Last time we checked in with Bleacher Report they were quietly making some changes with a new CEO (who I predicted as a hire) and editorial policies aimed at improving content quality. At the time both moves made sense but it wasn't clear what their impact would be. Fast forward a half year later and they've landed a very robust round of $10.5 million. The news broke early this morning and I was without a working computer for most of the day (bought one today) and was surprised by how many people reached out to me inquiring for more information on this development. Email, facebook, twitter, and text messages all with something like "Can you believe B/R got 10.5 ? Seriously?" 

The first thing I'll say its pretty interesting how limited coverage this got as it seems that Bleacher Report and their PR firm/contact really only pushed this story to certain publications. This mirrors the last major announcement about Brian Grey joining as again compared to other startups the news was a bit more muted considering the significance of the move.  However on the few articles there are on this development, there are a lot of telling comments and if you're a Twitter user I am sure you also got a heavy dose of candid reaction to the news. I think considering the elephant in the room (that many influential and well read content people take issue with Bleacher Report) you can probably see why the PR push wasn't as aggressive as most announcements of this variety.

If you're reading this and want to get a feel for how/why this funding happened, then I am going to ask you to do one thing for me. For just a moment, don't attach any negative or positive stigma to the content of the site. It's just content and we'll get to that towards the end of the article.

Bleacher Report is a digital media company built around content. Their product is advertising and the more articles and page views they have then the more money they can make and guess what........ Bleacher Report doesn't pay for their content. They have overhead like any company but if they have 300 articles published in a day or 1000, there is really no increase in expense to them. While many have associations with their product, let's take a look at their growth the last couple of years, measured directly from Quantcast.

Not to go on a tangent here, but don't be one of those idiots who look at Compete.com numbers and then base a whole opinion or argument on those traffic numbers. If you can get Quantcast numbers, at least you're in the ballpark or pretty damn close. Everything else is pretty much a random number unless they have a public stat counter.

Anyways looking at the charts above you're looking at just ridiculous growth. Page-view growth and audience growth. I'm sure that this trajectory as well as having a advertiser friendly platform (segmented audiences, high impact sponsorships, etc) also led to a revenue chart that showed similar growth.

Another key thing to consider is that B/R has over 1 million email newsletter subscribers to help drive traffic to their site and that alone is a HUGE asset when it comes to valuing a company. Bleacher Report actually has a good presentation on their newsletter program, and its been one of the bigger yet under the radar success stories in this industry as users are getting very customized updates on their favorite teams which is a huge driver of traffic back to the site as well as other external sites that are linked in the newsletter.

When you start thinking about why a VC would invest in Bleacher Report think about the value of having access to the inboxes of a million people (newsletters can have ads in them too), having millions of users, thousands of contributors, a great platform and intellectual property, tons of content, and then that special sauce which is a nice recipe of:

- What Deadspin coined "Google Raping SEO", an issue I touched on awhile back and an advantage that begrudges many big time sports bloggers but one that the folks at Bleacher Report are proud of and make no qualms about having.

- A lot of their content are slideshows. Kudos to them to coming up with a new interface for building them and displaying them. The advantage here being that visitors often are really only reading one article but they'll go through 10 or so page-views with new ads each time.

- They're also one of the few websites that have auto ad refreshing technology. It like charging for refills of soda.....Good for business.

- The before mentioned newsletter not only funnels page-views back to the site but also injects their branding to external content like you see below. Its good promotion for sites that get featured in the newsletter as they find a new audience but B/R also gets some benefit out of it as many people will just paste the newsletter URL (which appends their branded bar on top of the page) and send it to others or post on a message board. This helps get them more subscribers and users and its been suggested that their is tracking code in the bar that counts this as a pageview for Bleacher Report as well. Its a bit tricky but I think a lot of companies with newsletters or that aggregate content have or are doing this. 

   If you take a step back and think about it, Bleacher Report is a hell of a business. The metrics are growing, the technology is very attractive and valuable, the user-base is huge, online advertising is really picking up, the content is free and the site is on steroids in terms of displaying ads. 

  A lot of people I know (even some in the industry) were really surprised by the funding which I found kind of funny. There traffic numbers are on Quantcast and their employee head count is not hard to find out. You also know their prior funding history and how long ago their last round was along with the fact that they've grown quite a bit since then. They've articulated that they are the 5th biggest individual sports websites not counting rollups, so getting funding was not really going to be an issue. It was just a question of when and I thought with Grey (VC AND startup experience) coming in this summer it was probably pretty likely you'd see funding this quarter or next.

 The real question was how much and at what valuation? 10.5 was higher than I expected. I would have had them pegged for maybe getting $6-9 million with a pre money valuation at around $30-45 million.

Whether this round closed before SB Nation's round became public or it played a role in helping the valuation is something to consider. With a $10.5 round I'd probably set the valuation over under at $55 million which means now both SB Nation and Bleacher Report seem to be on track for potential 9 figure exits. Just like Fox's acquisiton of Yardbarker, I think the front runner for acquiring Bleacher Report would be a current partner (they work closely with CBS) as the smart money also would peg Comcast as the likely acquisition partner for SB Nation (Maybe I could start a Sports 2.0 sportsbook?). 

I think another thing people are just not getting is that digital media companies are pretty solid investments. Ad networks/rep firms are beginning to thin out/consolidate, CMS companies and content platforms continue to have issues with monetization and business models, and I am just not a fan of aggregators. If Digg isn't going to make it really big, then you're probably not going to make it at all even if you have some cool technology.

 Content is king and I think we forget that here in Silicon Valley where people are making hardware, software, web applications, mobile apps and social networking apps, online advertising products and technologies and everything else under the sun. Media companies used to be sexy investments. Now certain investors and the tech press have put them at the bottom of the totem pole which is stupid. Content monetizes well, large media companies like buying audiences, and more media companies are looking to tap into more social and local types of content. There has been a strong revival on this front with SBN, Bleacher Report, Demand Media, Examiner.com, Buzz Media, Associated Content, Gawker, etc leading the way. 

The thing about some of the companies I listed above is that some can be classified as "content farms" which you can Google for a more thorough explanation. At first being a content farm was preferred by investors and maybe even advertisers. After awhile a bit of stigma grew as people began harping on the content quality as well as just the editorial direction that content was headed in. Now companies will argue that the label doesn't apply to them and you'd probably say that Bleacher Report's decision to remove certain authors and move to an application process for writing on the site is part of that effort to move away from that categorization.

With over 500 articles a day the law of averages say the quality is going to vary drastically across the board for them and they've had a lot of public backlash in regards to some of their bad content. A lot of it is well warranted as there have been several incidents this past year where stories that fell through the cracks were either completely untrue, plagiarized, or incorrectly attributed to a major reporter as a prank.

Because Bleacher Report has such great technology and distribution methods, its drawn the scorn of many that a company that can at times proliferate low quality or illegitimate content can find such success especially through Google and others. Its a hot topic on Twitter, even with a fake Bleacher Report twitter account satirizing the company, and its a subject talked about in many inside circles within the sports 2.0 world. Still though there is enough good content or at least decent content to keep the site growing and in the end advertisers and investors trust eyeballs over a critical analysis of content. I mean if you weren't following a lot of sports bloggers on Twitter and just stumbled upon Bleacher Report would you be able to draw the opinion you have of them now? That's basically the boat that 95% of the population finds themselves in.

You may think there would be more diligence around content quality but I can tell you having a lot of relevant experience you're just not going to find advertisers or investors who are going to thoroughly go around comparing apples to apples. They can certainly get excited for certain sites or content programs but they never really audit content as that is so far out of there expertise range that a quick once over is enough to get a thumbs up.

All of that said, Bleacher Report is growing. Its growing on all fronts and the site is a cash cow. Free content, refreshing ads, tons of page views per visit, great SEO, etc etc. You may be pissed as hell that what you deem as inferior content is getting rewarded and further promoted. I can understand your gripe. Like the coach's kid getting to start over you while you ride the pine.

All I can say is that you're not going to get an apology nor an explanation from Bleacher Report. Their investors or advertisers probably won't/don't care either as there are just still limited options in this Sports 2.0 space and B/R's size, love or hate it makes sense economically at such a large scale.You may think it doesn't make sense and it just blows your mind as that is the reaction that keeps coming back to me.

What I can tell you is this...

At the end of the day I've never been more bullish on Bloguin and sports blogs in general. There are some very big developments going on in the space right now that i'll share at a later time. Blogs are going to get theirs (promotion, recognition, compensation) ...The good ones are at the front of the line and I know you feel like Bleacher Report just cut the line and brought in a group of 50 frat dudes into the bar you've been waiting in the cold to get inside of for an hour (Analogies and over usage of parentheses are my blog writing guilty pleasures). Stay patient, stay hungry, try not to be bitter, and remember that no matter what you control your own website, brand, content strategy, etc. You're building a personal brand and that's much harder but oh so much more rewarding when you make it. In the end Bleacher Report's model got validated in a big way today, but that certainly doesn't mean that you won't have your day either. Its coming and on that note, Happy holidays and always feel free to drop a comment on our soon to be replaced commenting platform before I kick it to the curb.

