This is a response to a question on another thread. It involves you all so I thought I would share it.
BBBabe. I'm not invested in IHTL but follow it because of it's ties to convergence. I'm the largest cheerleader of Questec (OTC BB: QSTI) and began my education about convergence from my DD about that company. While I have resisted jumping in on the discussions recently on this thread about the MMs (Because we went through an identical thing, but don't get me started), I wanted to respond to your questions about the industry. I encourage all to read this post as I have conducted monay many hours of DD in this filed and believe it is factual and to the point.:
Welcome to the world of convergence and mainstream sports technology. There are big players in this arena. Technology enablement for digital media has been developed and commercialized. And not just for baseball. There are several major players in this game. They are SporTVision, Princeton Video, Orad, QuesTec and ACTV. All of these
companies have solid relationships with broadcasters.
SporTVision (private company seeking additional funding) and Princeton Video, PVII-Nasdaq, are recognized mostly for there recent work with Football. The 1st and 10 down line was introduced by SporTVision on ESPN and PVII came out with their own version of that product several
weeks later on CBS. This was a lay-up PVII, their core technology is image processing for virtual signage.
SporTVision repackaged the technology for this Football product from the glowing puck that FOX introduced and later abandoned. This product was actually the proof of concept from QuesTec (QSTI - OTC BB) The Palm
Beach Post did a nice feature story on this in the fall to 1995. SporTVision's management team is comprised of former CBS Sports, FOX Sports, NewsCorp and Shoreline employees. The major problem with the glowing puck was that even national games on a big network like FOX could not support the cost structure of intrusive telemetry technology.
FOX invested over $2 million in product development and approximately $60,000/production to air a product that worked only 50 percent of the time. That was the price to track one puck, any idea what it would costs to tag 22 plus footbal players? As for putting something in the football, the NFL has been approached many times. The answer is NO WAY. The first time a multi million dollar mainstream athlete says he doesn't like the feel, or "I won't use it", the technology is gone. This is the reason that catcher cam is not always used during national baseball games.
Orad (private company, curreently shopping the street for additional funding), has been producing virtual replays for Soccer in Europe and Asia for several years now. Their core business and technology is derived from Virtual Studios and virtual signage. Orad has been promoting a telemetry technology for soccer for the past two years.
Anyone at IBC in Amsterdam this month can see it again. No one has approved the technology. Orad has been unable to penetrate the US market. They are an Israeli based company.
ACTV (IATV - Nasdaq) www.actv.com seems to have the pole position for interactive television and soon hyperlink TV (internet and TV combined on their own Pay service on cable. ACTV has been working with QSTI technology for over a year now.
QuesTec (QSTI) www.questec.com has designed systems for baseball, golf and most recently Tennis. They seem to have the strong hold on the technology and the market. Their productions have been seen around the world for such major events as the World Series for baseball, French Open for Tennis and the World Cup and Million Dollar Challenge for Golf. They have forged ahead into convergence with Williams Company's ChoiceSeat product WMB-NYSE for in-stadium entertainment, Interactive Television with ACTV-IATV-Nasdaq, FOX, NBC, ESPN, Major League Baseball, Silicon Graphics-SGI-NYSE.
Internet: they transmitted real-time pitch by pitch trajectories of this years All Star Game on majorleaguebaseball.com and CBS SportsLine,
SPLN-Nasdaq. Military technology? QuesTec is military technology. They are partners with Atlantic Aerospace Electronics Corp., a Titan Company TTN-NYSE. The company has a solid OEM established in Wiesbaden, Germany just outside Frankfurt and they shutdown their office in Singapore in 1996. Singapore Government has great programs for funding development, but they also expect to own part or all of the end product. Not the right approach for small public companies.
QKKA, great offering for the underwriters and principles of the company. When are we going to see mainstream sports. Olympics, nice touch with NBC. Who is paying who? That is an awful lot of eggs in one baseket. But hell, with all that money they can afford to make a few
mistakes.
Silicon Graphics and QuesTec worked extensively on NFL and auto racing several years ago. NBC featured a pass pattern system during their coverage of the 1998 Super Bowl. It was all manual data entry. The intrusive telemetry technologies were rejected by the governing bodies. NFL refuses to add telemetry based technology into their stadiums and getting the individual racing teams to allow their car info to be received and broadcast, NO!
That is not to say that this won't change in the future, but this is along process. IATV, PVII, Orad and QSTI have all learned that. More power to companies like IHTL, QKKA and Trakkus (private company seeking management and funding) www.trakkus.com. BY NO STREATCH OF THE
IMAGINATION IS SPORTS TECHNOLOGY AND CONVERGENCE A NEW CONCEPT.
I have been intrigued by this industry and concept for several years now. I do my homework and check out all of the players. IHTL intrigues me, but I haven't jumped in with both feet. When I do invest, it is for the long haul. When I buy big, I invest, I can not pick the highs and lows. As long as the company remains focused and on course, it makes sense to hold.
Some things that alarm me about IHTL: What is the true number of outstanding shares?. On a web based interview last February I heard the CEO state that there were 15 million shares outstanding. Post 861 puts that number at 25 million today. That's a 10 million share increase in
six months. Was there a private placement that I missed or is this insider selling to support the company? If insiders did sell how much of that $6 plus million made it back into the company? I have searched for insider reports, can't find any. The release about the funding was
encouraging, who is it and what is the company giving up? Will this put the outstanding over 30 million shares?
I'll reserve my MM comments for a later post.
Advertising: networks don't usually sell billboard advertising for scores and stats. These are usually given away to sponsors to help close deals. Any company that attempts this "business to consumer" approach had better have unique, informative and educational content, or
have full control over the distribution channel. Other wise, they had better make sure that their technology fits into the production budget.
Data rights issues? Another topic for another day.
This is a compelling industry, but make sure you do your own DD. When the dust finally settles, not all the players will still be standing on the field. |
