Strategic Partnership Signed
Two investors led the re-launched startup's funding: Cleveland Pacific, led by Bernie Kosar and his brother Brian, and Doug Moore of Vulcan Publishing, Inc. "Jim is a great entrepreneur." said Bernie Kosar, a former All-Pro NFL quarterback, "Entrepreneurs like Jim are rare and when Jim approached us about being involved, we jumped at the opportunity."
The UGO arrangement unites the affiliate sites of TheInsiders.com and UGO into a single network, although no equity is exchanged. Combining America's most loyal sports fans and UGO's six million male consumers of entertainment, the alliance creates one of the largest male audiences on the Internet. "A similar deal had been reached between us back in May of 2000, but after Heckman was pushed out (at Rivals), the deal fizzled," said UGO Chairman Joe Robinson. "We are greatly impressed at the speed this company was revived. This was the kind of execution we were accustomed to seeing at Rivals."
Sharing a single advertising infrastructure will enhance the efficiency of the two networks, according to Sornsin, TheInsiders.com co-founder. "The launch of our subscription model has exceeded all expectations," Sornsin said, "and the advertising opportunity with UGO complements this new revenue stream."
"Online advertising revenues took a hammering because there were too many suppliers," Heckman said, "but as Internet properties consolidate, the future of sponsorship revenue will be bright for the very few survivors. As the number of ad suppliers dwindles, I expect advertising rates to rise again. One thing is clear to me -- consumer loyalty for quality Internet properties is not slowing down and the smart advertisers will soon learn to exploit that opportunity."
The strategic partnership extends the market reach for UGO's national sales force while offering a unique and compatible traffic reporting system and ad-serving technology to TheInsiders.com network. "I'm incredibly impressed with UGO's technology, leadership and continued success selling sponsorships," Heckman said. "UGO's leadership team has continued to make the right leadership decisions to remain a survivor."
The new alliance brings the Heckman/UGO relationship full circle. UGO and Rivals went in opposite directions shortly after Heckman's departure. UGO raised $25 million and headed in the direction of profitability while Rivals closed their doors in early April.
Rivals' former Senior Vice President, Patrick Crumb, also rejoined his former CEO to again lead corporate development. "In less than two years," Crumb explained, "Heckman invented a business model, closed five rounds of funding for nearly $70 million, launched a 700 site sports network, built strategic alliances with Intel, Yahoo, Fox/Newscorp, Chrysalis Entertainment and Softbank, launched two international networks in London and Japan, and filed an S-1 with Goldman Sachs just prior to the IPO crash.
"But I think what has been done over the last 6 months is even more impressive," continued Crumb, "the engineering team built an entirely new publishing system, we signed and deployed a nationwide network of over 100 affiliates, generated hundreds of thousands in subscription sales, billed significant national sponsorship revenue from UGO, secured over 150 local ad clients, and recently executed a content syndication alliance with CNNSI." All this has been done with a staff of 17, less than 10% of Rivals at its' peak.
About TheInsiders.com: TheInsiders.com is a network of more than 100 college and pro team Web site affiliates operating on a single technical and business infrastructure. Based in Seattle, Wash., the new network was recently launched by Jim Heckman, founder of the former Rivals.com. TheInsiders.com consists of the key former Rivals' executives and founders including the CEO, top dealmaker, top revenue producer, original CTO with the key engineers, and top Web sites from the former Rivals.com network.