 Pretty funny though. I still remember interviewing with a company out of college the day after Maurice Clarett was arrested for this little run-in with the law. All I heard was "Ohio State......How about that Maurice Clarett?". I still got the job but remember being a bit perturbed by that question being asked by every interviewer.

Glad to know the business school has now made some headlines of its own. All in good fun although I'd like to be able to point to more modern day iconic AND positively embraced companies that were born out of OSU than just Four Loko.

Yardbarker sold, Fanball shuttered their blog network, and now SB Nation just spiked the ball in the end-zone after bringing in a very significant round of funding, reported to be $10.5 million. In conjunction with the funding, SB Nation announced they acquired Sports Radio Interviews.

The round was led by Khosla ventures, another top tier VC who joins with Comcast, Accel, Allen & Company, and Ted Leonsis as investors in the company. I am a bit late covering this news so below you'll find some solid coverage from the usual suspects.

- GigaOM

- Dan Shanoff

- Vator TV

I think the real point of emphasis should be on the implied valuation of the company. It was over a year ago, when SBN raised their B round with a valuation of $30 million, bringing in $8 million to help the company grow. At that time, SBN was riding a wave of momentum and while the $30 million valuation was very impressive, it wasn't exactly uncharted waters. In fact at the time, you could argue which company was the lead horse in the pack of sports 2.0 startups of Yardbarker, Bleacher Report, Citizen Sports, Watercooler Sports (now Kabam), FSV, maybe even Open Sports, and SBN.

SBN Growth Over Last Year

Fast forward a year later and Yardbarker sold to Fox, Bleacher Report is plugging along but drawing the ire or many, Citizen Sports sold to Yahoo, and Watercooler Sports has largely vacated the space and essentially pivoted to join the ranks of Playdom and Zynga. Meanwhile reports have SBN's new valuation at a whopping $60-90 million. Sounds too rich to many, but they've 2-3x most of their metrics if not more, so its pretty easy math to get them to that number.

$23.5 million in capital raised and a valuation over $60 million and what you are looking at ladies and gentleman is a company that is likely to sell for 9 figures. While that's not unheard of for a startup by any means, for a digital media company you're in rare company and for sports the only other 9 figure acquisition on the board is Yahoo's acquisition of Rivals. While I self admittingly will cheerlead any development in this niche space, this one is by far the most impressive feat to date.

A lot of this growth you really have to attribute to their CEO, Jim Bankoff, who joined the company a little under 2 years ago. The concept was right, the writing talent was distinguished, and the technology was ahead of the curve. However Jim's been really able to open up doors for the company that has vastly accelerated the growth of the company.

From syndication deals, the capital raised, small but potent acquisitions, smart hiring decisions, and developing their own advertising sales force, Jim has really positioned the company for success and more importantly has grown the scope of the sports blogosphere albeit with the help of an arsenal of proprietary in house engineering and a new wave of content providers.

Jim's also done a good job positioning the company to the public. Multiple times over he's articulated how the company taps into three emerging trends in technology in social, local, and real time. SBN certainly meets the criteria for all 3 which certainly helps its appeal to investors and potential acquiring companies who want to get more active on these fronts.

For instance some venture funds maybe looking to invest heavily in one or two of those categories and by being able to claim all 3 trends, SBN is able to start their fundraising process with a bigger pipeline of potential investors. On the acquisition side, you could say ESPN does have a local strategy but really does not offer any substantive efforts on the real time and social fronts, making SBN a viable target for them although I'd probably give you 100-1 odds that ESPN would ever make such a move.

Another way to look at SBN's attractiveness is it could be classified in 3 different segments: media, online advertising, and technology.

Yardbarker and FSV/FSP/Big Lead Sports sell ads, but they really don't have a lot of proprietary technology  like SBN who is known for their platform and infrastructure.

For long periods of time companies like WeBlogs, TechCrunch, and Digg, were definitely media innovators, but they didn't sell their own advertising making them dependent on others for revenue. SBN's latest round of funding saw them cut the chord there and make inroads with media buyers.

Then there are companies like Automatic/Wordpress, Tumblr, Posterous, who are technology companies who don't dabble as media companies or in online advertising.

By building their own technology (no easy task) and getting traction with their own ad sales team (even harder), SBN has morphed into a triple threat one and one that warrants the lucrative valuation placed on the company.

At this point if the company is truly operating near a break-even point, the cash on hand will likely take them to their probable exit who many believe will ultimately be Comcast although Yahoo and AOL also are distinct possibilities. The upward movement in their valuation also dictates a much different exit process for the company as well.

With their current valuation so high, certain companies may now find themselves priced out of making a legitimate offer. Also the level of buy-in and people who will have to support an acquisition of SBN rises along with the price as a year ago it could have been considered a modest play for a large company. At 9 figures it's a deal that is likely that is going to be looked at a larger amount of people and a deal that a public company will have to articulate the case for as investors and board members will be taking a harder look.

Although an IPO I think is still highly unlikely, at this point I think it enters the realm of possibility although its more like the Niners winning the Super Bowl with Troy Smith at the helm (I've already booked my flight).

I know a lot of people have been asking me my thoughts on how this impacts my company Bloguin. There is an old cliche that when anything good happens to your competitor (something that you're a bit jealous of), a CEO can just say "This move really validates what we are doing," a comment that can reassure any eroded lack of confidence.

In this case it actually applies and I still contend SBN and Bloguin barely compete. First off, I am very friendly with the folks there including Jim. Second is that our companies share writers, advertisers, and community members. The third thing is that right now there are investors who lost out on the opportunity to invest in SBN and there are media companies who know the ship has sailed in terms of finding ways to partner with SBN.

As other blog networks have folded and countless others can't get off the ground or find reasonable levels of stability, Bloguin has emerged as a viable option on many fronts and is currently rolling out a lot of marquee sites and improved technology. Couldn't find a way to work with SBN? Yeah that Bankoff sure has a crowded inbox. I am sure it can be like getting into a club with a bunch of dudes wearing wifebeaters ;). You can probably get a corner table and bottle service if you find your way to me.

We're hitting our stride and while it feels like we're losing ground to SBN, they are seven years old with nearly $24 million in venture capital. At our 2 year mark, I think we've actually outpaced them. This is certainly their day and I almost feel guilty for going on this tangent, but I think you just have to realize that their 5 year head start has us running on different laps. They're setting a blistering pace and that's great because it gets a lot of people excited and paying attention.

While some are insinuating that this big news casts what was once a scrappy startup into a stiff corporate entity, I think its really the coronation of a lot of hard work, smart moves, and good ideas. 2010 has been a crazy year on many fronts and my money is that 2011 will see even more big news for sports blogs. Kudos to the guys and gals there for all their hard work. Its certainly a very noteworthy accomplishment.

It was a little over a year ago I wrote about The Basketball Jones getting acquired by The Score, a Canadian Sports Television Network. Many think it was somewhat of a landmark milestone for sports blogs/podcasts.

For those of you who are unfamiliar with The Basketball Jones, I'll quote something I wrote in my first article, although watching their demo below is probably a better way to go.

For years these two friends and former classmates would wake up at the crack of dawn and record a podcast about the NBA. But it wasn't just a podcast, it was clearly much more as the two really put attention, research, and at times perfection into every nuance of the show. After a couple years, they moved to video all the while building their audience along the way.  The show was comical, the rapport between the two was perfect, the production quality was high end, but most importantly the commentary was right on and very entertaining.

It was great to see the pair make the show a full time venture and joining a major media company. Matt Osten and Jason Doyle, the team's behind the camera production, editing, and management team also joined The Score in a major hat tip to their role in the show's success.

I actually did a little work with the guys when at Yardbarker and some marketing/sales stuff for them directly so their absorption into The Score was something that personally I felt a very small sense of pride in.

But now reliant on a major media company to take them to the next level,  I think a lot of fans were concerned about the implications of no longer being independent.

Fast forward to the leadup to this year's NBA season, and The Basketball Jones came out with a flurry of major announcements that include:

- They'll have their own weekly television show. Yes....TV..typically surrounded by couches, coffee tables, beds, and groups of people. (promo below)

- They'll have a 4 day a week satellite radio show ( The Score Sirius Satellite Radio, Channel 98 (listen live here)

- They've added Scott Carefoot, Holly Mackenzie, and Megan Wilson to augment content on their new blog which will help be an anchor of all things Basketball Jones.

- They/The Score has added the wildly popular Trey Kerby away from Yahoo Sports/Ball Don't Lie.

To put this in perspective, what was a 2 man on air team with the help of 2 friends on a shoestring budget, is now on television, the radio, and apparently hiring writing talent away from a company with a market capitalization of nearly 22 billion dollars. That's just amazing, and you can read more about their story in this great article.

Lucky for me I was able to get Tas Melas and Matt Osten to share some insight into their success with The Score thus far. Below is their interview as well as some fun doppelgangers.

Well, we did a pretty simple cost-benefit analysis: Stay independent, make little-to-no money, spend most of our time on our paying jobs and very little time on TBJ, overwork ourselves, put out an inferior product, and eventually kill each other vs. joining a mainstream company, making a living wage, and being able to focus 100% of our energy on making the best show possible. Once we put it like that, it was a pretty easy decision.

