? Merenzon: “FIDE had the responsibility to hold the championship, and for many times they tried to invite bidders. There were no bidders, and the reason is obvious. Nobody wanted to do it because nobody gained from it.

“There were no bidders, and the reason is obvious. Nobody wanted to do it because nobody gained from it.”

“Norway, who some people claim would be a bidder... it would be stupid for them to bid because it is international; they would pretty much not win anything by spending the money. They would get exactly the same in Norway if it takes place outside of Norway.

“In India, first of all there is a corruption scandal and second, I don't think Vishy would want to play in India again. A third country... It's a huge expense, we're talking about 3.5 million Euro approximately. So I wasn't surprised at all that there were no bidders.

“FIDE told us we still have a responsibility. So we put our heads together and we figured that it's possible to find sponsors in Russia on a short notice for reasons Arkadij Dvorkovich [the Russian Deputy Prime Minister and the chairman of the organizing committee - PD] mentioned at his press conference: they support chess, and thinks it's an honorable thing to hold the match.

“Mr Tkachev himself doesn't have any money; he's a governor, an official. He can't sponsor anything himself, so the Krasnodar Region is actually a sponsor; they have provided this building, because it's important for them to show that they can utilize the Olympic heritage and basically bring more events.

“With Gazprom and Summa we had a commitment beforehand. We hoped to attract many more companies; I personally had a list of about fifty. I went to Oslo, I went to India...

“The two main sponsors are really good companies and we're trying to work with them so that they embed chess into their marketing or into their every-day life. For example Gazprom, we're trying to help them to have chess tournaments. Tens of thousands of people work there, so that would be really cool. Also to other sponsors we come to, we say: ‘not only sponsor it and put your logo there, but hey, make it part of your corporate culture, have people come to the tournaments, the grandmasters will come to you. Just enjoy it and use it in your marketing.”

Agon has the rights for “events in the World Championship cycle” and will continue to be involved FIDE's top tournaments. “We'll definitely be involved,” says Merenzon, “but I'm not sure at what level. We'd like to provide the design again. We've changed the website; all Grand Prix are now in one website so that sponsors can basically sponsor the whole series and not one event. We won't be involved in the World Cup; it's a huge event and we won't be able to pull it off. Besides, it's basically attached to the Olympiad.”

One of Andrew Paulson's accomplishments is that, together with FIDE, he created a long-term calendar with dates for the major events. Agon is still planning ahead; at the closing ceremony of the Carlsen-Anand match it was announced that the 2016 match will be held in the U.S. Merenzon: “We already have the dates for the match in 2016. The reason is that for broadcasters and sponsors it's important to plan it ahead, and have enough time.

“We already have the dates for the match in 2016.”

“Right now we are in touch with about 25 broadcasters all around the world. We're talking to sponsors, we're talking to venues, we're talking to websites... We're basically looking for a main partner in each country who we hope will broadcast the match and would pay us royalty. On the basis of that we hope to make the championship sustainable, so that we can host it in really good countries. This would increase exposure for the players, for us, for advertisers.”

Merenzon at the closing ceremony. | Photo Mike Klein.

In recent years FIDE has been criticized that basically all its major events were held in the Caucasus region, but Merenzon wants this to change. “We want to hold events where the sponsors are, and they are in the U.S. and in Europe. But the way it's set up right now, it's not possible unless we change things.

“Right now, the Grand Prix tournaments are organized by federations who are friends with FIDE, and who have reasons to do favors. But we are running out of people who want to do favors. The only way to make it sustainable is to find sponsors. Ideally we would have sponsors for the whole cycle and host the tournaments in countries where the sponsors get the maximum exposure.”

“Right now, the Grand Prix tournaments are organized by federations who are friends with FIDE, and who have reasons to do favors.”

Chess has changed a lot in the past two decades, mainly because the computer is now playing a large role for both chess professionals and fans. The latter group is used to watching events live on the internet with 2D chess boards, the moves, the clock times and, since a few years now, automatic analysis by an engine.

Because of this, Merenzon isn't worried about the fact that the playing hall at the Baku Grand Prix was completely empty, and only a few dozen seats are occupied in Sochi: “I'm not at all worried. If I had the choice, I wouldn't have any people in the playing hall. It doesn't matter how many people you can hold; it will never compare with the number of people who are watching it online.”

In Sochi 200 places were available in the playing hall. “But each day over a million people came to the website,” notes Merenzon. “And on the first day, more than 500,000 watched the video broadcast, which is record-breaking. It's a audience of a very high-level TV station. It's substantial. So, for sponsors and for viewers I think we should really focus on the online part.

“Of course it's nice to make it nice for those who come, but it would be easier not to have any audience. It's just that it's important for some people to come over and watch. So... you're welcome to come, but I think it's more important for people who watch it online to enjoy it.”

Merenzon's ambitions are high, and if he succeeds, the future of chess will be bright. “As soon as we have one good, long-term cycle sponsor, then we'll try to build it to the next level, and the next level will be television. We basically have ‘semi-agreements’ with Bloomberg and other broadcasters in the world, so they would broadcast a weekly show.”

“The next level will be television.”

To this day, nobody knows for sure whether chess can make the same jump as poker in terms of popularity and exposure. Ilya Merenzon is certainly trying.

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