FL-based The Sports Authority (TSA) and Global Sports
Interactive (GSI) formed a joint venture for GSI to operate
exclusively the e-commerce business of TSA. The site, at
TheSportsAuthority.com, is expected to relaunch in the
fourth quarter this year and will sell a selection of
sporting goods, footwear and apparel. The site will
initially be 19.9% owned by TSA and 80.1% owned by GSI, with
a provision for TSA to increase its stake to 49.9% over
time. TSA has also been granted certain warrants to obtain
a 1% stake in Global Sports, Inc., the parent of GSI. GSI
will provide the technology and the capital for the project,
as well as marketing funds to drive online traffic. TSA
will incorporate the Web address into all of its marketing
and communications materials (TSA).
FROM THE BRASS: TSA CEO Martin Hanaka, on why TSA is
only holding 19.9% of the venture at start-up: "We ...
forecast that this venture will lose money in the first few
years, so therefore, it's not important for us to have those
losses on our P&L at this juncture." GSI CEO Michael Rubin:
"No one has done a good job of the sporting goods category
online, so I don't think it's gotten a lot of attention yet.
... I think that this category is projected by Forrester to
be a $3-4 billion online in 2003" ("Market Wrap," 5/19).