A lot of the skepticism of “selling out” comes from the belief that a mainstream company will, by default, harm an independent show. Our experience at The Score has been really positive in the way they’ve allowed us to keep our creative freedom. They’ve basically said: “We like what you did before you got here, so keep doing it.”

I think we were in a different situation than a typical independent blog which usually has one writer. Being a video show, we have a lot more expenses (cameras, audio equipment, lights, server space, video hosting services, etc…) not to mention that we’re four people. Trying to do it independently just wasn’t feasible for us.

Working with a media company provides value for us in two major ways: resources and distribution. The Score allows us access to both physical resources (like video equipment) and human resources (like a Graphics department) that help us execute our ideas in the most professional way possible. We also get to use their distribution platforms like television, satellite radio and mobile apps that were unavailable to us as independent producers.

You guys has a flurry of big announcements this weekend. Adding Trey Kerby, a TV show, radio show, etc.  How much of this could have been accomplished independently? Walk me through how some of these big changes materialized?

Adding Trey happened because we wanted The Basketball Jones to be more of a full service blog where people could get videos and articles. Every week there was a bunch of stuff happening in the NBA that we couldn’t cover because certain stories didn’t lend themselves to video. Trey was a great fit to be the head writer because he shares our sensibility and approach to covering the league. He’s also really funny and we get along great. We’re also really lucky to have contributors Scott Carefoot, Holly MacKenzie and Megan Wilson on board to add their own unique perspectives to the blog.

The TV show is something we pitched to The Score. We wanted to bring the Jones to a new audience that may not be used to watching video on the Web yet. Being on TV will also allow us to do more with NBA footage and highlights which will be a new challenge for us.

The radio show is our daily web video show that will be repackaged by Score Radio and aired on our Sirius station (Channel 98).

We’ll still be doing the web show Monday to Thursday and our hour-long audio podcast, The Overdose, on Fridays.

Do you feel partnering with The Score, has changed you and the show's style at all? Are you more cognizant that you work within a larger entity or is your affiliation and new audience not factor into how you guys develop content?

Blogs and podcasts should own more significant real estate on these companies’ websites. They are quite often an afterthought on splash pages – they just don’t seem to have earned that respect. The most current and up to date info should be front and center, don’t you think? There also has to be better promotion of podcasts and blogs done across platforms within these organizations in order to inform, promote, and bring users in to the future a little more swiftly.

Bottom Line:

They've arrived and The Score's support, distribution, vision, and forward thinking has everything to do with it. I mean how many bloggers/podcasters have their own Wikipedia page? Everyone involved deserved a lot of credit, but there are also some higher ups at The Score who should be acknowledged.

These guys had worked with Yardbarker and Yahoo and were shunned by major advertisers as well as web video companies like Revision3 (never returned my emails...big mistake). In the end someone it was The Score who went to bat for them and now you are looking at a growing team of full timers who are reaching a MUCH larger audience. Nobody figured out a way to make the show a viable medity entity and now its on the cusp of major notoriety and success. I have no doubt in my mind they'll continue their success and all parties should feel proud as The Basketball Jones is setting the standard in how mainstream media can provide value to independent media entities.

Hopefully ESPN gets the memo.....

Awhile back I wrote about how my previous employer, Yardbarker, had partnered with Fox Sports in an ad sales and content promotion relationship. For that article I sent some questions to Yardbarker's CEO about the deal, one of which asking his opinion on if the partnership with Fox could lead to a future acquisition.

I have always been really intrigued by some of the bigger sports 2.0 partnerships with larger companies as its been my belief that these partnerships could serve as corporate foreplay for a possible future acquisition.....You wonder if these companies are taking a good look at the next wave of sports media entities and are utilizing various partnerships as a first date before bringing the start-up home to Mom and Dad (CFO and CEO).  Pete really didn't embrace or dismiss that possibility.

"I guess that's one way of looking at it. You mentioned some great start ups there -- as long as we all stay focused on creating value, the rest will take care of itself."

Well fast forward less than a year later, Yardbarker is now a part of Fox. The foreplay was rumored to be incredible.

Although financial details were not released I can tell you that the price tag ended up being ^*~ million dollars. Whoa look at that. Something is wrong with my keyboard. I'll fix that later.

There had been rumblings for awhile that Fox and Yardbarker were looking to do something bigger together, so its great to see them come to an agreement here.

First order of business is a hearty congratulations to the team at Yardbarker. They're good people, close friends, fished me out of the business software world, and deserved for this day to come. I never had more fun at a job and I doubt that will ever change. I have a lot of great memories working there and also share a sense of pride in their big day as out of their 800 sites, I am sure I was involved in some way with a modest slice of them.

Enough of the kind words and down to business. Below are my thoughts on what this all means.

For Yardbarker:

Given Yardbarker is an ad supported business and 2009 was the worst advertising recession in my lifetime, its quite an accomplishment to have weathered the storm and to have found their way into the arms of Fox. A lot of similar companies that were founded in the same time frame are struggling or even worst, no longer operational.

Founded in 2006 with some help via financing from friends. family members, academic contacts at Berkeley, Yarbarker focused their business model and broadened their reach. A diverse mix of athlete blogs, original video, community voting systems pushing traffic similar to Digg, and advertising representation for marquee sports blogs began to attract additional capital and notoriety within the sports blogosphere.

In 2008, Yardbarker raised a hefty 6 million dollar round of funding, one that put a lot of pressure on the company to grow aggressively. In a good economy, it would have likely been the way to go but towards the end of 2008 the morbid reality of the advertising recession and venture capital markets set in.

Not even 2 years later Yardbarker finds itself in a select group of advertising based start-ups to have raised under 10 million dollars and been acquired by a major media or technology company. Along the way athlete blogs became less of a focus (Twitter's growth and athlete's adoption of it helped the cause). Yardbarker.com was redesigned a couple of times and the community voting system was stripped out (turned out to be a wise move).

Meanwhile Yardbarker pushed all in on monetizing independent sports blogs. The sales partnership with Fox was a big boost to their revenues and filling unsold inventory with better ad rates also helped revenue while also improving bloggers affinity for the company. Also helping Yardbarker grows its reach and revenues were sales programs that sent bloggers to cool events like the Final Four to do embedded fan reporting segments.

In the end, it probably just felt right to sell to Fox. Startup life and work is very hard and it must have been a daunting experience to rally the company in the face of an economy that wouldn't cooperate. Fox got what Yardbarker did and wanted to extend the relationship. Having worked with Fox, Yardbarker had a level of trust in how Fox would continue to operate Yardbarker going forward.

Could Yardbarker have held out for a bigger payday? Potentially, but the right company was interested and there are only handful of companies that could provide additional value post acquisition as Fox could.

For the employees, I am told it will be business as usual. For the blogs there is some upside for better ad rates and maybe more promotion/syndication through foxsports.com although that remains to be seen.

For Fox:

For awhile now Fox has been syndicating and promoting Yardbarker member sites content. They understood the business and took the next step last year to start selling Yardbarker's inventory. That was a major step as it was a vote of confidence from Fox saying "We like your product...... We can sell your product.... We can make money off of your product....  We think there is a demand for your product."

I am not sure how many campaigns Fox worked with Yardbarker to sell, but in the end they liked having access to that inventory and additional reach. Fox not only got access to the ad inventory but also a creative sales focused company that had experience coming up with unique sponsorships that appealed to advertisers. From my experience, sales people from larger organizations really struggle on this front.

2-3 years ago, ad agencies/buyers were still wary of working with blogs. I mean do you really want to be the guy who says buy ads on Yardbarker opposed to ESPN when you know its going to raise eyebrows? But as campaigns aimed at blogs became more frequent and successful, companies like Fox were beginning to face more inquiries about "social/blog solutions". Yahoo had them, FSV, SBN, and others did as well. Missing out on these opportunities and having familiarity with Yardbarker through previous content relationships helped form their ad buying relationnship which has now materialized into a full acquisition.

Another large part of this deal, is that Fox's total audience size grows substantially as Yardbarker's blogs are now part of Fox's audience. That's not to say that Fox owns them but that Fox exclusively sells that inventory rather than having 2 companies split that responsibility. Many ad buyers are lazy and look at the top 10 sports properties per traffic monitoring companies and make media buying decisions based on those numbers.  Fox adding a significant audience will certainly help them against the likes of Yahoo and ESPN, the two runaway leaders in audience size.

Other things to consider include the fact that Yardbarker.com is very large property and one that will certainly be a strategic focus for Fox going forward. In addition, Fox's last sports acquisition (Scout for 60 million), has really been a under performing entity for them. Buying Yardbarker gives them a new trendier asset, one that brings over a great set of content that can be further promoted or syndicated on Foxsports.com. For instance the athlete blogs and some of the bigger blogs that are a part of Yardbarker may find new opportunities within their new parent company.

For the Industry:

Things are happening. You just might not be paying attention. Comcast, The Score, Fox, AOL, NBC, and Yahoo have all made some moves to acquire technology/content over the last year and a half. I think this is actually only going to accelerate. There is a level of "burnout" that occurs for bloggers as well as startups that have experienced a bubble or a recession like we just did.

