John Elway, Michael Jordan and Wayne Gretzky formally
announced yesterday their $150M plan to launch the sporting
goods retail Web site MVP.com in January, and if the startup
"goes well," the company "will probably file for an [IPO]
next year," according to David Roeder of the CHICAGO SUN-
TIMES. Elway will serve as MVP.com Chair, Jordan and
Gretzky will serve on the company's Board and former Sears,
Roebuck and Co. exec John Costello will be CEO. Costello
said that the site's sporting goods merchandise will target
the "mid- to high-end customer" and that the company will
"employ about" 50 people at a planned Chicago headquarters
and around 60 at a South FL office (SUN-TIMES, 12/22).
S.F.-based Benchmark Capital, which has backed "successful"
Internet startups such as eBay.com, is "pumping" $65M into
the site along with L.A.-based venture capital firm Freeman
Spogli & Co. (ROCKY MOUNTAIN NEWS, 12/22). FL-based
financial firm JWGenesis' stake in MVP.com has decreased
from 50% to 5%, but the share is now worth $25M after an
initial investment of $3M (PALM BEACH POST, 12/22).
THE LATEST LINE: Shares of SportsLine, which will "hand
off" its e-commerce operations to MVP.com as part of a
$120M, ten-year deal, "soared" 17% at one point yesterday
with news of the deal and closed at 63 1/4, up 7/8. In its
deal with MVP.com, SportsLine is "guaranteed" $20M in annual
ad revenues, which should help "offset the loss of the
roughly" $35M the company was experiencing from its e-
commerce unit (N.Y. TIMES, 12/22). SportsLine CEO Michael
Levy said that the company "will get a cut of the revenue"
after MVP.com's earnings pass an undisclosed threshold.
Levy, who predicts profitability for SportsLine in 2001: "I
think MVP will be the clear winner ... if they execute. And
with our help, how can they fail?" (INDUSTRY STANDARD,
12/21). On Wall Street, 2.7 million shares of SportsLine
traded yesterday, almost seven times the stock's trading
average over the past three months (BLOOMBERG, 12/22).
P.O.V. Editor-in-Chief Randall Lane: "It's a really good
deal for SportsLine" ("Biz Buzz," CNNfn, 12/21).
HOW IT WILL WORK: MVP.com will initially receive its
merchandise from IN-based sporting goods store Galyan's
Trading Co., "putting it in direct competition with" online
sports retailers Fogdog Sports, Gear and The Sports
Authority. Galyan's General Merchandise Manager for
Athletics Lindsay Rice: "We are developing assortments,
product offerings and trying to create an online experience
that would mirror what you would find in Galyan's."
Galyan's will own a stake in the venture, but Rice "declined
to reveal its size" (INDIANAPOLIS STAR, 12/22). In Toronto,
Michael Grange writes that a marketing campaign around
MVP.com "will kick off around" Super Bowl XXXIV in January
(GLOBE & MAIL, 12/22). In Chicago, Irv Kupcinet writes that
Elway, Jordan and Gretzky "are negotiating with other
potential partners," including Tiger Woods, Andre Agassi,
Mia Hamm and Derek Jeter (SUN-TIMES, 12/22). Costello: "Our
goal is to be the preeminent destination for outdoor and
sporting goods merchandise and insight" (CNNfn, 12/21).
ELWAY UNPLUGGED: Elway spoke on the development of
MVP.com with the ROCKY MOUNTAIN NEWS' Al Lewis and said: "At
first, we talked about a site that would offer lifestyle
content on one side, and then [JWGenesis] would offer
information on the financial side. But the further we
looked into that, we realized we faced a lot of competition,
especially on the financial side. So then the focus came to
sporting goods and outdoors equipment." Elway, on whether
the site will eventually provide sports information and
content: "Those are things that we'll explore. .. Right now
we want to establish our focus on e-commerce. We want to
provide great products, and we want to be able to provide a
service" (ROCKY MOUNTAIN NEWS, 12/22). Costello on working
with Elway, Jordan, and Gretzky: "It goes beyond the
standard endorsement deal. They're really engaged in the
business. For example, they're involved in marketing and
advertising meetings. John Elway was involved in my CBS
discussions. Michael Jordan has suggested management
employees for the company" ("StreetSweep," CNNfn, 12/21).
