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Citizen Sports deal came after SI took a pass on company
Published March 29, 2010
Citizen Sports Network is set to become a part of Yahoo!, with the closing of the high-profile acquisition slated to occur as soon as this week. But that deal came about in part because minority owner Sports Illustrated passed last year on purchasing majority control of the company.
SI struck a sales and content relationship with the venture in May 2008, representing the former ProTrade for ad sales and using Citizen Sports Network’s Facebook-oriented fantasy games to re-establish a presence in that burgeoning space. SI then quietly acquired a minority stake in Citizen Sports Network, estimated by industry sources at 18 percent, later that year. But Jeff Price, president of SI Digital until April 2009, said he could not get approval from SI parent Time Inc. on a third deal he had begun to work out early last year to purchase the remaining equity.
“I am thrilled for Citizen Sports, am a very big believer in their model, and this is a great pickup for Yahoo!,” Price said. “In fact, this is basically the same deal I tried to do.”
Price resigned from SI shortly after his Citizen Sports Network purchase attempt fizzled amid heavy staff cutbacks throughout Time Inc. He is now president and publisher of Sporting News, owned by SportsBusiness Journal parent American City Business Journals.
Executives for both Citizen Sports Network and SI declined to comment. Industry sources said SI will be treated like any other Citizen Sports Network investor in terms of recouping funds at closing from the sale of the company. It is not yet determined whether Yahoo! will maintain any sales or operational tie with SI for the venture after the deal closes.
“It’s premature to say what will happen there,” said Jimmy Pitaro, Yahoo! vice president of media, upon the announcement of the purchase earlier this month. “We’ve had no conversations with SI yet, but we’ll take a fresh perspective, and we’d love to work something out.”
Financial terms for Yahoo!’s purchase of Citizen Sports Network have not been disclosed. Unofficial estimates from industry observers have ranged between $30 million and nearly $50 million, veering more toward the lower figure.
The deal will be used to strengthen Yahoo!’s presence within Facebook and on mobile platforms. Those are core areas for Citizen Sports Network and key elements for its rapid audience growth while being relatively weaker areas for Yahoo!.