More money and more eyeballs are going to sports blogs/sports 2.0 companies and mainstream media is beginning to pay attention. Acquiring or partnering with a sports blog or entity, has never been more beneficial to a large media company. Frankly its a buyers market and media companies are increasingly pulling the trigger realizing that they can't create what startups and independent sites have created. On many levels its a culture thing. You think a company like Fox, CBS, AOL, or ESPN would have ever created, funded, and stood by a site like Deadspin?

Despite all the controversy the site brings, it has a lot of major advertisers paying great ad rates and we'll probably see a day where Deadspin and its Gawker Media sister sites get absorbed into a major media company. This outsourcing of cool, not only helps reinvigorate stagnant brands (sorry Fox but you've been pretty boring from an online perspective for awhile minus Jason Whitlock), but also brings in new revenue sources as there are companies who specifically are looking to get involved in this emerging type of content.

Yardbarker selling to Fox is a validation of the work bloggers are putting in and of the attractiveness of the ad inventory surrounding that content. Its certainly a positive development as other companies will look to figure out their own strategy before its too late (unless you are ESPN and your sole objective is to get video advertisements to auto play wherever you go on their site and on their partner sites).

With Citizen Sports and now Yardbarker off the market via Yahoo and Fox, that leaves Bleacher Report, SB Nation, as well as Bloguin on the market. Assuming Fox and Yahoo are content with their acquisitions for now on the sports side, you would think CBS, NBC, AOL, and Comcast are the likely next candidates to make a move. You'd hope ESPN would get involved as well but there seems to be a strong sense that they're not really a fan of the space in general.

Again kudos to Yardbarker on the major accomplishment.

On another note later this week, I'll have another piece about a blog acquisition that has done frighteningly well in its first year.

Quick note before I get started, I've been doing some writing on awfulannouncing.com, one of my all time favorite sports blogs and the newest addition to Bloguin. If you want in on that action, check out some of the links below:

- ESPN Unvels New Red Zone Like Channel for College Football

- Yuppy Injustice: ESPN GamePlan not in HD

- Two Buckeye Marketing Majors Shoot the Shit (me and CBS'S Clark Kellogg)

Enough self promotion for now.

It was a little over a year ago when it was announced that NBC had bought Pro Football Talk. That was the headline in most publications, that NBC had acquired the uber popular NFL focused site. But if you dug a bit deeper the actual deal was for exclusive content from the site, while site founder Mike Florio actually retained the website.

Florio will still own the website but has sold exclusive rights to its content to NBC.

Fast forward more than a year later and PFT's affiliation has been an overwhelming success. Traffic has climbed, the site's influence and awareness has grown, PFT was featured many times over on Sunday Night Football, and NBC launched a handful of similar blogs on their website seen below.

Recently SBJ did a great article on NBC's relaunch of NBCSports.com which focused on the growth of NBCSports.com in its first year with PFT as a partner site.

The redesign will expand on already active plans for the NBC site in which the PFT model — featuring a blog-based effort as an entry point for the site’s coverage of a league — has been replicated for other major sports, with HardballTalk.com, ProBasketballTalk.com and ProHockeyTalk.com all showing strong growth of their own.

NBCSports.com generated 7.845 million unique visitors in July, according to comScore, ranking the site No. 10 among U.S. sports destinations and more than twice the 3.783 million visitors seen in the same month last year.

The article goes on to say that the largest chunk of 7.845 million UV's is from PFT.

First and foremost, I think it needs to be said that while I really like a lot of the things NBC is doing online, the whole blog based strategy is really a great imitation of what Yahoo Sports has been doing for 3 years now. Similar how I can't take credit for coming up with Bloguin's model as it is a variance of the SBN or MVN model, I would warn against crowning the folks at NBC as pioneers of digital media.

The next thing to consider is that NBC is one of many mainstream media companies looking to reinvent itself online in regards to sports. SI has handed over control of SportsIllustrated.com to Turner Sports, Sporting News has gone through a redesign and new content strategy, and CBS as well Fox have been implementing some new site designs and digital partnerships as well.

At a high level, you have to think that these companies grew a little sick of ESPN dominating online although didn't think there was much they could do about it. As Yahoo Sports surpassed ESPN in terms of audience size and companies like SB Nation, Yardbarker, Bleacher Report, and FSV started cracking the Top 10 list of digital sports properties, I think the higher ups at these companies decided it was time to get off their hands and reinvent themselves online especially considering that both Yahoo and ESPN were reporting record revenue online even in a rough economy.

NBC made the smart move to get PFT affiliated under them and to own all of their content. Over the last year its become the identity of NBC's digital efforts. With NBC likely to be joining Comcast's portfolio pending regulatory acquisition approval, you have to wonder when NBC and PFT will go from engaged to married.

For those unaware of the pending Comcast acquisition of NBC, its the hot topic amongst sports Internet professionals and I'm sure you'll read more about this on the site in the coming weeks/months. Given NBCsports.com is gaining momentum with PFT, Comcast owns Versus, has an investment in SB Nation, and Comcast is quickly growing its Regional Sports Affiliate Network, it seems there are a lot of pieces in place to give ESPN its first viable competitor spanning multiple forms of media.

ESPN nor any MSM website has anything like a PFT. While I'm a fan of National Football Post, PFT is potentially the most successful sports blog on the web and could fetch a very significant 8 figure amount if/when NBC decides to pull the trigger.

My best guess is that NBC won't make an offer until a) the acquisition by Comcast finalizes b) the current PFT deal with NBC nears its halfway point . Nobody I have talked to has any insight on just how much that deal was for and the duration of the deal (isn't it great when everyone abides by their NDA?). I'd surmise that with sports being a big point of emphasis for Comcast/NBC going forward and the level of comfort and success that PFT has had with NBC, its likely we could see PFT bought out entirely sometime in late 2011.

It would be quite the dramatic move if another party jumped in and made a run at PFT before anything with NBC was finalized. Its very possible another MSM company could sniff around and maybe even make a bid in hopes of landing the site or even driving up the price on NBC. The current deal may also have some restrictions on PFT's ability to solicit these type of offers or give NBC exclusive rights to match any offer.

Until PFT is owned by a mainstream media company it remains the largest individual asset on the market and the one that's probably the most attractive to advertisors. What price it will ultimately fetch remains to be seen but until more is known about its current deal and Comcast continues to manuever towards clashing with ESPN, many including myself will look on with intrigue as two iconic brands continue to benefit from its current relationship.

Although this hasn't been 100% confirmed at this hour, it looks like Ballhype.com along with its sister site Showhype.com as well as Daily Radar have been shuttered by their parent company, Future US. Below is the screenshot of what you get when you try to reach all 3 of the sites.

Some bloggers are holding out hope that maybe the site has just been hacked but former Advisory Board member Alana G seems to confirm on Twitter that the site is done. I'll concentrate most of this blog on strictly BallHype opposed to the other properties that are being retired with them as my knowledge of the other properties is very scant.

The move seems to be oddly timed considering the return of football is a couple weeks away in addition to the fact that the site just underwent a redesign. Ballhype also seemed like a site that didn't need too much resources as the content and voting was all done by users and not editors. Most of the work behind the scenes I am guessing was on the technology front.

In the end there is no doubt in my mind that this decision was financially motivated. If you recall, Ballhype and Showhype were purchased for reportedly about $3 million in 2008 by Future US, which is primarily a niche magazine company. Some thought it would have been wise to holdout for a larger payday, but given BallHype was founded by a couple who had not raised any venture capital and the site had no revenue because they didn't have advertising programs, in retrospect it was a well timed exit. In the first 90 days after the acquisition the economy collapsed and I think its unlikely to think it could have garnered a higher valuation since.

For those unfamiliar with BallHype, it was essentially "Digg For Sports" an expression that was bestowed on them by many publications which also was thrown around in the early days of  my former employer, Yardbarker,  when their homepage had a similar community voting system. At its core, Ball Hype was a democratic way to promote content. If you thought you had great content, then depending on the subject matter and your ability to round up votes,  users could "hype" your content allowing it to be showcased higher on ballhype.com.

Some of my finest traffic days here at benkoo.com came with some help from Ballhype and a lot of the bloggers on Bloguin and guys I've worked with at Yardbarker were heavy users of the site, so it certainly is a sad day as many will lose this resource in their arsenal of ways to promote content.

I think the closing of Ballhype is especially tragic due to the fact that it was bought out and is now closing only a hair over 24 months later. A lot of hot startups break their backs trying to get an exit to a larger media company thinking it will allow them to continue to grow. The truth is many larger companies just don't have a good feel for operating a startup and often have cultural issues with the community or the niche area in which they are operating in. As more sports blog entities find their way to greener pastures like The 700 Level, The Basketball Jones, The Big Lead, etc, you have to keep your fingers crossed that those entities continue to thrive and that corporate politics and cost cutting don't lead to the demise of some this genre's biggest success stories which seems to be the case here.

Below are 5 Reasons Why Ball Hype Seems to be Done for Now

1- Decling Traffic and Community Shift

First and foremost, the site was slipping in terms of its significance. See charts below.

The chart above is the total amount of monthly visitors BallHype attracted. As you can see its been mostly in decline and clocks in at about 1/3 of its peak audience on October of just last year. While some of this may have just been seasonal declines, the chart seems to show that the audience is about half of where it was a year ago. Obviously this was probably a big part of the decision although nearly 800k unique visitors is still very significant and you'd think with the return of the football and other sports they'd be likely to get back to a million. Below is a look at the page views which paints a similar negative trend. Only averaging 2 page-views per visitor is also not an encouraging stat.

