Second-screen usage overstated? NASCAR to open talks with ESPN, Turner Soccer portal Goal.com gets makeover ESPN near deal to keep Little League Dupriest shares take on media landscape Networks cry foul at NFL-Verizon deal Houston numbers affect carriage battles Market shift rocks digital strategy Mandalay TV show based on writer NASCAR on Fox ratings level off
Upcoming Conferences and Events
SBJ/January 30-February 5, 2012/Media
Big Lead sale not affecting other sites’ plans
Published January 30, 2012, Page 4
Last week’s purchase of Big Lead Sports by the USA Today Sports Media Group was a record-breaker, but executives don’t expect the deal to spur a run of near-term acquisitions of rival independent online sports properties.
The deal, pegged by industry sources at about $30 million, represents the largest independent U.S. sports Web property ever to be acquired in terms of raw traffic. Big Lead Sports, a network of more than 500 owned and affiliated sites previously known as Fantasy Sports Ventures, has risen as high as fourth in monthly comScore sports traffic rankings, with a peak audience of more than 20 million unique users.
Big Lead Sports, formed in 2006, is considerably older than many of its independent rivals, and with traffic growth slowing, observers expected the company to be first of the independents to be acquired. In addition, USA Today parent Gannett Co. already held a 30 percent interest in Big Lead Sports before last week’s deal.
“I wasn’t super-surprised, as I figured this was the path they were on. But it doesn’t change anything for us,” said Brian Grey, chief executive of Bleacher Report. That sports journalism site was built on user-generated content but introduced a
lead writer program last summer and last week announced plans to hire as many as 20 more paid writers over the next six months. “Our road map is still very fixed on building and executing the plan we’ve laid out for ourselves.”
Other independent online sports outlets, including 24/7 Sports and ThePostGame.com, also expressed intentions to maintain their current plans amid the Big Lead Sports acquisition.
Specific financials on the Big Lead acquisition were not disclosed, so it is not known how much of a multiple of revenue the purchase represents, or how much Chris Russo, Big Lead Sports’ chief executive, will make from the sale. Today’s acquisition marketplace is far different than before the economic collapse of 2008, but other independent online sports properties far outside the top 10 of most trafficked sports destinations sold for far more over the past five years. Yahoo! bought the college recruiting network Rivals.com in 2007 for $98 million. Yahoo!’s 2010 purchase of Citizen Sports Network was pegged by industry sources at $35 million. CBS Corp. paid $43 million for MaxPreps in 2007. Some of those companies, however, had subscription content components that helped drive up their purchase prices — an element that Big Lead Sports did not have.
Other sources said that Russo had been shopping the Big Lead Sports equity for many months and that several media entities passed on the deal, giving Gannett additional negotiating leverage. Talks with Gannett took place slowly and quietly over much of last year. Russo and Big Lead Sports used boutique banking outfit Mesa Global to aid on the transaction.
After a transition period of several months, Russo will depart the company he helped found and build. The former NFL, NBC and New Line Cinema executive has no fixed career plans, and intends to take some sort of extended break later this year. But he said he wants to stay on the entrepreneurial side of digital media, focusing more specifically on social media.
“I think that kind of concentration is where I want to go next, having a more purely social focus and helping bring more marketing dollars into the space,” Russo said. All other current Big Lead Sports staff will likely remain on board with the USA Today Sports Media Group.
The deal marks another aggressive move for the USA Today Sports Media Group as it bulks up its overall profile (see related story). But it also inherits a substantial job of integrating Big Lead Sports’ vast network of sites, and widely varying degrees of content quality, into its portfolio of properties. Company executives said the acquisition will allow it to organize content on a more topical basis, as opposed to the more geographic orientation it now uses. The move also deepens USA Today’s reach into fantasy sports with both gaming and content.
“Certainly getting the additional scale in this deal is important from a sales and monetization standpoint,” said Dave Morgan, USA Today Sports Media Group senior vice president of content. “But what this also does is gives a lot of additional touch points in individual categories, individual sports and allows us to go a lot deeper and a lot stickier in those areas.”
Return to top
The deal, pegged by industry sources at about $30 million, represents the largest independent U.S. sports Web property ever to be acquired in terms of raw traffic. Big Lead Sports, a network of more than 500 owned and affiliated sites previously known as Fantasy Sports Ventures, has risen as high as fourth in monthly comScore sports traffic rankings, with a peak audience of more than 20 million unique users.
 |
“I wasn’t super-surprised, as I figured this was the path they were on. But it doesn’t change anything for us,” said Brian Grey, chief executive of Bleacher Report. That sports journalism site was built on user-generated content but introduced a
 |
| Big Lead Chief Executive Chris Russo will leave the company after a transition period of a few months but says he wants to stay on the entrepreneurial side of digital media. |
Other independent online sports outlets, including 24/7 Sports and ThePostGame.com, also expressed intentions to maintain their current plans amid the Big Lead Sports acquisition.
Specific financials on the Big Lead acquisition were not disclosed, so it is not known how much of a multiple of revenue the purchase represents, or how much Chris Russo, Big Lead Sports’ chief executive, will make from the sale. Today’s acquisition marketplace is far different than before the economic collapse of 2008, but other independent online sports properties far outside the top 10 of most trafficked sports destinations sold for far more over the past five years. Yahoo! bought the college recruiting network Rivals.com in 2007 for $98 million. Yahoo!’s 2010 purchase of Citizen Sports Network was pegged by industry sources at $35 million. CBS Corp. paid $43 million for MaxPreps in 2007. Some of those companies, however, had subscription content components that helped drive up their purchase prices — an element that Big Lead Sports did not have.
Other sources said that Russo had been shopping the Big Lead Sports equity for many months and that several media entities passed on the deal, giving Gannett additional negotiating leverage. Talks with Gannett took place slowly and quietly over much of last year. Russo and Big Lead Sports used boutique banking outfit Mesa Global to aid on the transaction.
After a transition period of several months, Russo will depart the company he helped found and build. The former NFL, NBC and New Line Cinema executive has no fixed career plans, and intends to take some sort of extended break later this year. But he said he wants to stay on the entrepreneurial side of digital media, focusing more specifically on social media.
“I think that kind of concentration is where I want to go next, having a more purely social focus and helping bring more marketing dollars into the space,” Russo said. All other current Big Lead Sports staff will likely remain on board with the USA Today Sports Media Group.
The deal marks another aggressive move for the USA Today Sports Media Group as it bulks up its overall profile (see related story). But it also inherits a substantial job of integrating Big Lead Sports’ vast network of sites, and widely varying degrees of content quality, into its portfolio of properties. Company executives said the acquisition will allow it to organize content on a more topical basis, as opposed to the more geographic orientation it now uses. The move also deepens USA Today’s reach into fantasy sports with both gaming and content.
“Certainly getting the additional scale in this deal is important from a sales and monetization standpoint,” said Dave Morgan, USA Today Sports Media Group senior vice president of content. “But what this also does is gives a lot of additional touch points in individual categories, individual sports and allows us to go a lot deeper and a lot stickier in those areas.”
