01 September 2011
This may end up being one of the last Koo Runnings but certainly a lot going on right now to warrant a new edition highlighting everything going on within the sports 2.0 industry.
Obviously Bleacher Report had a couple of huge announcements last week but before we go there, let's open with some smaller items.
- Couple of interesting departures in the last couple of weeks.
Alana Nguyen will be leaving Fox/Yardbarker for a new position. She hasn't announced her new destination, so I won't spoil it for her. It's local, media, but outside of sports. Sounds like a great opportunity and ever since the news broke she's been tweeting about a new king size bed and Ipad2 so it sounds as if Alana his hit pay-dirt.
All kidding aside, Alana was intricate to Yardbarker as well as Fox and left on great terms. She was an advisor to BallHype in addition to stints at Yahoo Sports and and FanHouse so she certainly brings a lot to the table with a diverse experience across those media companies in addition to a law degree and an expansive role at YB/Fox. Congrats to Alana on the new gig.
James (mostly known as Jim) DeLorenzo has left Octagon Digital/Twackle for a new position as VP, CBS Local Media Strategic Initiatives at CBS. Jim is a great guy who really was intricate to Octagon's traction breaking into various fields on the digital front. Octagon helped with sponsorship sales for Bloguin as well as SB Nation, developed Twackle, as well as a new dashboard that helped sites track what stories were going viral on Twitter which I am hearing is beginning to get some good adoption at media companies. Best of luck to Jim on his new challenge.
- ESPN's Grantland seems to be off to a good start despite a bevy of folks who feel it's a bit over-hyped. Regardless of the criticism, the site is killing and now to my knowledge becomes the first sports blog (maybe first blog ever?) to have their own national television campaign. It's smart, memorable, and to the point but at the same time I feel like it only serves Grantland's existing audience. It's not really that well explained to the tens of millions of viewers who don't know what the site is or anything about Bill Simmons. Here is another commercial that popped up on youtube although I haven't yet seen it on tv.
- SB Nation released an Iphone app last week and to nobodies surprise, it's getting rave reviews. For awhile SBN has not been active on the app front while other companies have really attacked the segment. I'd say that a lot of the sports content apps out there are really having minimal traction so SBN's move to load up and go big seems to have been the smart long view. Below is a demo. Congrats to Trei and the team..........you know deep down inside your hippi open source Linux loving old self want you want to open source or even white label the platform and app. I would fully support that ;)
- As reported last week, Sportsnewser will cease operations as a standalone site. I thought those guys did a hell of a job covering a lot of ground in the sports media biz. In fact they probably had 2-3x the content of Awful Announcing and would usually be first or at least early to the punch on a lot of interesting news. In the end, I think the site never really grew a community as the Media Bistro property was very straight forward in it's reporting and often was light on commentary about all the happenings in the sports media world. There is no real explanation for why the site is being folded into existing properties, but I'd imagine they sensed a crowded field of existing competitors within a limited niche. Definitely will miss venturing over there every now and again. Best of luck to the staff who did a great job in the site's one year history.
- ESPN rolled out their first two recruiting sites this week with We Are SC and Sooner Nation. I seem to be in the minority that things ESPN is ill advised to move into the crowded recruiting field where Rivals, Scout, 24/7, and blogs seem to have a pretty entrenched position in the market. ESPN already tried this in 2007 with a big group of Scout defections (after a class action lawsuit) and almost all of those well established sites have since parted ways with ESPN for greener pastures.
At first glance the front page and article pages are the same platform as espn.com. However the majority of activity on these sites occur in the forums and the word is that existing members HATE the forum software ESPN has migrated We Are SC onto. In fact if you access the pay message boards (which don't seem to have a working paywall), the majority of reactions go like this as it seems a massive migration of posters have decided to move on:
"Lots of the cool features of the old board are gone (avatars, emoticons, quotes, thread bump, etc.) A lot of the best posters are nowhere to be seen either and there are times where the site seems like a ghost town. However, I'm hopeful that if some of the changes do occur, as Garry has promised, the site will begin to pick up steam and a lot of the traffic will return."
"I sorta feel like I'm in a dark room with a blindfold on. Still trying to find my way around, I guess. And while I'm hoping things will get sorted out and improvements will be made, it seems that there's been a real drop-off in activity here. Until this site gets up to speed (hopefully), what are some other site options for SC football news?"
