EXHIBIT 99.4
Friday June 11, 7:00 am Eastern Time
Company Press Release
SOFTBANK Corp. to Acquire 30% of Global Sports for $80 Million
Global Sports to Focus Exclusively On E-commerce
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--June 11, 1999-- Engages Deutsche Banc
Alex. Brown to Divest Non-internet Assets
GLOBAL SPORTS, INC. (NASDAQ: GSPT - news) today announced a definitive strategic
investment agreement whereby SOFTBANK Corp., will acquire an approximate 30%
interest in the company on a diluted basis, for $80 million.
Global Sports, Inc. also announced that going forward it will focus exclusively
on its e-Commerce business, Global Sports Interactive ("GSI"), and that it has
engaged Deutsche Banc Alex. Brown to divest its non-Internet assets, including
the Branded Division, consisting of Ryka and Yukon, and the Off Price & Action
Sports Division. With the proceeds from the SOFTBANK's agreement, Global Sports
intends to accelerate investment spending in GSI, significantly furthering its
pursuit of becoming the leading e-Commerce company in the sporting goods
category.
Last month, Global Sports, Inc. announced the formation of Global Sports
Interactive, a breakthrough e-Commerce company with long-term exclusive
agreements to operate the e-Commerce businesses for leading sporting goods
retailers with combined annual sales of more than $3.0 billion. Currently, GSI
has an e-Commerce partnership agreement with The Sports Authority and e-Commerce
contracts with The Athlete's Foot, Sport Chalet, MC Sports, Sports & Recreation
and one other retailer with annual sales in excess of $200 million. The sales
results for the Sports Authority partnership as well as over 90% of the online
sales for GSI's other five partners will be included in the consolidated
financial statements of Global Sports, Inc. GSI expects to leverage the well-
known brand names, substantial existing marketing visibility and established
customer bases of these retailers to efficiently drive consumer traffic to its
Web sites. By building a single best-of-breed organization and technology
platform to run multiple e-Commerce sporting goods businesses, GSI is positioned
to realize significant economies of scale, which could be further enhanced as
the company seeks to expand its initial client base. GSI's plan to accelerate
investment spending will include stepped up incremental marketing efforts, an
aggressive content acquisition plan and a more rapid rollout of international
operations.
Masayoshi Son, President and CEO of SOFTBANK Corp., said, "Global Sports
Interactive embodies everything that is necessary for success on the Internet,
including a brilliant business model, strong entrepreneurial management and a
focus on a wide open opportunity. Our agreement with Global Sports, which
represents one of the larger investments by SOFTBANK
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in an e-Commerce company, will provide financial support that will assist it to
build its business and realize on its vision. We believe that the $150 billion
worldwide sporting goods industry has enormous untapped potential for e-Commerce
and that Global Sports, through its partnerships with six leading retailers is
well positioned to lead the category."
The SOFTBANK investment is for 6,153,850 common shares of Global Sports, Inc.,
and is expected to close in its entirety pending expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act and approval of
the transaction by a majority of Global Sports, Inc. shareholders, which is
expected to occur in July. Michael Rubin, Chairman and CEO of Global Sports,
Inc., who owns more than 65% of the currently outstanding shares, has agreed to
vote in favor of the SOFTBANK transaction.
In conjunction with its decision to become a pure-play e-Commerce organization,
the company intends to announce a new name and corporate identity to replace
Global Sports, before the launch of its initial six e-Commerce Web sites in the
fourth quarter of 1999. Excluding the results of its non-Internet businesses and
factoring in the company's intention to significantly accelerate investment
spending in GSI, Global Sports, Inc. anticipates that it will report operating
losses for the foreseeable future. Because of Global Sports' decision to divest
its non-Internet assets, the company intends to account for the results of its
Branded and Off Price & Action Sports Division's as discontinued operations
beginning in the second quarter of 1999.
