RealTime IT News

Global Sports Scores With Comcast, QVC

Cable operator Comcast Corp. and its majority-owned shopping network QVC Inc., through a joint venture company, invested $40.8 million and took a 19 percent stake in Global Sports Inc. , a developer and operator of e-commerce sporting goods businesses.

The investors also purchased warrants for an additional stake in Global Sports, which, if exercised fully, would lead to an investment totaling $82.1 million.

And, Global Sports was selected to develop and operate a new sporting goods store on iQVC.

The joint venture company will acquire 5 million common shares of Global Sports stock at $8.15 per share in cash. In addition, the Comcast and QVC venture has agreed to purchase, for $562,000 in cash, warrants to purchase an additional 4.5 million shares of Global Sports common stock, at prices ranging from $8.15 to $10 per share.

Global Sports was trading at $8.50 at mid-day, essentially unchanged. Comcast was up $1.43 at $37.31.

Assuming full exercise of all the warrants by the Comcast and QVC venture, the aggregate investment in Global Sports would be $82.1 million representing a total ownership of approximately 26 percent.

The Global Sports deal for a sporting goods store on iQVC, the e-commerce division of QVC, will be the company's seventh new alliance this year and 13th since its inception.

The new iQVC sports store is expected to launch in time for the upcoming holiday season and will include merchandise from approximately 1,000 leading sporting goods brands, Global Sports said.

"Our impending relationship with Global Sports is a synergistic home run," said Doug Briggs, president of QVC. "QVC's 14-year track record in electronic commerce combined with Global Sports' presence in the sports merchandising category makes a real winning team."

"The strategic significance of these transactions is enormous and clearly takes our company to the next level," said Michael G. Rubin, chairman and CEO of Global Sports. He added that with the investment funding and the expertise of the new stakeholders, "we believe that we have more than enough cash to reach profitability."

Global Sports develops and operates the e-commerce sporting goods businesses of specialty retailers, general merchandisers, Internet companies, and media companies under exclusive long-term agreements. The company operates the e-commerce sporting goods businesses of BlueLight.com -- the exclusive e-commerce partner for Kmart, , and a variety of other online e-commerce operations including one for The Sports Authority..