"I have been on the Wearesc for many years and this site is not acceptable. ESPN or not I have enjoyed accessing this site for its quality input and discussions related to USC. Honestly I am bummed about the blue font, looks old and cheesy. The time to access messages is horrible. The front page is good but the other pages lack appeal. I know Gary had his reasons to change but I'm not enjoying the navigation and appearance. Sometimes old is good."
A couple of well known bloggers thought these sites were going to be "game-changers". Not looking like it.
- Now we'll close with Bleacher Report and their week for the ages.
The company started last week by announcing that they had hired a prestigious batch of bloggers to head a new lead writer program. They would later announce that they had raised $22 million in additional funding which contrary to popular belief, did not send Sara Lacy into labor.
The elephant in the room is that the 1-2 punch cognizant of a Guile's sonic boom followed by a flash-kick has the B/R team eating up their recent ascension and validation in the sports media world while other media folks and detractors are somewhere between shock and denial.
The first move was just flat out shrewd. For years B/R's strategy of frequency, high output, SEO, platform development, and traffic acquisition largely ignored content quality issues that stemmed from no compensation model and having an open platform.
About a year ago under their then new CEO, the content quality issues began to become a focus for the company. An application process was put in place, contributors were removed, and King Kauffman was hired to see what he could do to raise the bar. Nobody to my knowledge thoroughly audits all of B/R's content or competing companies like Yardbarker, Fansided, Big Lead Sports, SBN, and Bloguin so it's hard to say over time just how much progress had been made to date.
Did the bad content get better and less prominent? Probably. Did the middle of the road stuff improve? I would assume so. Did the good stuff get better and more prominent? Most likely.
But who knows. With 700 articles or so a day, there was still loads of stuff to poke fun at. It wasn't just snarky bloggers, media folks, and people on Twitter. The reputation was beginning to resonate with the mainstream. Often I'd see forums and blogs linking to B/R content so they could mock the content. Maybe the writing was improving (style, structure, spelling, and grammar) but the actual opinions and commentary was still second or third tier.
However B/R started paying folks and have quietly been adding a lot of good external folks to the mix while also continuing to improve their editing, curating, and promotional systems to better feature their high quality content.
With two lockouts this summer and the expected seasonal dip of sports traffic there was some chatter that B/R had maybe reached a ceiling in terms of size and cultural influence (in fairness I think all sports properties experienced a stagnant summer due to the lockouts)
With a couple dozen or so smaller more subtle hires (economical free lancers) to round out specific team coverage, B/R went big and brought in known entities Dan Levy, Bethelehem Shoals, Dan Rubenstien, and Josh Zerkle to lead their national efforts.
I actually caught wind ahead of the announcement was a bit in shock. Mainly because Levy had been pretty vocal about his criticism about Bleacher Report. A lot of his readers were a bit taken aback by the news that he had "crossed over", but let's be fair here.
Dan many times hinted he thought they could benefit from a national type program of elite wrters (which he called Bleacher Report pro) and often joked he would be interested in heading that effort. Dan was also clear that he needed to write/podcast for a living and he wasn't happy anymore doing it for free.
I do believe that the B/R folks dazzled Dan and the rest of the guys as the founders, the ringer CEO, and the office are all extremely impressive, but I think you can't argue that money talked here. What I tweeted the day the news broke was "New media runs on sweat equity, freelancers, half pay, part timers, etc. Can't fault the "B/R Fab 5" for leaving that world for a full time gigs which are extremely rare."
I also think that there is a level of prestige of being the guys to head something new, high profile, and meant to better a company and that also factored in.
Others weren't as impressed, calling the move "merely window dressing".
My thing is that I don't really know what I'm getting when I click on a B/R article so for the most part I get my fix elsewhere for teams I follow. For some fanbases, I'm sure B/R's coverage trumps other media companies and startups but for me Athletics Nation, Bucknuts, and 11 warriors work for me.
But these branded national blogs are different. Their segmented and validated by people I already read and respect. They're dependable and I can get down with that. I personally look forward to the return of Dan Levy's podcast.
I am kind of interested to see how much traction the sites get in addition to the tenure's of the guys brought in. Most of these guys are full time while some are "seriously part-time" which could signal to me that a guy like Shoals is just using this as a bridge until other ventures he's working on with like "The Classical" become more substantive. Also Zerkle is a crazy man and you're never safe with him as an employee if you actually have a real HR department ;)
I think we all knew this day was coming in terms of B/R looking to make a push credibility wise via the addition of known bloggers and former detractors. I often read of sports bloggers tweeting that they were in SF and wondered if it was maybe a BR recruitment trip.
