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Summary:

You’re reading it here first: Yahoo is close to making its biggest sports acquisition after, well, the Broadcast.com deal: the college sport…

imageYou’re reading it here first: Yahoo is close to making its biggest sports acquisition after, well, the Broadcast.com deal: the college sports network Rivals.com, paidContent.org has learned. The price could reach around $100 million, which some we’ve spoken to say is overpriced, and that’s why the traditional sports media buyers are sitting out on this one. One exec involved in online sports acquisitions told us $50-75 million would be more realistic given a model that can — and has been — replicated and described the reaction to what Rivals was asking — $100 million — as “sticker shock.”
For comparison, FIM paid $60 million for Scout Media in September 2005.
The new acquisition would be a boost to Yahoo Sports, which has been looking for ways to catch up to the juggernaut of ESPN.com and the surge from FoxSports.com. It has an already-existing deal with Rivals.com for sharing sports content; Rivals also supplies content to USAToday.com, AOL Sports, SportingNews.com, MSNBC.com and SI.com.
Rivals.com, based in Brentwood, TN, was founded in 2001, from the ashes of then-Seattle-based Rival Networks. The Internet start-up burned through more than $75 million dollars in venture capital funding during the dotcom bust, and the assets were available through a forced liquidation. Interestingly, it was rumored then that Yahoo was looking at buying the assets of the company. A history of Rivals.com since then is here. CEO Shannon Terry made the list of SBJ’s Top 20 in Online Sports earlier this year.
Related:
— <a href="http://www.paidcontent.org/entry/scout-medias-sale-to-fox-interactive-60-million-tag/&quot; title="Scout Media

By Rafat Ali

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  1. Nice scoop. All the sudden I am getting the feeling that we are going to see quite a round of content consolidation. Now that the big media players are worried about the strategic implications more then the bottom line, a lot of properties could change hands.

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  2. Agree with Zach, especially when it comes to companies who lived through the bust first time around… though is it really a success when a co. raises $75M and exists for $100M?

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  3. Scott Rogers Friday, April 13, 2007

    Great Article…. and early, too.

    Based on what's been going on lately… Scout for >10x revenue, and CBS dropping a reported 60x revenue on MaxPreps, something bears further investigation.

    It's not college sports… that's been duplicated more than once.

    It's High School Sports… and unfortunately for Yahoo, Rivals ain't got it.

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  4. That is a huge price tag and certainly does show that everyone is trying to 'catch up' with ESPN.com but how can they really? What media company does a better job of intertwining all of its properties, offline and online? Other than CBS with Fantasy and the Tourney, ESPN's powerhouse led by the broadcast brand is the thing that is impossible to catch. When you've got the power of ESPN driving your online product, you can buy all the high school and college sites you want, no one is going to 'catch' ESPN. Possibly ever.

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  5. John Winters Friday, April 13, 2007

    ESPN does squat with fantasy, and Yahoo dominates all other players relative to fantast sports, including CBS, so not sure what your point is there. Obviously ESPN is the dominant brand within sports editorial content online, but this deal seems to make sense for yahoo given the fact that it would face a much more uphill climb for most professional sports leagues given the 9 or 10 figure deals that the network and/or cable operators have with the professional sports leagues. I think this is the right play for Yahoo.

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  6. Scott Rogers Friday, April 13, 2007

    I think it's a good, albeit expensive play for Yahoo. It successfully gets them into college sports.

    They will be arguing over the same traffic that FIM has with Scout, CBS has with CSTV and ESPN has with ESPN U. Nothing original here. No original content. Same demo, same content. Yawn.

    So, what makes it work 100MM. The same stuff you can get with a staff of 5? Not.

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  7. The guys who now run Scout are the ones who went through the $75 mil before bankrupting Rivals the first time. The current owners of Rivals, who sold to Scout at that time, bought Rivals out of bankruptcy for a pittance, and have turned it into an incredibly-successful business model.

    Comparing the two networks is apples-to-oranges; the two do a lot of the same things, but Scout covers pro sports while Rivals has made the decision to stick to college content exclusively. There is no comparison between the quality of the two networks. Rivals is much better in terms of its content and analysis, and is by far the better known of the two.

    Honestly, I thought this day would come, but $100 mil seems cheap because there is a ton of room for growth, and their current customer base is very loyal. In a decade Rivals will be to college sports what ESPN is to the rest of the sports world. There's room for improvement, but they are incredibly business-savvy and extremely good at the core of what they do.

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  8. Tom Williams Friday, April 13, 2007

    Do we allow paid advertisements or shilling on PaidContent.org comment boards? Chris Lee is Rivals' Vanderbilt publisher, so, um, take his comments with about 200-300 gains of salt :-)

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  9. Good luck to all the people at Rivals if this is true.

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