PHOENIX, Arizona, December 24. IN what appears to be financial concerns that could affect a landmark venture between the Wasserman Group (WMG) and three of United States Olympic Committees' national governing bodies (USA Swimming, USA Track and Field, and USA Gymnastics), WMG is shopping its Online Sports Network in lieu of an expected eight-figure loss for 2007.
It was reported in April that WMG signed a marketing and programming agreement with the three NGBs in order to bring the Olympic sites into their network.
Reports from the Sports Business Journal indicate that WMG has met with multiple buyers in an attempt to attract investors or to sell their Sports Network. Sportnet.com is valued at $50 million. The Sportnet business model relies on bundling online advertisers and visitors over Olympic and action sport sites.
However, it was revealed at a November USA Swimming Board of Directors meeting that USA Swimming is the only NGB moving quickly. It is assumed that the other NGBs are taking a wait and see attitude. For the deal to close with USA Swimming and WMG, three agreements need to be signed. After months of negotiations no final contracts have been signed. However, the Sports Business Journal recently reported that WMG is actively pursuing sport sponsors.
The basis for the deal requires WMG to guarantee millions of dollars to USA Swimming over a long-term period. In return WMG wants exclusive broadcast and sponsorship sales rights to USA Swimming and its events. WMG will sell sponsorship packages around these events and assets in order to recoup their investment in USA Swimming.
USA Swimming and WMG would remain independent of each other, but would be co-owners of a new commercial website (SwimNetwork.com) through a 50/50 Limited Liability Corporation partnership. The end result is that for the first time, a not-for-profit NGB would own a for-profit media news outlet.
How USA Swimming moves forward will influence how other NGBs may follow.
Link to the original story from the Sports Business Journal