The move also doubles as a nice PR move as these guys have a lot of goodwill within the space. Many who knocked B/R in the past may look to bite their tongue going forward as some of their digital friends are now lending a hand.
As a side note B/R follows the likes of NBC, CBS, and Bloguin as entities who have to a certain degree are imitating the blog strategy that Jamie Mottram rolled at Yahoo several years ago. No issue there, just giving Mottram props for conceptualizing the blog model that is now being adopted across the space.
In regards to the funding....holy shit. $22 million is more than all of their previous rounds combined. There was a time when I thought 10.5 million would be enough for B/R and SBN to "land the plane" above $100 million valuations in terms of exits.
But both companies seem to have had a light bulb go off late spring/early summer where they said eff it, let's go real big. My personal thought was that with Huffington Post selling for $315 million, digial media companies would be smart to start looking to for good landing places when they got near or over a nine figure valuation. Continued growth at that scale is not always easy to do.
However, HuffPo's acquisition price looks like it was actually a very cheap buy for AOL. If AOL indeed does sell to a private equity firm and gets chopped up, I could see HuffPo selling for 2-3x that price meaning that the AOL acquisition price is not really an accurate benchmark anymore.
With over 60 employees and the emergence of an editorial budget, I would imagine that despite what look to be very good ad sales programs, the company was going to need money at some point in 2012. You're left wondering just what the valuation was and I'll certainly dig around given my curiousity.
Oak Investment Capital led the round and while some are really fond of the VC firm, others have pointed out their track record of late is questionable. That article pokes fun a bit at their investment in HuffPo at a $100 million valuation but that late stage investment worked out and they likely see similar potential with B/R.
Per the TC article the capital will go towards three main areas.
"It recently built a video studio and has been getting more serious about mobile apps. In addition, the company is going to look into expanding into new verticals beyond sports, new products like games or potentially getting more serious about international markets."
B/R has been working on the groundwork of their video operations for awhile but really haven't pushed down on the accelerator yet. Lot of folks are having traction there like Cinesport so good to attack there now before the field gets crowded. Mobile apps makes sense but we'll have to see what shakes out. Games? Could be interesting. Lots of folks have tried and failed but B/R has a huge built in community. International markets is an expensive investment and I would think they might dip their toes in the water if anything.
I think the bulk of the growth strategy will come into new vertical outside of sports. B/R's new board member also invested in Demand Media and Federated Media which may be signal of what to expect. Can Bleacher Report go from Sports to augmenting other areas like Entertainment, Business, Cars, Humor, Night Life, etc.
If I had to bet I'd say B/R goes big with an Entertainment site (I actually mocked this idea in an earlier post but that was before $22 million was in their bank account). If they get good traction you might see 2-3 other verticals pop up.
Other things that stand out was the coverage surrounding the funding that centered around "Billion Dollars". Some took the quote that they could potentially become a billion dollar company and subsequent sensationalized headlines as a statement of fact that the company is at or near that valuation. Given their last valuation was at around $80 million, I think it's probable they took this round somewhere between $125 million- $175 million which is still insane.While an IPO is possible for the company, I'd think a billion dollar valuation or exit is probably highly unlikely. You never know though
With what was likely a nine figure valuation, it was suprising to hear that none of the founders were taking money off the table. Knowing those guys and the fact they're young and first time entrepreneurs, I thought that those guys might have wanted to cash out a small piece of their soon to be fortune and be roll like gangsters to their 10 year high school reunion. I guess luxury can wait a bit.
Going forward it will be interesting to see how the money is spent and how the large influx of capital alters their current strategy. Also it will be intersting to see how other media companies react. Will SBN feel a bit more compelled to do something equally as big as these two companies seemed to be dueling in terms of their last valuation, amount raised, and neigbor each other in terms of Comscore ranking.
Given B/R and SBN are still gaining steam how will traditional media react? A lot of the writers recently hired by B/R are actually former employees of FanHouse and Sporting News. It's interesting to see those much larger media companies continuing to struggle with their content strategies sports while startups continue to pickup the broken pieces.
That's it for now. Your thoughts?
Hopefully I'll be back sooner than later with some follow up news surrounding the pending retirement of Koo Runnings.
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