I think another item to mention in relation to this drop in traffic is that the effects are really felt in multiple ways. Less traffic means Ballhype can't send as much traffic to blogs that promote their content. Less outbound traffic means bloggers are less motivated to use the site.  With quality bloggers not using Ballhype and the decrease of traffic you also have not as many votes on the site meaning the content filtering is not as good. All of these issues are intertwined and probably helped lead to the death spiral. Also similar to Digg, many users complained that mainstream media entities like ESPN was getting a lot of the promotion when the initial appeal of the site was to help promote content away from major portals.

Another thing is that I believe Ballhype after the acquisition started even smaller niche sites covering things like Fantasy Sports on its on hype style website which only further fragmented their core audience.

2- Unappealing to Advertisors

Out of the aggregation sites, really only Digg has been successful from an advertising perspective. I can't recall what type of advertising programs BallHype had if any, but can attest that BallHype failed to garner a lot of buzz in the advertising world. Whether that was a failure on their advertising partners and sales team or aggregators are just unpopular as a whole, BallHype seemed to be stuck at a low level of revenue per page comparative to other emerging entities like SB Nation, Yardbarker, Bloguin, and Bleacher Report.

3- Other Sharing Options

Twitter's really blew up right around the time BallHype was acquired. Many in this business think Twitter is this biggest traffic driver for blogs and certainly it displaced Ballhype for many bloggers as their primary focus in terms of promotion. Facebook too has revamped their ability to connect users to external content (fan pages, like plugins) and with the usage of plugins and API's a lot of this ability to promote is done automatically and to a wider audience.

Meanwhile general plugins that allow you to promote via tools like Reddit, StumbleUpon, FanFeedr, and Twackle have also encroached on BallHype's turf over time. SI's Hot Clicks and Bleacher Report's Newsletters are also now very popular in terms of finding new content.  Essentially although promotion of sports content is a niche field, it got oversaturated very quickly.

4- They Couldn't Find a Buyer

I would think that Future US made some type of effort to gauge interest in a buyer. While 1.5 million page views is probably not enough to really excite a lot of companies, I do think BallHype is significant enough from a brand, technology, community, and traffic standpoint that it had value.

My guess is that either they wanted to pull the chord quickly and didn't bother to really investigate finding a buyer or more likely they couldn't find an entity who would really keep the site on a similar path the original vision of the founders.

5- The Internal Support Eroded

For any large acquisition, there is an internal champion. Someone who says "Let's do this" and attaches their name to the strategic move. That person has to mobilize support, capital, and plan out the post acquisition fit into the bigger company. Once the smoke clears, you have a smaller startup that is hopefully well assimilated in a larger company who understands its needs.

But all too often it goes the other way and the acquiring company grows skeptical of their new asset. Resources that are needed can be withheld, decisions can be vetod, and focus can drift to other areas of the business.

The fact that on the surface its pretty clear that BallHype was losing money, its relevance was eroding, and potentially a lot of people involved on the acquisition on both sides may have left the company as time went on ,was most likely the larger driving factor that got us here today.

Where Do We Go From Here?

There could still be hope for a BallHype relaunch either with Future US or maybe a buyer comes to the table because of the shutdown. That would be ideal imo, to have some really sharp folks who get the space to come in and roll up the sleeves to make it a viable entity and valuable asset to the blogosphere.

If not, its unclear if anyone will ever fill this void. Digg does have a sports area, Yardbarker used to have a competing voting system, and Twackle seems to be getting some level of traction, but to recapture the adoption, goodwill, and significance BallHype would likely be a very uphill battle.

Another thing to consider is that really BallHype was just democratically curated sports portal. While its a great concept, each sports fan can tap into many great bloggers daily link dumps/roundups as a lot of bloggers have shown great ability to find and promote great content from around the web.

In the end it didn't feel like someone pulling the plug but more like someone pulling the rug underneath a large amount of bloggers who had a connection with the site whether that connection was in the past or still alive. You have to wonder what Future US's expectations were for BallHype when they bought it and how much money they are really saving by making this move. I think its possible that similar to Family Guy, there may be enough community support to have the site make a comeback but at the same token its going to be a lot of work and an investment so this really could be the end of a historic cog in the rise of sports blogs.

RIP BallHype. Like all good things, you went too soon.

On the heels of Sports Illustrated deciding to yield control of their website to Turner Sports, Sporting News has opted to ship off the popular The Sporting Blog to SB Nation. A very interesting move, one that was probably aided by the fact that SB Nation's Senior Editor, Chris Mottram (Jaime Mottram's brother and FanHouse guru), was actually the initial head of The Sporting Blog. From today's announcement on TechCrunch:

Launched in 2007, The Sporting Blog is meant to be a slightly more fun take on sports news. But as SportingNews, an outfit that is well over 100 years olds, is moving towards a more comprehensive coverage approach, they believed SB Nation would be a great new home for their blog.

While SB Nation has been putting a lot of work into their regional sites, The Sporting Blog content will help maintain their flagship site and inject some fun into it. The Sporting Blog archives will also be maintained a preserved, SB Nation CEO Jim Bankoff says. Terms of the deal were not disclosed — though we hear from sources close to the deal that little, if any, cash exchanged hands.

Its really hard to make sense of this deal on a couple of fronts, but if you read between the lines it seems as if SB Nation came to the rescue of The Sporting Blog which inexplicaly may have been on the chopping block. Somewhat of a bold ascertation but that's what all the signs point to including:

- The TechCrunch article blatantly says this wasn't really a cash acquisition.

- Other than Michael Tunison and Andy Hutchins, the other 7 writers will not be moving over with the blog.

- Dan Shanoff, one of the displaced writers, wrote "My column's most recent home is traded to one of my favorite sports media companies." It's very subtle but the word traded is a big clue.

- Other contributors are insinuating that there is more to the story and that The Sporting Blog as we know it will not continue.

- The overall tone of the announcement on the Sporting News is somewhat somber. If SBN has approached them, offered them a lot of money for the site, you would think it would include all of the writers and The Sporting News would be a bit more celebratory about the move. Plus its inferred in the TC article that The Sporting News pulled the plug and then gave SBN a call . Again to quote the article, "But as SportingNews, an outfit that is well over 100 years old, is moving towards a more comprehensive coverage approach, they believed SB Nation would be a great new home for their blog."

Comprehensive coverage? I would think that would include 9 great writers who are revered in the sports blogosphere. Guess not.

-  Its not really articulated if thesportingblog.com will redirect to SB Nation or become its own site as part of SBN. Its very possible the site URL and the brand may actually not be involved with this deal. We should find out soon, but for now its seems SBN is really focusing on the fact they are getting the archives which makes me think that they were in danger of being deleted and SBN stepped in.

So maybe I am reading between the lines a little too much and connecting dots that aren't connected (feel free to chime in in the comments), but it seems obvious that this to some degree just fell in SBN's lap. That being said that doesn't take away from positive implications of the move.

What this means for SBN

First and foremost Tunison and Hutchins are 2 great assets to have on board. I think the quality and quantity of content especially from non journalists is becoming more of a priority for startups in this space. Its something we're working to improve at Bloguin, something that Yardbarker took some flack  for at Blogs With Balls, and something Bleacher Report is looking to change as their brand has taken a beating over the past year or so.

With SBnation.com as well as the regional sites becoming more of a focus for SB Nation, I'm sure having two talents like Tunison and Hutchins will certainly help as SBN continues to differentiate themselves to publishers, advertisers, and sports fans. Its unclear what they'll do for SBN ( a new incarnation of the Sporting Blog or something else entirely), but its something to keep a close eye on.

It's also noteworthy that SB Nation's prestige seems to be opening up doors for them at this point. This really isn't a major tech story, but TechCrunch thought it was newsworthy enough to write about. Also the fact that it seems SBN was sought out by Sporting News for this deal says a lot.

Dying to know what they gave up in the acquisition/trade. If I had to guess, I'd say they'll be promoting something or other for the Sporting News (the magazine, special editions, sporting news articles similar to their syndication relationship with Yahoo, Fan House, or Comcast). We'll see.

The other interesting item is that SB Nation announced they hired Anthony De Rosa to run a Tumbr blog for SB Nation which can be found here. Not too familiar with De Rosa so I'll hold off on any comment on the hire for now. I think its pretty interesting that SB Nation is launching a blog on Tumblr though given how well received their own proprietary platform is. I'd love to hear the rationale behind this.

Tumblr certainly has a unique style and brings its own flavor of presentation and community interaction so its not crazy but certainly an interesting decision. For a company that really touts their platform (and rightfully so), they must see a lot of unique value in the Tumblr platform that couldn't be replicated easily within their current platform.

What this means for The Sporting News

Well we don't really know what happened behind the scenes here but this is peculiar move. While The Sporting Blog wasn't a massive web property, it still did a good amount of traffic as exhibited below.

Not sure how they paid the writers but it seems likely they were losing money here. Still though it would have likely been a very small amount of money for a big company and I am sure The Sporting Blog could have been tweaked to be profitable if need be.

