| Nova Scotia Firm SportsDirect Dominating North American Online Market |
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By BRUCE ERSKINE Business Reporter Tue. Jan 8 - 3:50 PM Paul Lavers says he’s not a betting man, but he thinks the growth in online advertising bodes well for his business’s future. "Online advertising grew by 30 per cent in 2007 and (is projected to grow) by 30 per cent in 2008," said the president and CEO of SportsDirect Inc., a Halifax firm that compiles and distributes online sports statistics, odds and news. "Advertising is moving online from print and TV and we’re positioned to help with that and to reach the sports demographic." Mr. Lavers said that growth should help the company, which was founded in 1995, recover from the effects of a strong Canadian dollar and other factors that have forced the business to retrench — a process that has led to about 90 layoffs since last April, including almost 60 last week. "It’s a shame to see good people go, but we had to resize for the market," said Mr. Lavers, whose firm signed a five-year agreement in 2006 with Nova Scotia Business Inc., the province’s business development agency, that would have given it $1.6 million in payroll rebates if it created 165 new jobs. "We haven’t touched it," said Mr. Lavers, who noted that economic factors like the soaring Canadian dollar and a U.S. government decision to shut out European online gaming companies from the U.S. marketplace started to make their presence felt on his business shortly after the rebate deal was inked."Sometimes you can’t fight macro trends," he said, adding SportsDirect had about 135 employees in 2006 and now employs about 60. "We had 40 per cent more revenue when the (Canadian) dollar was at 75 cents US. It’s a different market." Despite those challenges, the privately held company, which provides content to USAToday and MSNBC and operates properties such as Covers.com, Wagerline.com and Coversexperts.com, hasn’t been idle in the online marketplace. In July 2007, SportsDirectacquired ProSportsDaily.com, one of the Top 100 sports websites in North America, and BullySports.com., which offers fantasy games and contests for all major professional sports. "We own four of the Top 100 online sports properties in North America," said Mr. Lavers, noting his firm, which was named the best small- to medium-size business in Canada in 2006, also hosts online sports sites for more than 100 newspapers. Mr. Lavers said that while the recent layoffs were painful, they were necessary for the regrowth of the firm. "We’re profitable," he said, noting that traffic is up on the company’s sites. "It’s hard to take, but the company is positioned to grow again." Nova Scotia Business Inc. spokeswoman Sara Levy said it’s difficult to predict economic shifts like the surging Canadian dollar, which has had an impact on a number of Nova Scotia businesses. "It’s not always going to work out," she said, referring to SportsDirect’s employment growth projection at the time the payroll rebate agreement was signed. She noted, however, that because SportsDirect hasn’t met those employment targets, the rebate agreement hasn’t cost the province anything. Reprinted from The Chronicle Herald |
