MaxPreps aims to dominate H.S. sports field
Aug 12, 2005

Sacramento Business Journal

MaxPreps Inc. sees pretty good prospects in telling Americans almost anything they want to know about high school sports.

Equipped with $2.25 million in fresh venture capital, the Cameron Park company is lining up new deals and services ranging from a Webcast national highlights show to a software program that writes game stories without human involvement. Teen-agers make up half of its audience so far.

One supporter even predicts MaxPreps will become the Internet equivalent of ESPN sports TV. That's pushing it, given the strictly local appeal of most high school sports, said another industry insider -- but he thinks MaxPreps could still score big.

MaxPreps does have a lot going on this summer. It has money to grow, is adding employees, has bought the title rights to a weekly TV high school sports show in New York, and next month it will debut its own national highlights show on the Web.

Reebok, MaxPreps' first major national advertising account, has begun running ads on its Web site, which MaxPreps said draws 600,000 to 1 million users a month. The California Interscholastic Federation, governing body for high school interscholastic athletics, has partnered with MaxPreps to sell photos after years of saying no.

A few weeks ago, MaxPreps signed an agreement with Topix.net, a content syndicator, that will distribute MaxPreps' software-written stories to Yahoo News and similar entities eager for local content.

Hurdles remain. A big one is getting every high school in the nation to consistently supply statistics.

Developing relationships quickly for the fast roll-out also will be important, said Scott Lenet, managing director of DFJ Frontier, one of MaxPreps' new investors and an affiliate of venture-capital firm Draper Fisher Jurvetson.

And it needs a profit. President Andy Beal -- a coach and son of a coach -- anticipates a small one for the coming school year.

Friends and rivals size 'em up
"The future is MaxPreps," said Mike Quick, host and producer of "MaxPreps High School Weekly," a high school sports TV show that airs on Madison Square Garden Network, the nation's largest regional sports network.

After running years without a sponsor, the show was briefly yanked last year until MaxPreps bought the title naming rights. It attracts about 50,000 viewers for weekly airings.

"I think they're way ahead of their time. This is a monster right now. They will eat up their competition. They hit the field running. They will be the ESPN of television sports," Quick said.

More like Fox Sports Net, a group of regional networks, countered Andy Bark.

Bark, who said he doesn't know much about MaxPreps, is president of Student Sports, an integrated high school sports company in Torrance that has print, online, TV, information, marketing events and custom research divisions.

National interest in high school sports will always be limited to the top athletes, Bark said. Still, commerce in high school sports is growing.

The nation's largest media companies have asked Student Sports to develop a national database of every high school team and every score, Bark said, but he declined. Developing it would cost at least $7 million, he calculated.

MaxPreps must have figured out a cost-effective approach, Bark said.

Student Sports provides information to Rivals.com, a network of recruiting and college sports Web sites that some consider to be MaxPreps' competitor. Student Sports' Internet network on the Rivals.com platform expects more than 1 billion page views this year, up from 600 million last year.

"The great thing about MaxPreps is that they're doing what no one else is doing," said Robert Braunstein, executive producer and host of "Cal-Hi Sports," a weekly prep sports TV show.

Smaller sites exist, such as one in the Bay Area, but none is as elaborate, deep or looks as good, he said.

Braunstein said MaxPreps' data help him do his show. In turn, he promotes MaxPreps.

Collection of prep sports data is moving online, just as stock listings have mostly moved from newspapers to Web sites, Bark said. Fans like going to his Web site 10 minutes after a game to watch a video of the action, he said -- why wait two days to read about the results in USA Today?

Investors get 30 percent for $2.25M
High school sports, Beal said, are a fragmented and "dramatically unserved market." By offering comprehensive information that looks professional, MaxPreps can unify high school sports and dominate.

DFJ Frontier liked MaxPreps because it will have a "defensible space" once it gets big, Beal said. After the company establishes relationships with coaches and others, a rival would find MaxPreps hard to displace.

MaxPreps' business plan prepares the company to be the biggest and best, and remain so, investor Lenet said. "What attracted me is that they're in a really unique position."

