With its deal to acquire NC-based Total Sports in a
$130M stock deal on Friday, S.F.-based Quokka Sports "gains
access to mainstream sports and doubles its networks' unique
visitors per month to about 3 million," according to George
Rothacker of the CHARLOTTE OBSERVER. Quokka execs projected
"higher revenues and cost reductions" with the combined
companies, with revenues of $50M "expected" in 2000, up from
$13M in '99. Meanwhile, Total Sports Chair Frank Daniels
said that although Quokka and Total Sports "compete for
advertising and in technology development, almost all
services and sports offerings are complementary." Daniels:
"With or without this, our future was solid. But the
companies are stronger together than the two companies
separate." Total Sports Interim President & CEO Gary
Stevenson said that the company's 130 Raleigh-based
employees will become "part of Quokka, but the Total Sports
brand name will continue to be used for some products"
(CHARLOTTE OBSERVER, 7/22). In Raleigh, David Ranii wrote
that Daniels "will act as a consultant to the business after
the sale is completed but will no longer be an employee."
The sale price values Daniels' 7% stake in Total Sports at
more than $9M. Daniels said that Quokka "intends to retain
a strong presence" in Raleigh, and execs of the two
companies "even talk[ed] about adding employees," but
"layoffs haven't been ruled out." Stevenson will run the
Raleigh operation with a still-to-be-determined title.
While earlier reports had Total Sports being sold for close
to $300M, Daniels said of the $150M deal, "The price is
extraordinarily fair. The market has changed since the
early part of the year." Daniels added that Total Sports'
investors were "happy with the deal" (Raleigh NEWS &
OBSERVER, 7/22). The WALL STREET JOURNAL INTERACTIVE's
Jennifer Rewick wrote that the deal puts Quokka "in direct
competition with sports giants such as" CBS SportsLine and
ESPN.com (WSJ.com, 7/21). Shares of Quokka were down
slightly on Friday to close at 8 13/16. In trading this
morning, shares are down 9.2% at 8 (THE DAILY).
