Global Sports & The Sports Authority Form E-Commerce Joint Venture
GLOBAL SPORTS, INC. (NASDAQ: GSPT) today announced that its wholly-owned Global Sports Interactive subsidiary has formed a joint venture with The Sports Authority, Inc. (NYSE:TSA), the largest full-line sporting goods retailer in the world, that will exclusively own and operate the entire e-Commerce business of The Sports Authority. The joint venture, known as TheSportsAuthority.com, will initially be owned 80.1% by Global Sports Interactive and 19.9% by The Sports Authority, although, The Sports Authority has certain options to increase its ownership position in the joint venture to 49.9% over time. Results for TheSportsAuthority.com will be included in the consolidated statements of Global Sports, Inc.
The Sports Authority.com will fully leverage the technology and organizational infrastructure of Global Sports Interactive to launch a best-of-breed e-Commerce Web site for the fourth quarter of 1999. The Sports Authority will exploit the power of its $1.6 billion land based business to drive traffic to its Web site, including completely integrating TheSportsAuthority.com Web site address into all of its marketing and communications materials. This exposure, consisting of all television, radio, print and outdoor advertising, cash register receipts, shopping bags and in-store displays, is expected to generate substantial consumer awareness for TheSportsAuthority.com. In addition, The Sports Authority.com will commit incremental resources to specifically market The Sports Authority’s e-Commerce business.
Commenting on the joint venture, Global Sports’ Chairman and CEO Michael Rubin, said, “The formation of TheSportsAuthority.com represents an important milestone in the brief history of Global Sports Interactive. With this joint venture and the five previously announced Global Sports Interactive partners, our world class technology and organizational platform will now operate the entire e-Commerce businesses of six of the 20 largest sporting good and athletic specialty retailers in the United States. The Sports Authority’s $1.6 billion in 1998 sales doubles the amount of land based revenues supporting the GSI model to $3.2 billion and significantly strengthens GSI’s position toward achieving its goal of becoming the leading e-Commerce company in the $70 billion sporting goods industry. With the signing of our joint venture with The Sports Authority we have completed our initial group of retail partners. While we anticipate that we will continue to add new retail partners over time, we will only launch Web sites for the fourth quarter of 1999 for our first six partners.”
Marty Hanaka, CEO of The Sports Authority, noted, “We are excited to have formed a joint venture partnership with Global Sports Interactive. TheSportsAuthority.com will leverage GSI’s technology and organizational platform to build a world class e-Commerce shopping experience for the 50 million consumers that walk through our doors each year and countless others that we will be able to reach through this new medium. The creation of this standalone entity positions The Sports Authority to take full advantage of the explosive growth of e-Commerce. With the largest and most powerful full-line sporting goods brand in the world, The Sports Authority clearly had numerous possibilities of how to enter e-Commerce. We believe that this partnership creates the best opportunity for The Sports Authority based on GSI’s significant scale, focus and tremendous entrepreneurial energy.”
Global Sports Interactive (http://www.GS-Interactive.com) is an e-commerce company that operates the Internet businesses of multiple sporting goods retailers, including The Athletes Foot, Sport Chalet, MC Sports, Sports & Recreation and one unnamed retailer with more than $200 million in annual sales. In addition, through a joint venture agreement, Global Sports Interactive also operates the Internet business of The Sports Authority, the largest full-line sporting goods retailer in the world. Global Sports Interactive is a wholly owned subsidiary of Global Sports, Inc.
The Sports Authority, Inc. directly operates 200 full-line sporting goods superstores: 195 stores in 32 states across the United States and five in Canada. Mega Sports Co, Inc. operates another 13 stores in Japan under a license agreement with The Sports Authority.
Statements about the Company’s outlook and all other statements in this release other than historical facts are forward-looking statements. Since these statements involve risks and uncertainties, they are subject to change at any time and the Company’s actual results may differ materially from expected results. The Company derives most of its forward-looking statements from its operating budgets and forecasts, which are based upon many detailed assumptions. While the Company believes that its assumptions are reasonable, there are inherent difficulties in predicting certain important factors, especially the timing and magnitude of sales and the overall condition of the footwear industry. These factors, as and when applicable, are discussed in the Company’s filings with the SEC, a copy of which may be obtained from the Company without charge.
Contact:
Michael R. Conn
Senior Vice President Strategic Development
(610) 768-0900
Connm@Globalsportsinc.com
