EconSports: Deals in the Sports Media Sector
Deals: Venture Money and M&A Activity in the Sports Media Sector
Jim Bankoff; Chairman. SB Nation
Chris Russo; Fantasy Sports Ventures
Jeff Price; President Sports Illustrated Digital
Josh Swartz; COO, Wasserman Media Group
On Sports Deals in the Current Economy:
Jim Bankoff:
On a macro level everyone is suffering, you can’t pretend otherwise. Having said that…small companies, good companies will do well, will build value. Larger companies as well will have an opportunity to focus on their core value and to grow. As newspaper chains can’t focus on local stories, that gives us an opportunity to come in and be the biggest sites for these communities.
Chris Russo
The web 2.0 exuberance bubble has burst. The key now does come down to having an ability to engage users and over the next 24-36 months you have to build revenue and cash flow, you’ve got to bring me the revenue story, the engaged userbase, and how you’re going to scale. We cannot have this exuberance, it has to be built on fundamentals. Have to focus on being lean, mean and ultimately profitable.
Jeff Price
I don’t think we’ll see another 100 million Rivals.com or CSTV deal. Do I think there are big deals? yes, sure. I think there could be big deals depending on how they grow over the next 18 months. But I think what has to happen over the next 18 months is some consolidation of companies that can’t be profitable on their own or else they won’t exist anymore.
Josh Swartz
It’s still early but in this case we’re seeing equal constriction on both sides of the market. I look at this economic macro climate as a big opportunity especially for small companies that can go in the right direction, the days of basing business on cost per unique are gone, if you can’t monetize your userbase I’m not going to look at you.
On Business Models for Sports Content
Chris Russo
Advertising, ultimately is the foundation of the sports vertical. Bob [Bowman] obviously has built a business based on video. Building a business based on content from the subscription side is a much more difficult proposition. Things like merchandising have become a much larger part of what we do in sports. Video lives with the leagues for the most part.
Josh Swartz
The more niche your content is the greater the ability to charge for them because the userbase is so rabid, and that’s information you can’t find anywhere else, certainly not for free.