Also typical visitors of The Sporting Blog are visitors that are more engaged than normal Sporting News visitors. Its also likely that a good chunk of these visitors were only on The Sporting News website to read The Sporting Blog which is kind of sad because you'd hope it would be the other way around to a certain degree.

As noted before, this move occurs a little over a week after Sports Illustrated announced they'll let Turner Sports who also runs digital properties for Golf.com, nascar.com, nba.com, and PGA.com. While Sporting News is going to continue running their website, its very questionable what the motives were to cut The Sporting Blog loose considering how strong of a brand and following it had.

I give credit to the Sporting News for finding the blog a new home as well as taking the initiative in 2007, when sports blogs were still not mature. But the sudden scuttling is a disappointing on many fronts and one that really could be elaborated on.

My total stab in the dark goes something like this:

The content higher ups at The Sporting News weren't keen on the Sporting Blog. It was like the cool corner of a dive bar that was too loud and young for the regulars. This has happened before when a bunch web 1.0 people in charge at AOL got a little jealous/critical of Fanhouse's stewardship under the Mottram brothers which led to them leaving.

At the same time, Yahoo is dominating with their sports blog coverage led by Jaime Mottram, and entities like NBC Sports with their impersonation of Y! Sports blogs as well as SB Nation, Deadspin, The Big Lead, FanHouse, and hell even Bleacher Report, became more viable entities that competed with The Sporting Blog.

With the blog space getting crowded and Sporting News needing a new way to differentiate themselves, they opted to tap into the genius of Buzz Bissinger and shutter the Sporting Blog to be blog free for the time being. This was done under the guise of improving their brand and cost cutting. They realized just shutting down something which had a lot of popularity and goodwill would not be good so they either reached out to SBN, or word leaked out to Chris Mottram who was the original visionary behind the site and a deal was brokered that didn't require much capital.

Again none of that is substantiated at all  but given the lack of details, this is the most likely scenario in my mind. If anyone wants to throw out another theory or shed some light who is in the know, go for it.

Update- A couple of people replied that the theory above is close to what happened. Below is a Tweet from Chris Mottram. Also other people have indicated on Twitter that Brian Cook will be joining the fold which makes sense as I've heard his former college football blog will be switching its affiliation from CBS to SB Nation.

Jeff Price- Head of Sporting News Digital

Another funny thing is that back in February, The Sporting News named former SI executive, Jeff Price, as their head of digital. He quickly axed fantasy games (probably a smart move), but was very vocal that they might look to make some acquisitions. In particular the author eluded to The Sporting News acquiring SB Nation or something like it in the future.

"Price led or took part in a number of investments and acquisitions while he was at SI, including the acquisitions of FanNation and Golf.com. Will he be shopping at ACBJ? “I think the reality is we’re going to look at the marketplace really hard. If we see gaps that really need to be filled, buying is one way to get there. But our core  competency is not going to be a tech company.”

Fast forward less than a half year later and The Sporting News hasn't bought anything. In fact the startup that people suggested might be of interest to them, actually acquired a large asset from them and apparently for not much at all. In the end this goes down as a loss for The Sporting News and a win for SB Nation. Regardless of what the motives were behind this deal, The Sporting News is losing a popular property with great content, SBN is adding 2 great writers and a lot of content, and unfortunately 7 high quality contributors are now without that platform and income although can be found elsewhere.

I hope to have a follow up piece about something similar in the works in the coming weeks, but for now The Sporting News becomes another notch on bedpost for SB Nation to go along with Yahoo, CBS, NHL, and Comcast as mainstream entities that have shown SB Nation some love.

If you are not a college football or basketball fan you probably are not intimately familiar with Scout and Rivals, two competing college sports networks. Although their audience is limited primarily to America's most fanatical sports fan-base, their impact on the online sports digital world and the companies' back stories are somewhat riveting.

Things have been mainly quiet for the two online publishing giants post mainstream media acquisitions. Scout has flown largely under the radar since they were acquired 2005, when they were acquired by Fox for around $60 million although their leadership team moved on in the years since and there was this ugly lawsuit settlement that they somehow managed to keep out of the public's eye.

Picture of Shannon Terry

Rivals too has been eerily silent since Yahoo acquired them back in 2007 for around $100 million dollars. It was reported over a year ago that Rivals' CEO, Shannon Terry was leaving the company, as he seemed a bit reluctant to move to the West Coast to rub elbows with the Yahoo brain trust.

Meanwhile ESPN too has had their own recruiting network problems and I've voiced some skepticism about their affiliate models on a couple of different occasions. Now it seems ESPN's foray into the college sports/recruiting space may be winding down as a handful of their largest affiliates are jumping ship including my other writing home, Bucknuts.com.  Along with a lot of former ESPN sites it seems a 24/7 will be plucking a lot of great publishers from the likes of Scout and Rivals for their formal launch which should be happening in the next 60 days.

From Mr. Bucknuts announcement yesterday.

24/7 is a new effort of which Bucknuts is on the ground floor along with another 20 or so of the industry’s largest web sites. It is headed by Shannon Terry, previously the founder of Rivals.com. Terry served as Rivals’ Chief Executive Officer, overseeing the corporate strategy, new product development and day-to-day management. He was named to the Sports Business Journal's Forty-Under-40 in 2006 and 2007, and the Forty-Under-40 Hall of Fame in 2008. Terry was also named to the trade publication's 20 Most Influential People in Online Sports list in 2007 and 2008.

 

This is quite a jarring splash to the online digital world even outside of college sports and I'll make that connection in just a bit. But before we get to the impact of this new network and what I expect to see from them as well as things I'd want given I'll be writing on their platform, I thought it would be wise to drop some knowledge on the Rivals, Scout, ESPN saga that has been playing out over the last decade. It quite an adventure.

Venture Capital, A Failed IPO, Bankruptcy, Fire Sale Acquisitions, Competition, Big Acquisitions,  Lawsuits, and Departures

Let's rewind to the late 90's. Did you have an email address back then? Did you even own a computer? If you did how did you use the web? I bring this up because it was a whole different world, but things were changing and probably a bit too fast.

Jim Heckman, the son of a former Washington football coach, started Rivals noticing that the web was changing how college sports fans were getting their information. Local newspapers did an okay job covering colleges, but the coverage was always a day late and a bit lacking in some areas.

For the real diehard fans, college sports is year round because recruiting is year round and each fan base has a passionate core group of fans who lust for as much recruiting information as they can get their hands on. Its almost kind of a disease as these fans impatiently try to will top recruits to their school and obsessively follow the entire recruiting process for dozens of players every year. Recruiting never stops, developments happen daily, and fans wanted more than what local newspapers and television could offer. They also wanted to add their own two cents about every single development along the way.

With this in mind Heckman started Rivals, hoping to cover the entire college landscape with a site staffed with full time reporters whose job was to constantly dig up the freshest recruiting news, analyze any developments, and encourage discussion in forums. Obviously the coverage of the actual games (football, basketball, other sports) were a part of the content mix, but it was the recruiting information that got recruiting junkies to pay $10 a month to get all the good stuff thanks to a pay-wall that always made overtures to your wallet because you just had to know where the next Joe Montana was visiting this upcoming weekend.

The network filled out. Some of the sites were new and owned and operated by Rivals, but some were independent sites who signed up as a partner to Rivals. Life was good and the company filed for an IPO at the height of the Internet bubble. That's where it gets interesting.

Revenue was coming in the door and the company had raised an amazing $80 million but the dot com bubble ended any hopes of an IPO and worse yet the company was running out of money. Hard to think what happened to all the money but you'd think a lot of capital was spent on hiring writers, signing up sites with bonuses/guarantees, etc, but still that's a massive amount of capital that was spent. You could probably chalk some of it up to the times as startups had no fear of burning venture capital dollars. Another thing to consider is Rivals tried to branch off to other sports which probably inflated overhead and ultimately could have been the fatal move.

With Rivals in danger, Heckman left the company/was fired and Rivals began to wind down operations and filed for bankruptcy proceedings. But Heckman found a new group of investors who wanted to buy the company and mobilized to do so.

"I will dedicate my life to making this company work for all of you, because I understand that you are the only important people in this idea. I feel that was lost, but I ask that you allow me to bring our family together again for one more try," writes Heckman, who founded Rivals.com in 1998 but then was ousted as CEO last summer. He then goes on to ask publishers for just nine months to prove his concept."

Things got interesting though as a group led by Shannon Terry and Bobby Burton also wanted to buy Rivals now that it was a firesale price and succeeded in doing so in 2001. The details of the takeover are shaky at best but from what I've gathered, Heckman and his group were real close and there was a lot of loyalty to him by the handful of people still running Rivals in its finals day, but in the end the Tennessee group won out and Rivals had new life.

Picture of Jim Heckman

But Heckman and his group moved on undeterred and you have to tip your cap to Heckman who raised more money despite losing over $80 million at Rivals and getting fired as he raised $1.8 million almost immediately after the loss of Rivals and subsequently dozens more millions in the years to come.

Initially Heckman named the company The Insiders but it later changed to Scout and up until today the companies share a fierce rivalry. In fact the two companies went to court over publisher recruiting tactics as both companies looked to scoop up the best and biggest sites on the web.

