Wednesday, June 02, 2010

On The Big Lead's Big Payday

There are a few reasons I was sincerely excited about -- and for -- Jason McIntyre selling The Big Lead to Fantasy Sports Ventures.

*Rising tide. Deals involving start-up sports media companies or properties are really really good for everyone in start-up sports media. (I'm going to get back to that.) I'm not going to say that this deal is a bellweather for indie sports blogs or sports bloggers -- it more closely resembles an anomaly (see below). But any deal flow is good deal flow.

*Money is good. "Low seven figures" -- presumably a million bucks -- for his huge effort over the years is a hell of a payoff. I felt the same way about Henry Abbott's "acq-hire" with ESPN; about PFT's deal with NBC; about KSK's deal with Uproxx; about EDSBS's deal with SB Nation; and -- apples and oranges -- about any sports blogger who works for free (or for cheap) who gets a better financial deal by earning a content contract with a larger site or media company, whether we're talking about Will Leitch or the Basketball Jones guys or Shoals or any number of other folks.

*Valuation comp. It is hard to know what went into the "low-seven-figure" price. FSV already had an ad-sales deal with TBL. Only FSV knows how that traffic was monetizing, but as TBL was one of FSV's most prominent repped properties (and FSV had built itself into a Top 10 online sports property), obviously they (and, most likely, FSV major shareholder Gannett) felt like outright owning the traffic and intellectual property was in their best interests.

To my point above, I doubt this signals some kind of acquisition spree of indie sports sites by larger media companies, and it is unclear what TBL would have commanded from a more mainstream media company. (I would be surprised if there was any, although I'm sure there were at least a few that would have wanted to do a traffic-assignment ad-sales deal.)

Skip that "3 million page views a month" metric from the NYT article; that's a metric that mattered 5 years ago. Stick with monthly unique visitors. Both Quantcast and Compete peg TBL at around 250,000 uniques per month (impressively, up 5X from a year ago). That makes TBL likely the largest (and already among the most veteran) "indie" sports blogs -- it is entirely rare to find a sports blog or site unaffiliated with a mainstream media company that has anywhere close to 250,000. (And just to be clear, I count Gawker and Uproxx and SB Nation and Yardbarker and Octagon as "mainstream." The only indie I can think of with that kind of traffic is SportsByBrooks, which Quantcast has at roughly 600,000 uniques per month, but I'll update if any others come over the transom.) So was this anomalous? Probably.

Let's set that aside: Again, any deal flow is good.

*Mostly, what TBL did is really hard. Here is what I respect most about TBL -- and this goes for any other would-be media entrepreneur: Way too many folks in media were born on third base and think they hit a triple. It is hard -- really really hard -- to create something from scratch, then build it up to the point where you have enough visitors to get enough-to-get-by ad sales, let alone create a couple million bucks in an acquisition.

The NYT piece didn't mention the polarizing place TBL has in the media landscape -- highly regarded by mainstream sports media folks (mainly for dishing and breaking sports media gossip) yet largely derided by other sports bloggers. (From the initial reaction to the sale on Twitter, TBL has earned nothing if not wide respect for the outcome.) It's not like I haven't staked out some ground -- petty and regrettable, by the way -- in that debate.

But here is how I have come to see it: If you are satisfying your community, growing your audience and ultimately making money doing it, it doesn't matter what other people have to say about it; you are doing your job well. As the producer, if you can enjoy doing it, all the better. TBL maintained a laser focus, seemed to like what he was doing and earned a sizable financial reward for the combination. That is a success story.

At this stage of my career -- and, looking backward, at the most satisfying points of my career -- I am personally much more focused right now on building something meaningful from scratch -- something that an audience values and that I love doing and that changes the game and that I can hopefully find financial reward in. When it works out, great. If it doesn't, I will hopefully have learned something and enjoyed myself and not burned too much of a financial investment.

And so when I think about TBL's payday, what I come back to at a fundamental level is entrepreneurial admiration, not just for the exit but for the process to get there.

-- D.S.

4 comments:

NYsportsGUY said...

Great article.

in terms of valuation - revenue is typically the key anchor in determining that.

3mm page views a month x 3 ad slots = 9mm impressions

9mm impressions /1000 (cpm) = 9,000

9,000 x $2.00 CPM (very aggressive) = $18,000 a month in ad revenue AT MOST

oh yeah, and split that with your ad sales team (50-50 if your lucky) = $9,000 a month in site revenue from advertising

I don't know what FSV they was thinking when buying. The value of the property has to be way, way beyond what its earnings are now. Obviously, not every site purchase has to be driven by only revenue but They must have plans to do something else out of the box in order to justify their purchase in the long term.

Kenny said...

"I am personally much more focused right now on building something meaningful from scratch"

Is that in reference to this blog/TimTeblog? Do you have any other projects cooking? What's on the horizon for Dan Shanoff?

Matt said...

So, just to get this straight. You are happy that once again someone who puts out an inferior product is going to be unfairly rewarded?

This is the same guy who claimed that bloggers needed to "clean up their act", and then continued to post cock pictures. This is a guy you railed on after Buzz's blowup on Leitch.

From what I've seen of that site, people don't go there for the dribble that Jason writes. They go there for the community, because Deadspin turned into a wasteland. That community routinely bashes Jason for his complete lack of knowledge of sports.

Good for the guy for making a buck, but this isn't something that should be celebrated by other bloggers. All it does is promote the idea that you need to link to gossip, pay for pictures of athlete dick, and occasionally post something about sports. Do that enough times, and you'll get a payday. Personally, I think we should be pushing for people like Brian Cook at Mgoblog.com to get a deal like this. There is a guy who has set the standard for what a sports blog can be.

College Wolf said...

Whattup DS? Yourself and the "World's Greatest Chinese Jew" aka Ben Koo are clearly by far the two best people to read when something pops off in Sports/Tech Web 2.0. Most other people aren't even close. So, I just wanted to say props on that.

Also, Koo had them at around 500,000 uv's and $2 million bucks. Any thoughts on that? Here's where he had it:

http://benkoo.com/articles/biz-and-tech/fsv-acquires-the-big-lead-2010-the-year-of-the-blog-exits.html