Global Sports Joins Auction Fray With Sporting Goods Site

Seeking to leverage its e-commerce ties with some of America’s leading sporting goods retailers, Global Sports, Inc. (Nasdaq: GSPT) announced today that it plans to launch a sporting goods auction site in the fourth quarter of 1999.

The King of Prussia, Pennsylvania-based company said that it will launch the auction as part of the Sports Authority.com Web site and will include it in the FairMarket Auction Network, which reaches up to 46 million visitors.

Global Sports is an online e-commerce company that has entered into long-term agreements to operate the Internet businesses of a number of leading sporting goods retailers, including the Sports Authority, the Athlete’s Foot, Sports Chalet, MC Sports and Sports and Recreation.

The company reached an agreement with The Sports Authority to launch the Sports Authority.com earlier this year. Under the terms of the agreement, Global Sports owns 80.1 percent of the venture and The Sports Authority owns 19.9 percent.

“We believe the growth opportunity for category-specific online auctions is enormous,” said Global Sports founder and CEO Michael Rubin. “By offering individuals a chance to trade merchandise under the banner of such a well known and respected retailer, The Sports Authority and Global Sports are truly positioned to be the leaders in consumer-to-consumer sporting goods auctions.”

Home Field Advantage

The inclusion of the Sports Authority.com auction site into the FairMarket network gives it immediate recognition, something lacking in obscure auction sites for category-specific goods and services.

The Sports Authority operates over 200 sporting goods superstores in the United States and Canada and attracts some 50 million shoppers a year. It said it would do major in-store promotion to help jump-start the auction site.

Global Sports has deep resources as well. Softbank Capital Partners — the Internet industry titan — bought 30 percent of the company in July for $80 (US$) million. A majority investor in Yahoo!, E*Trade, Ziff Davis and dozens of other Internet companies, Softbank is renowned throughout the industry. Their investment gave Global Sports a seal of approval before it made so much as a nickel.

Forrester Research predicts that the market for online sporting goods sales will go from $70 million in 1998 to $1.9 billion in 2003. Given that Global Sports operates the Internet business of many of the country’s leading sporting goods retailers, it stands to reason that it will slice a significant piece of the pie for itself. The company reportedly pays retailers 5-10 percent of online revenue it generates.