Tension between Rivals and Scout resulted in a series of lawsuits several years ago centered on tactics used to lure individual team site publishers after the original Rivals folded. The companies settled in 2003 by agreeing not to disparage each other and to abide by publishers' contracts, according to the Seattle Post-Intelligencer.

''It's very heated between them,'' said Drew Champlin, who worked at Rivals.com's BamaOnline site for six months. ''On a scale of 1 to 10, it's probably 100.''

Scout again went down the path of spreading a wide net of covering multiple sports while Rivals stayed focused on college sports. Both companies matured, began to bring in 8 figure annual revenue, all while growing their audience. There were rumors of ESPN, AOL, Yahoo, and Fox looking at both companies but in the end Fox purchased Scout on the heels of their acquisition of Myspace in 2005 for around $60 million. This acquisition really flew under the radar to most but was a larger development than it showed on the surface.

By 2005, the economy was beginning to churn again and in particular online advertising was beginning to become a major growth market. ESPN was entrenched on television, SI owned print, but who would conquer online? ESPN had the lead, Yahoo was making some noise, CBS had made some moves, and now Fox thought they could make a splash by adding Scout. Not only did they pad their audience by several million monthly visitors (cutting the ESPN lead dramatically), they now had a large network to grow out various local offerings as well promote the larger Fox Sports.

But things got real hairy pretty quickly for Scout. There was talk that Fox wanted to somehow make Scout "MySpace Sports" but apparently someone with an IQ over 100 put the kabosh on that. Scout's leadership team also began to leave and with the company in Seattle and Fox in LA, it seemed to further stagnate any type of progress with the company. Technology seemed to become a pain point as well as a cataylst for an exodus of some of their largest publishers including Bucknuts (this actually in a round about way led to me writing for them).

The publishers banded together and sued Scout claiming Scout was skimming online advertising revenue and subscription revenue in addition to a lot of other gripes that would fall under general breach of contract. Scout/Fox settled the lawsuit to the tune of $5 million+ , a rather large admission of guilt. It was about at this time that Fox was getting publicly trounced for their inept coverage of the BCS bowls (Fox had no NCAA games all year but somehow had the BCS bowl rights in another zinger of an idea). Between the BCS broadcast debacles and lack of any substantive progress with Scout as well College Football News (also acquired by Fox), you have to wonder if the suits at Fox just decided to focus elsewhere.  The 5 million dollar settlement combined with the legal fees and the realization they bought a lemon of a company has seemingly dampened any chance of Scout being an intricate part of Fox's digital strategy going forward. Its the black sheep of Fox digital at this point while Myspace is merely just the very public black eye.

Heckman actually stayed with Fox and rose the ranks making inroads with Rupert Murdoch being his lead negotiator in the infamous Google Myspace seach deal. That's a story for another day, but at a high level Heckman and Fox flat out jacked Google to the tune of $900 million and Myspace has been lazy ever since as the checks kept coming from Google. Years from now this maybe looked at as the turning point in Facebook vs myspace and with the deal ending very shortly, myspace's future is very much up in the air with an incredible amount of people leaving the company/jumping off the sinking ship.

Heckman would later leave to start 5to1 media, an online advertising company with a good concept but with a lackluster reputation in the online advertising world.

Meanwhile that group in Tennessee led by Shannon Terry did a pretty solid job with Rivals and eventually became profitable. In 2007 Yahoo made a bold move and shelled out $100+ million for Rivals. With better technology and a more focused vision, Rivals outpaced Scout and more importantly avoided any litigation issues. Yahoo who was breathing down the neck of ESPN in terms of online dominance thanks to superior fantasy offerings, a new war chest of writers, and a growing emphasis on sports blogs after hiring Jamie Mottram away from AOL. The Rivals acquistion now gave Yahoo a larger audience than ESPN, a distinction that helps greatly with online advertising sales.

By the time ESPN realized that being second to a West Coast internet company was hurting their online monetiztion, they rolled out a collection of initiatives all of which are ongoing and somewhat controversial. ESPN partnered with Bucknuts as their first external affiliate and later locked down a  lot of the other large Scout publishers who left and sued. ESPN city sites like ESPN New York as well as blog networks like SweetSpot and True Hoop were additional attempts to build their aggregate number to retake the online lead away from Yahoo. If you've read my stuff in the past, you know I am very critical of ESPN affiliate models and the lack of value they provide to publishers. That being said its no surprise that Bucknuts and a very large chunk of the ESPN affiliates are now leaving to join 24/7.

More than a year ago Terry left Yahoo (probably when his non compete ended). Just like Scout and Fox, it seemed Rivals being so far away from the parent company in Yahoo really impeded growth.

Fast forward to today and 24/7 sports is on the verge of launching with a very impressive dozen or so publishers, many of which have announced their new direction similar to Bucknuts. These aren't just websites, but in many cases the number 1 website for some of the most vibrant fan communities in the country. Many of which seem to be disgruntled Yahoo/Rivals publishers or maybe they're just enamored with Terry and the team in Tennessee.

Besides various conversations I've had and some internet chatter on sites that are joining, there really isn't a lot of information about 24/7 at this time. I reached out to them for a couple of reasons including to get more info but haven't heard back. Between their website, photo account, and twitter acount I've been able to piece these facts together:

- Shannon Terry is CEO.

- Bobby Burton maybe joining

- Ronnie Sanders a former SEC recruiting Director is also involved

- They've raised a sizable amount of capital

- They're located in the same area as Rivals initially was (Brentwood, Tennessee)

- They are working around the clock on the engineering side. It seems the goal is to get the sites all on a new platform including message boards by the start of the season. The idea of migrating so many large sites, users, forum posts, articles, etc spanning multiple platforms almost makes my stomach turn.

- The network will not only launch with size-able reach but will put a dent into Yahoo and ESPN whose number will go down because of the defections

- In addition to a tremendous list of sites, they've added recruiting gurus Gerry Hamilton, JC Shurburtt, and Bryan Matthews to the fold.

View of 24/7 Sports office from their photo account.

Frankly with ESPN, Scout, and Rivals you think this would be a crowded space, but really this is a smart move. There is a lot chatter that Scout is going to be slimmed down substantially as many sites are losing money, ESPN's network is basically imploding thanks to 24/7 Sports, and Rivals while viable is also taking a HUGE hit.

A lot of startups like SBN, Yardbarker, FSV, Bleacher Report, along with media companies like CBS and NBC actually benefit from this as it looks like the front of the pack in Yahoo, ESPN, and to a lesser degree Fox will be losing some ground in terms of network audience size.

This opportunity only exists because 3 major media companies in Fox, Yahoo, and ESPN have failed to really find a model or a technology offering that is viable to publishers, advertisers, and most importantly visitors and subscribers. Blogs have also been eating away at these recruiting sites for quite awhile, but at the end of the day you still need full time people calling and constantly tracking the thousands of high school recruits spanning both football and basketball.

Obviously Terry and his people didn't like Yahoo's execution and plan with Rivals and decided to have another run at it. I am sure Yahoo is extremely irked that the guy that sent a huge check to buy Rivals is now jacking some of their biggest properties, but regardless whatever value proposition 24/7 is shopping, investors and publishers are eating it up.

Without anything to review its hard to say just how they'll be different from the legacy recruiting networks and just what they've promised to publishers in terms of things like equity in the new company, cash buyouts/acquistions, advertising guarantees, bonuses, etc. Potentially some site owners were offered full time employment as deal clinchers.

I'd surmise some amount of capital was spent to get these larger publishers on board in hopes it would spur smaller publishers and even just talented journalists to give 24/7 a look.

In terms of technology, I am on pins and needles to see what they came up with and when they'll be rolling out the platform. Rivals and Scout particularly have really failed here and technology, especially web applications, and programming languages have made major advancements since Scout and Rivals were architected.

I am hoping to see major upgrades in terms of message boards, recruiting databases (Google Maps Mashup please!), commenting, video, mobile apps, and live chat (seriously just use CoveritLive... Scout and Bucknuts use the worst chat programs known to man). They'd also be wise to fully utilize web 2.0 technology like custom widgets (no network has grasped this concept yet), blog syndication/promotion, twitter, Facebook, and social sharing options. Reading between the lines, it looks like a lot of this is in the works.

When the curtain is pulled back (who knows when that will be), they'll be live with some of the most passionate fans in the country and an audience that should span 2 million+ and maybe much higher. Its hard to say if 24/7 will conquer this niche, flush out competition, or fall somewhere along the way.

Either way I am excited to see a new burst of innovation/competition in the space as well as departing ESPN, a company whose digital ineptitude was souring my ambition to create content on Bucknuts. I'll probably do a follow up piece with more thoughts post launch. Until then, best of luck to the guys there as I know they're burning the midnight oil racing to get things just right for the launch.

Awhile back I wrote an extended piece on why I didn't like ESPN's affiliate model network.  Currently ESPN has three different external networks which span the NBA (True Hoop), MLB ( SweetSpot), and NCAA (not named). The piece I wrote back in April seemed to solicit a lot of reaction including:

1- A handful of really nasty and unprofessional emails from ESPN. One of them went out of the way to point out that the very few select bloggers who do get paid by ESPN, actually make way less than I suggested. Ok.... I had it wrong. ESPN does NOT pay very select bloggers a GOOD monthly stipend, but rather pays select group of very select bloggers a very SMALL stipend. My bad.

