Just in time for the Super Bowl, retired sports celebrities John Elway, Wayne Gretzky and Michael Jordan are launching an e-commerce venture that will offer sporting goods, as well as other fitness, health and financial products and services.
The venture, dubbed MVP.com, is backed by blue-chip venture firm Benchmark Capital and by CBS, the company said. John Costello, former Sears & Roebuck executive, will be CEO of the company.
MVP.com is the brainchild of Boca Raton, Fla.-based JW Genesis, a full-service brokerage firm. JW Genesis and Elway were initial investors this fall; since then, MVP.com has landed Benchmark, Freeman Spogli & Co., and sporting-goods retailer Galyan's Trading Company. To date, MVP has raised $65 million.
MVP.com hits the gate with an enviable deal with SportsLine, the largest sporting-goods vendor on the Web and the second-largest sports site, with more than 4.5 million unique monthly visitors. MVP.com will handle SportsLine's e-commerce business in exchange for payments equaling $120 million, over a ten-year period. In addition, SportsLine will get a cut of revenue once MVP.com's business exceeds an undisclosed threshold, says SportsLine CEO Mike Levy. In a separate deal, MVP.com gets airtime worth $85 million from CBS, SportsLine's broadcast partner. Both CBS and SportsLine have taken equity positions in MVP.com. MVP.com will be based in Chicago.
The $150 billion retail sporting-goods sector has exploded in the past six months. In September, Redwood City, Calif.-based Fogdog.com landed an equity stake from Nike in exchange for a steady stream of product to sell on its site. In November, Global Sports Interactive made its debut as an e-commerce facilitator for six top sporting-goods chains, including The Sports Authority and The Athlete's Foot.
Levy believes that the promotional clout of CBS and the traffic-generating capabilities of SportsLine will put MVP.com a step ahead of the competition. "I think MVP will be the clear winner ... if they execute," says Levy. "And with our help, how can they fail?"
SportsLine is on pace to bring in $16 million in revenue from its e-commerce business this year. But Levy decided a better move would be to sell off its e-commerce operation, so MVP.com has purchased Igogolf, golfclubtrader.com and tennisdirect.com. Levy decided to sell those ventures "because we would rather get to a positive cash flow first," he says. He's set mid-2001 for the date of profitability.
Levy said he got involved in MVP.com after hearing from CBS CFO Fred Reynolds last month. Reynolds told Levy that CBS was interested in investing in the new firm, and suggested that SportsLine should consider getting involved too, Levy said.