Basketball stars Shaquille O'Neal and Michael Jordan are jumping into Internet investment, along with golf phenomenon Tiger Woods. But these American athletic icons are doing it Euro-style: They've agreed to invest US$3.5 million in Sports.com, a network of European Web sites based in London.
Sports.com is an independent subsidiary of SportsLine, the U.S.-based site whose reach rivals that of ESPN.com. The European venture has just completed a pre-IPO (initial public offering) fundraising round of $52.5 million, and the final money came from the three superstars.
According to Tom Jessiman, the managing director of Sports.com, O'Neal, Jordan and Woods are savvy businessmen who see European sports as hot Internet investments. The three were initially given some shares in parent company SportsLine, but they wanted to make more serious investments in the European venture.
"They were eager to actually be more active and directly invest this time in Sports.com," says Jessiman. "We think it's a ringing endorsement."
Sports.com's detractors see the move as a ploy for publicity, with the added benefit of putting "dumb money" into the mix.
"It's a very good way to seek funds, because you know that the stars are not going to be as astute as an investment bank," says an industry observer who asked not to be named. "It will no doubt benefit the parent company in the U.S. when it comes to getting access to exclusive content."
Other critics say the American stars are unlikely to impress European investors. Jessiman disagrees, arguing that these three athletes are famous all over the world.
"They played their professional careers in the States, but they are major global brands," Jessiman says. "Shaq and Michael Jordan are huge in Italy and Spain."
Leonard Armato, O'Neal's agent, says that his client has long supported Web investment, and that the relationship with SportsLine has paid off handsomely.
"Shaq has a long-standing relationship with SportsLine.com, the company behind Sports.com," Armato says. "He was the first athlete-celebrity to have a Web presence, and his site has been hosted by SportsLine since well before its IPO.
He predated Jordan and Tiger Woods' relationship with SportsLine. Shaq has been on the forefront of the convergence of sports and technology and his equity-based interest in Sportsline has been rewarding. He views this investment as another sports-technology opportunity backed by SportsLine, a proven winner in the field."
Sports.com is gearing up for an IPO sometime this year, but Jessiman won't specify the stock exchange on which the company will float. He will say, however, that it's likely to be a European exchange, to emphasize the site's commitment to the continent.
"It certainly makes sense, being a European company, that we'd be involved with Europe," Jessiman says.