The open source sports web site Bleacher Report has been infused with another round of venture capital, receiving $22 million from Oak Investment Partners.
Fred Harman, general partner of Oak Investment, believes that Bleacher Report “has done a far better job of embracing the capabilities of the online medium than the big sports name brands have.”
Actually, what Bleacher Report has done is dupe bloggers into believing that having their content published on the site will provide them with recognition they wouldn’t otherwise receive.
While it’s an effective selling point for those who want to have their opinions published, the only people reaping the benefits are those who oversee the day-to-day at Bleacher Report.
Bleacher Report’s modus operandi is similar to that of the Huffington Post, specifically as it relates to Arianna Huffington’s refusal to compensate bloggers.
Huffington argued that having content published on her web site amounted to a privilege, saying that the Huffington Post provides bloggers with a platform that elevates them beyond anything they could achieve on their own.
That’s essentially the same argument that Bleacher Report makes, and like Huffington, it reeks of hypocrisy.
In November 2008, Bleacher Report received $3.5 million in series B venture capital funding, adding to the $1.5 million it received earlier that year. Hillsven Capital led the funding and was joined by Gordon Crawford, fund manager at Capital Research Global Investors.
In December 2010, Bleacher Report received $10.5 million in venture capital funding from Crosslink, which included $7.3 million from Angel Investors and Hillsven Capital.
With the announcement of the $22 million they got from Oak Investment, that totals at least $37.5 million Bleacher Report has received in funding since the site launched in 2008, and that amount doesn’t include initial funding.
And those millions in venture capital don’t include ad revenues either. Considering Bleacher Report is ranked in the top 1,000 web sites on the planet, it stands to reason they’re receiving healthy CPM’s which generate millions more.
Clearly, Bleacher Report deserves credit for their ability to raise capital, but it calls into question what they’re doing with the money.
Being that Bleacher Report is a privately held company, their financial statements are not available for public viewing. However, I can tell you where the money isn’t going – into the hands of bloggers who’ve made the site the Google gaming giant it has become.
To some extent, I don’t blame Bleacher Report for identifying a need and seizing upon it. That’s what successful entrepreneurs do, and they’ve taken that idea and turned into a site that generates 20 million page views a month.
But just as the Huffington Post used bloggers to game Google, Bleacher Report has done exactly the same thing.
And just like Huffington, I’m sure the people running Bleacher Report would attempt to justify the reasons for not paying bloggers, but those explanations could all be refuted.
Arianna Huffington made millions in part off the sweat of bloggers, and as the millions continue to roll in for Bleacher Report, the bloggers get nothing while the people at the top line their pockets.
There’s nothing anyone can say that justifies that reality.
