From Lane 9 News: "... PHOENIX, Arizona, December 24. IN what appears to be financial concerns that could affect a landmark venture between the Wasserman Group (WMG) and three of United States Olympic Committees' national governing bodies (USA Swimming, USA Track and Field, and USA Gymnastics), WMG is shopping its Online Sports Network in lieu of an expected eight-figure loss for 2007. ..." [Lane 9 quotes the Sports Business Journal as their reference.]Consequently, they want to sell Sportnet.com for 50-million-dollars to obviously cover some losses. [Link]
That figure is mind boggling for I don't see 50-million dollars of product there. Heck, even my site has more swim content than Sportnet and Floswimming has a 100 times more content as well. Therefore, I have to assume that their primary assets are the contracts they have with those that produce content but in relation to other content providers, it is still anemic.
For instance, take Movielink.com as an example as a content provider. Movielink.com was founded as a joint venture between Paramount Pictures, Sony Pictures Entertainment, Universal Studios, and Warner Bros., who were responding to consumers' adoption of high-speed Internet access well before iTunes came to market. Movielink.com had far more contracts with several major movie studios and foreign distributors. They sold and rented 100's upon 100's of movies per month. This includes documentaries, animation, shorts, extreme sports, etc. In August of 2007 movie rental giant Blockbuster acquired Movielink.com for a mere 6.6-million-dollars. Sportnet has nowhere near the content nor the contracts that Movielink had access to nor such an advanced e-commerce infrastructure. Hence, where is the equity in Sportnet? [CNN article on the Movielink.com sale Link]
Timed Finals, along with Sportnet.com is owned by The Wasserman Media Group as well. I am assuming that the site was purchased for the sole purpose of augmenting the USA Swimming deal. Will Timed Finals be sold if Sportnet.com is sold since it is seemingly one it's properties?
USA Swimming should have cut a deal with WCSN and Swimming World instead.
1 comment:
The price does seem high to me too. Of course they must be allocating a very high valuation to their pending exclusive broadcast and sponsorship sales rights for USA Swimming, USA Track, and USA Gymnastics and their events. Most noteworthy: apparently nothing has yet been formally signed between by USA Swimming and WMG; and the other two NGBs (National Governing Bodies) Track and Gymnastics are waiting for them to hammer out the details before they enter into their own serious negotiations. If I was a executive of USA Swimming the alarm bells would be going off when I see WMG trying to flip what is apparently a "handshake" exclusive representation agreement for quick cash despite having an obligation to guarantee millions of dollars over a long-term period. Call me a cynic (and I am) to me that $50 million price tag says USA Swimming isn't getting full value for its marketing rights and WMG is trying to cash out going into an Olympic year. Hardly an ideal long term partner I'm sure USA Swimming was expecting.
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