Cable operator Comcast Corp.
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.
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
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..