CBS bids $9.5 million for Scout.com

Submitted by ypsituckyboy on

A low bid according to some reporters, but it could go through. If it does, would Sam Webb and Steve Lorenz become a dynamic duo (CBS owns 247Sports)? Hard to see the value for CBS in running 247 and Scout independently. Then again, if CBS scrapped Scout, seems that each of the site writers would either (a) try to jump to Rivals or (b) start their own independent/competing blog.

snarling wolverine

January 11th, 2017 at 4:28 PM ^

I like Sam, but I'd prefer not to see this site take him or any other recruiting guru on.  I fear that it would hurt the site's independent streak, where Brian/Ace are editorially free to express their opinions, whether positive or negative.  That would become much more delicate if the MGoStaff now had an insider who is dependent on cultivating good relations with coaches/recruits.

LKLIII

January 11th, 2017 at 4:52 PM ^

This is a good point.  A lot depends on the mission statement of MGoBlog.  If it's to remain a largely "analytical" site, then I agree that you don't want to have editorial conflict if you need to issue unfavorable opinionsi of the current coaching staff or AD.

Sam & other "insiders"--as well as journalists generally--have a difficult line they need to walk.  On one hand, readers are loyal because they perceive that they're getting accurate information realtively quickly--at least quicker than the generic news sources.  But on the other hand, in order to cultivate those relationships on the coaching staff/AD's office, a journalist needs to be seen as a sometimes ally of the staff.  That is, being trusted not to release certain information, hold back key info temporarily if embargoed by the staff, etc.

Essentially, Same & his ilk might sometimes have to selectively play ball w/ the information source in order to not get totally frozen out.

Whether that's a problem for Brian, Ace & MGoBlog is really dependent on the mission statement of the blog.

alum96

January 11th, 2017 at 3:19 PM ^

Usually in mergers redunancy is eliminated.  i.e. buy the subscribers - keep costs similar or slightly larger.  Not increase costs substantially by increasing staff by X%.

I wouldn't see the need for 2 dedicated UM reporters myself @ 247.

alum96

January 11th, 2017 at 3:24 PM ^

I don't buy it.  Scout failed.  247  is winning.  If it's so easy to go and compete someone would go and create that business tomorrow.  I'd argue there are already too many competitors and consolidation is needed.  That's what the marketplace has said.

Lorenz and Webb probably have 80% overlap and 20% uniqueness.  You don't take on salary, health benefits, 401k etc for another person when you already have a very like one in house.

"Sam's Scouting Talk LLC" is not going to be a threat to 247.

ypsituckyboy

January 11th, 2017 at 3:33 PM ^

I'd tend to agree with your overlap and uniquesness comments, but what's to stop MGoBlog from deciding to put a section on the blog as paywalled content and having Sam be the man behind the wall? I could easily see that being financially beneficial for both parties. Sam has connections and people will pay for his info. That's proven.

Just because Scout mothership goes under doesn't mean Sam wasn't doing well. It just means that Scout's guys as a group weren't generating enough revenue to sustain the business. So, I think what you'd see, is that Scout writers who are in demand in their markets would simply latch on with a competitor or go independent (kinda like that Iowa Awesome blog). And that's terrible for an acquiring company. You laid off everyone, when only a certain percentage of writers weren't pulling their weight. Now all the best ex-employees are now competing against you.

I Like Burgers

January 11th, 2017 at 5:04 PM ^

At a bid of just $9.5M, this is likely much more of a bid for subscribers and accounts than it is for content.  Buy Scout, give everyone with a Scout account a 247 membership, keep the best writers for each site, and jetision everything else.

Back in 2014, it was estimated that Scout had around 80k subscribers (200k for Rivals, and 70k for 247).  Now those numbers have likely changed a good amount, but if CBS thinks they can keep 40k subscribers on 247, then that $9.5M will pay for itself in a year and a half. (40k x $12.95/mo x 12/mo = $6.2M/yr)  Even if its only 20k that stick, it still pays for itself in 3 years.

Mr Miggle

January 11th, 2017 at 3:39 PM ^

Michigan writer. The payroll goes up if you replace someone at 247 with Sam, but it doesn't double and it keeps him away from Rivals. Considering that each 247 site sells their own subscriptions, I'd think that would be worth a lot to them. The Michigan site should one of their biggest.

I should also add that the reasons that Scout is failing aren't necessarily that they were beaten by their competitors. they were destroyed from the inside.

OwenGoBlue

January 11th, 2017 at 5:56 PM ^

They might reassign Sam or Steve to a different beat in that case, which would suck for those of us who have gotten to know/follow those guys over time. Both are good enough and connected enough that they should keep their place in the industry.

They already have multiple people writing about Michigan but most others seem to be of the #content click factory variety with quick hits that don't really say anything of value. I subscribed for a bit but that nonsense and all the slideshows (in 2015/16!) were a huge turnoff so I stopped.

If anyone would have multiple big time (and expensive to 247 relative to their other writers) insiders it would be Michigan. So there's that to hope for if this goes through.

jalenwestman

January 11th, 2017 at 4:32 PM ^

It's the great Sam Webb! You keep Sam for his subs and contacts, plus I think you could argue he is a better talent than Steve. I think they will find a way for both to cover Michigan, Michigan needs at least two quality guys to cover them with Harbaugh as the coach. Could also see them putting Steve on another school or making him a national guy.

Sam has a big enough following to go on his own but my guess is you will see him apart of 247 as the lead Michigan guy.

GoBlueinMN

January 11th, 2017 at 3:27 PM ^

The offer does, indeed, seem low to me. A quick search shows that Scout was purchased for $60 million in 2005 by Fox and was sold to NAMG for "substantially less" than that in 2013. 

For reference, Rivals was purchased by Yahoo in 2007 for "around $100 million."

 

LKLIII

January 11th, 2017 at 3:44 PM ^

The other thing in addition to the raw dollar amount of an offer is--what are the contingencies?  Often times, an acquiring entity doing an asset purchase agreement will require the entity being acquired lock up key employees with new binding employment agreements & non-compete agreements.

So part of the diligence that the CBS M&A you'd assume would be already pre-planning what a post-merger 247/Scout would look like, and whether the underlying pieces are there to actually making that happen.  If you're buying Scout for XYZ assets, but don't make sure that XYZ assets are there once the deal is done, you'd be catastrophically stupid.

FLwolvfan22

January 11th, 2017 at 4:17 PM ^

Anyone want to start a recruiting eval site, we get to create a ranking system, interview mammas about their kid and sell out in a few years for millions.