Michael Rubin, Chairman and CEO of Global Sports, Inc., commented, "We are
extremely excited to have SOFTBANK join our company as a strategic partner.
Their track record, which includes backing online powerhouses such as Yahoo! and
E*Trade, has clearly established them as the preeminent source of capital for
leading Internet companies. Our goal of becoming the leading e-Commerce company
in the sporting goods category is ambitious and will require a substantial
financial commitment and complete focus on our part to achieve. With SOFTBANK as
our partner we are confident that the necessary resources are available for us
to aggressively build Global Sports Interactive in a way that will enable its
bold vision to become a reality. While we anticipate substantial investment
outlays during the start-up phase of GSI, we firmly believe that our model can
deliver superior long-term returns relative to many other e-Commerce companies,
based on combining the built-in advantages of leading traditional retailers with
the clear benefits of a Web-centric organization."
Rubin, continued, "Our decision to divest our non-Internet assets was not easy
as these businesses have achieved tremendous success and continue to have
significant growth potential. Throughout our company's history we have evolved
by pursuing new growth opportunities within the sporting goods industry and the
emergence of GSI is a continuation of this natural progression. However, we
believe the potential to create upside for our shareholders through the
development of GSI is a very significant opportunity for our company that
requires the full attention of management. Given the magnitude of capital raised
from SOFTBANK, our
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divestiture plan was not predicated on financial needs but rather reflects our
recognition of the significant focus that is necessary to compete in this
rapidly evolving new medium and our desire to avoid any conflicts between our
wholesale and e-Tailing operations. We are confident that by working with an
investment bank of the caliber of Deutsche Banc Alex. Brown we are properly
approaching the divestiture process."
Global Sports, Inc. (http://www.GS-Interactive.com), through its Global Sports
Interactive Division is an e-Commerce company that operates the Internet
businesses of multiple sporting goods retailers, including The Sports Authority
through an e-Commerce partnership agreement, and The Athlete's Foot, Sport
Chalet, MC Sports, Sports & Recreation and one unnamed retailer with annual
sales of more than $200 million, through e-Commerce outsourcing contracts. The
partnership with The Sports Authority is initially 80.1% owned by Global Sports,
Inc. and 19.9% owned by The Sports Authority, with options for The Sports
Authority to increase its ownership in the partnership to 49.9% over time.
SOFTBANK Corp. (http://www.softbank.co.jp.com), is a leading provider of
information and distribution services for the digital information industry. In
Japan, SOFTBANK is the largest distributor of software and computer technology
publications. In the United States, SOFTBANK owns approximately 72 percent of
Ziff Davis, Inc. (NYSE: ZD - news), 28 percent of Yahoo! Inc. (NASDAQ: YHOO -
news), 80 percent of Kingston Technology Company, 27 percent of E*Trade Group,
Inc. (NASDAQ: EGRP - news) and has signed a definitive agreement to acquire 30%
of Global Sports, Inc.
Note: The current Web sites operated by GSI's partners have not been built by
GSI and are not operated by GSI. These Web sites will be replaced by ones built
by GSI at a later date in 1999.
Statements about the Company's outlook and all other statements in this release
other than historical facts are forward-looking statements. Since these
statements involve risks and uncertainties, they are subject to change at any
time and the Company's actual results may differ materially from expected
results. The Company derives most of its forward-looking statements from its
operating budgets and forecasts, which are based upon many detailed assumptions.
While the Company believes that its assumptions are reasonable, there are
inherent difficulties in predicting certain important factors, especially the
timing and magnitude of sales and the overall condition of the footwear
industry. These factors, as and when applicable, are discussed in the Company's
filings with the SEC, a copy of which may be obtained from the Company without
charge.
Editor's Note: In the seventh paragraph, the symbol between "E" and "Trade" is
an asterisk.
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- ----------------------------------------------------
Contact:
Global Sports, Inc., King of Prussia
Michael R. Conn, 610/768-0900
Connm@Globalsportsinc.com
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