2- Support from sports 2.0 and online advertising professionals who were glad that I accentuated the case against ESPN

3- Support from bloggers for explaining how and why their various network models were flawed.

It seems that my take has been embraced by others as one blogger  references a lot of my talking points in explaining why he turned ESPN down. I've also heard of many other sites giving them a no, so it's no real surprise that Rob Neyer, who runs the MLB network, is having a tough time finding quality bloggers (maybe its because they're already alligned with network partners that provide real value).

"As you've noticed, Billy, we don't yet have all the teams covered. I'll be completely honest with you ... I thought we'd have 25 teams covered by now, and probably all 30 by the All-Star break.

Instead we've got 21, with (at this moment) no real prospects for more. I do think we'll make some progress this season. I just don't know when, or how much. "

Rob's post actually didn't go over too well as seemed it to dismiss the possibility of new bloggers being able to fill the void of unsuccessful recruiting efforts

"The sad truth is that even if you've got the time to write about your favorite team every day, you probably don't have the analytical skills or the writing chops we're looking for. You might, someday."

Not the most glowing endorsement to get in the blogging game eh? The above quote and the tweet below definitely don't have the feel of a guy who really embraces blogging as a new form of media (besides his own blogging of course)

Enough picking on Rob on getting back on point as to why these networks are flawed regardless of what out of touch ESPN suit runs them.

I've meant to write this post for the last week or so, but the timing seems right given that  Bucknuts.com (where I write on the side), the first ever ESPN affiliate, is now  considering leaving ESPN. Below is a snippet in a recent article and its just a morsel of the full story behind the scenes which I can't share in this post.

But we never fully realized our ambitions to have more timely and more considered recruiting information, and we took a ton of grief for just affiliating with the “four letter word”.

Now, I ask you: should we stay or should we go? Is it worth the “brand” without the cattle? Is ESPN more a hindrance or a help?

The chatter in the comments and in the forums is very critical of ESPN with negative opinions about ESPN's partnership with Bucknuts outnumbering positive ones by about a 6:1 ratio.

Well the owner of Bucknuts knows my feelings about this and my prior blog on this topic is probably a better suited to make the case against ESPN, but I'd like to submit some new evidence that I think is further proof of a senseless, dumbfounding, and somewhat incompetent digital network strategy.

Below I present exhibits A, B, and C into evidence. Please note the ESPN advertising on all three and the site you are seeing the advertising on. Although they are promoting ESPN on ABC, these ads refreshed every couple of days to promote games on ESPN as well and I know for a fact it was ESPN's ad campaign.

Yes, ESPN bought ads on Benkoo.com and you know what? It was a smart move. The above 3 screenshots show ESPN buying ads across three different advertising companies and three different publishers. Someone even just emailed me that Fanhouse also received some ad dollars from ESPN as well.

Given that the NBA playoff schedule can be painfully erratic (multiple days between games) in addition to games being televised on three different networks (TNT, ESPN, ABC), the ESPN ad campaign certainly made sense. In fact it worked on me several times when I came to the realization that a big game was coming up that I was unaware of.

ESPN targeted quite possibly tens of millions of sports fans spanning 3 different sports specific ad networks and the campaign (which refreshed creative for every game of the semi finals and finals) most likely was spread across thousands of publishers. Seeing some of the accounting for these campaigns, I can tell you that they paid well and the ad buy was pretty significant. In fact ESPN also had a very large campaign a couple months before promoting ESPN3 which targeted many of the same networks and publishers.

Between those two ad buys, you're looking at a handful of ad companies and thousands of sports websites dividing up what was likely a 100k-200k ad buy by ESPN....maybe more.

But what about the 60-80 official ESPN affiliates? With ESPN finally making the move to advertising its events and products externally off of its own properties and channels, sadly ESPN neglected their own affiliates here.

All of the sites you've seen with ESPN advertising above, all have advertising deals that outsource the selling of ads on their site to others. All of these outsourced ad companies require very basic documents that allow your traffic numbers to be part of their umbrella network numbers that ad agencies look at to help guide ad buying decisions. These documents are standard practice and nobody really requires them unless they are selling your ads.

But that's not the case with ESPN. They require you to leave any existing premuim advertising agreement you already have or give up the right to enter one in the future.  ESPN simply aggregates all their affiliate's traffic numbers and rolls them up to their total number and that's what ad agencies look at. The end result is a number inflated by blogger's hard work. The higher number helps attract ad buys..... buys that go on espn.com and not to any of the bloggers sites.  ESPN refuses to offer any substantive advertising package for any affiliate sites. I have heard they offered to try to sell ads on some larger sites, but it was more of a ploy to get certain sites signed up.

In a nutshell, you're helping ESPN sell their own ads, you're not allowed to sells yours , and when ESPN themselves feels like throwing some bucks around, they're not going to figure out a way for you get any of those dollars.

Their defense for requiring advertising network documents is that it will help them track the growth of the network as whole. If that were true, they'd use Google Analytics, Site Meter, Quantcast, and not unreliable panel tracking systems that are only relevant to ad agencies.

The truth is that Yahoo Sports  leaped over ESPN in terms of total audience size online in 2007 when they purchased the Rivals network and it probably took suits at ESPN awhile before they realized that it was effecting their ad sales. Hmmm.... if Yahoo leveraged a publisher network to get the upper hand, then why not do the same except not by means of an acquisition or any real substantive partnership? Why not just offer a partnership based 100% on pimping ESPN's brand and not based on technology, platform, advertising, content promotion, and hosting?

I think some of this was just arrogance. ESPN must have laughed off Yahoo Sports at first and could you blame them? An upstart internet company on the West Coast, whose main business was search advertising.. Yahoo couldn't be a threat right? But Yahoo's best in class fantasy sports offerings, growing stable of traditional sports writers, the acquisition of Rivals, prowless at SEO, and Jamie Mottram's growing sports blog empire served as a fatal recipe that saw ESPN not only passed by Yahoo but also having that lead grow for years. Yahoo also just acquired Citizen Sports for a reported 50-60 million dollars, so it looks like Yahoo has already beat them to the next frontier on Facebook and mobile phones. Maybe ESPN shouldn't have adopted a strategy of trying to figure out how to optimize playing auto play videos bracketed with ads on seemingly every page and rather looked to the greater web for some ways to reclaim their top standing.

This leads us to today where Rob Neyer can't fill out his network, the college football network is on the verge of imploding per multiple sources, network sites can't monetize effectively nor gain access to ESPN's own ad spend, and then there is this kicker below.

Most network sites don't or potentially are not allowed to run any ads (or at least premuim ads) as you can see above. But what you do see is ESPN's video player which is required on many network sites playing a Jim Beam commercial. News flash: Pre roll 15-30 second video commercials pays A LOT better than typical banner ads. Although its not obvious to the trained eye, ESPN is actually running lucrative advertising programs camouflaged as additional content for network sites and I am sure you can guess by now who is pocketing this ad money.

I don't really enjoy the role of calling attention to some of these details, but its painfully glaring to me just how ill conceived ESPN's foray into external networks has been. I'd also like to point out that around the new year, long before I ever voiced my displeasure here, I did multiple calls and exchanged dozens of emails with the folks at ESPN on this very topic to little avail.

While you could maybe consider my opinion to be that of bitter competitor to ESPN, I think you'd also have to take into consideration that I've written at large about the online sports space and generally write very positive pieces that span companies like Yardbarker, FSV, FanSided, Fox Sports, Watercooler Sports, Bleacher Report, and SB Nation.

In the end, ESPN's motives are pretty clearly murky at best and bloggers are suffering the price and getting a raw deal.  You don't have to take my word for it as below is part of email I received from an ESPN affiliate who came to the realization that ESPN's network provided no value and was actually costing him money.

"I've been clamping my tongue at how much of a joke their SweetSpot network is. They just want to be able to say they have a network and get the traffic credit from the already built in traffic. They don't try to send traffic our ways, they don't pay -- even on a rev split basis --, they don't host (so I actually lost money making the move)... it just doesn't make sense."

I think the most obvious remedy to all of this is either paying bloggers flat fees if ESPN didn't want to roll up the sleeves to figure out how to run ads on network sites. The other option is running ads on network affiliates and when a advertiser (say Nike, EA, or Gatorade) didn't have an ad to display, ESPN could fill the unsold inventory with house ads promoting their shows, upcoming games, etc.

The network model described above has actually been adopted by Canada's The Score Network and has been quite successful attracting bloggers to sign up, building awareness for The Score's programming, and also attracting advertisers who are excited about available blog inventory. At this point this is an obvious move, but I think the poor saps at ESPN in charge of these type of efforts would probably look a little passe in offering up these ideas in 2010 when they should have been explored around 2006 or at very least when Yahoo got the jump on ESPN in 2007.

Time will tell if sense and innovative thinking will prevail over arrogance and stubbornness, but given the track record and the having personal knowledge of some of the individuals over at ESPN, I think we'll continue to see more of the same. To quote one industry person "ESPN doesn't think its a good idea, unless they came up with it."