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{When a 1 yr old startup company sells for £300 m (1250 * revenues) - you'd
think there was a credible story until you see that Goldmans were initial
shareholders @ 25p and structured the BSKYB offer for Sports Internet at
£8.50 - nice work for a year if you can find it (at 34 times issue)}
THE INDEPENDENT: OUTLOOK: DOT.DOTTY SKY
93% match; The Independent - United Kingdom ; 11-May-2000 12:00:00 am ;
HURRAH! A dot.com that has managed to sell up for real money, or rather,
since shares in BSkyB cannot entirely be regarded as real money, something a
lot closer to it than most internet securities offer. Whether you think Sky
overvalued by the stock market or not, the company is at least a substantial
business, with real, paying customers and good prospects. The same cannot be
said of Sports Internet Group, an internet content start-up which in the six
months to August last year achieved revenues of a heroic pounds 240,000.
Bizarrely, Sky yesterday agreed to pay a stonking pounds 300m in stock for
this football and online betting website. If ever there was a sign of a
company losing its touch, this would seem to be it. Tony Ball, Sky's chief
executive, and presumably Rupert Murdoch too, for he is still chairman, must
share the view that their currency is overvalued, since this amounts to a
cavalier waste of it. Sports Internet Group bills itself as one of
football's leading internet websites. What they do sounds terribly exciting.
Mix football with the brand new medium of the web and. . . .well it's got to
be a great business, hasn't it?
The reality is an information site of questionable quality which in most
respects falls a long way short of what the traditional print offers every
morning. Oh, and each new page takes an age to download. But never mind.
Its the potential Mr Ball is buying, isn't it? That and the "management",
which Sky intends to put to work developing its own Sky.com sports sites.
Which ever way you look at it, this is an awful lot of money for an
established company to be paying for "potential and management". Perhaps the
greatest mystery is why a media company with the leading British brand in
sports rights should have to make such a purchase at all.
Even accepting that Sky has been late in recognising the web's importance,
it surely doesn't need to pay so dearly to catch up. Sky could have done the
same thing internally for a fraction of the cost, and its ability to cross
promote through other media would have wiped the competition from the floor.
Mr Ball says that one of the things that attracted him was Sports Internet
Group's content. Is content at his sister organisations of the Times and the
Sun so poor that he needs to turn to a start-up to find quality copy? No one
can begrudge Peter Wilkinson, SIG's founder, his fortune, but he really is
taking Sky shareholders for a terrible ride. No wonder Elisabeth Murdoch is
off to pastures new. Her dad's company is losing the power of innovation.
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