The group of investors took a 30 percent equity stake for their investment of $2.25 million, Beal said. The money will hire key people in sales, marketing and business development and expand the business nationally.

The scale of what MaxPreps is attempting is a challenge, Beal acknowledged. He's been pleasantly surprised, though, by "the gratitude that we receive from people interested in high school sports."

The record so far
MaxPreps' main service is supplying high school sports information online: stats, stories, photos, schedules, standings, scores, names of coaches, and even school colors and mascots.

When it launched in the 2002-03 school year, MaxPreps covered 55 schools in the Sacramento area. Coaches agreed to submit schedules, scores and statistics.

The next year it expanded to 1,200 schools throughout California. The Los Angeles Times hired MaxPreps to help the paper cover the 532 schools in its area. That same year, MaxPreps bought North State Prep Update, a Northern California Web site.

In 2004-05, MaxPreps expanded to include all high school football teams nationwide. The company delivered nearly 80 million pages of content to nearly 7 million users.

Beal's goal is to cover every sports team, every game and every player.

MaxPreps' Web site traffic grew 1,100 percent this past year, Beal said. It attracts 600,000 to 1 million users a month. The goal for this year is 800 million pages seen by 50 million visitors.

The company has more than 160,000 student athletes in its database, which it hopes to boost to 400,000 this school year.

Teens make up half of MaxPreps' audience, with their parents and others making up 35 percent and 15 percent, respectively.

Grandparents, friends, coaches and college scouts scroll through the Web site's data.

Recruiters use it
One university recruiting coordinator, who couldn't give his name because he cannot endorse any recruiting service, said MaxPreps saves college coaches time and energy.

They used to mail questionnaires to coaches asking for names of potential college players, then send questionnaires to the players. Then they had to type in the information.

Now they can learn what they need to know quickly and accurately.

MaxPreps is ahead of the curve, the recruiter said. "I think they'll be a major player in that arena for a long time. Whatever they do, they're good at."

Advertising is MaxPreps' primary source of revenue, so it has to stay interesting. "Underlying everything is the content," Beal said.

Has 200 photo shooters, seeks 1,000
Since 2003-04, MaxPreps also has been selling action photos to parents and fans on its Web site.

Two hundred photo enthusiasts, hobbyists and professional photographers receive royalties for their photos sold on MaxPreps, and MaxPreps gets a commission.

MaxPreps intends to have a network of 1,000 free-lance photographers by May.

As a new partner with MaxPreps, the California Interscholastic Federation will receive a percentage of gross revenue from each action photo sold on MaxPreps. MaxPreps will send its photographers to CIF events, and CIF will promote MaxPreps and offer links to the company's Web site.

"As they continued to grow, we became more and more intrigued," said John Tarman, assistant executive director of CIF. MaxPreps has demonstrated that it has legs and a good handle on the high school market. Through MaxPreps, media outlets can cut their costs while maintaining or expanding their coverage, resulting in more coverage of high school sports, he said.

MaxPreps' other new ventures include:

Next week's launch of a vertical search engine dedicated to high school sports. It'll crawl local newspapers and other high school sports-related sites. "It'll be very, very focused results for the users," Beal said. "This is part of our strategy to be the portal for high school sports."
Launching a school fund-raising program. Downtown Ford of Sacramento, the first participating merchant, issues a coupon through MaxPreps that allows car buyers to specify a school to receive a $200 donation from the dealer.
Hometown industry
MaxPreps morphed from a predecessor company called Waveshift Inc., founded in 1993. It developed Web software and services for the media industry.

In 2001 Waveshift bought the assets of a company that had developed a software system designed to help newspapers publish high school sports information. The McClatchy Co., publisher of The Sacramento Bee, invested in 1997, and bought all of Waveshift's assets except its sports business in 2002. The name changed to MaxPreps in April.

Sacramento has a history in collecting data about prep sports. The late Nelson Tennis of Sacramento collected the data as a hobby, then turned it into a business called Cal-Hi Sports in 1977. That marked the start of the industry.

Bark bought the business in 1986, and then started Student Sports three years later.

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