According to AA’s sources, the payment delays stretch back to last year, and an e-mail Heckman sent to Scout publishers in December about a new round of funding mentions them:
Dear valued publishers,
I wanted to formally announce today that Scout has closed a new round of long-term funding. Investors include the iHeart CEO/founder Bob Pittman, former Yahoo CEO Ross Levinsohn and me, as well as the founders of Moat, Right Media, AppNexus and the CEO of MediaOcean. It’s an exciting investor group.
We have transformed the platform and grown your audience dramatically since taking over last year, and this funding allows us to continue to invest in your product on a steady basis. We’re now the largest privately held, digital sports network in North America — and our new resources will allow us to build on that momentum, just in time for bowl season, countdown to national signing day, the NFL playoffs and our Fantasy Football World Championship.
I also wanted to apologize for the recent delay in your monthly payment. They are being processed today, will be sent immediately and we promise to communicate individually.
We’ve scheduled a conference call for 4:30 p.m. ET today, when I’ll be speaking with you all. The dial-in number is 917-444-5566 (no pin required).
Feel free to send me a note if you have any questions, and I’d like to wish you and your families happy holidays. Look forward to talking later this afternoon.
Thank you.
jch
The delays continued this year after the new investors came in, too, with publishers and writers frequently not informed that they were going to be delayed. Network-wide payments were often a week late or more, with no advance notice, and a source tells AA that Scout hasn’t paid anyone on time in “several months.” That led to an angry e-mail thread complaining about the late payments near the start of May, with writers blaming those for rent checks and auto-pay bills bouncing. Several writers said their emails to higher ups weren’t returned,and there was no corporate response until a day later. After that, there was this letter from the board in June, confirming the issues with late payments and announcing Heckman’s move from CEO to chairman:
There have been issues beyond just late payments, too. Awful Announcing has learned that Scout has been shutting down tech resources like Scout Now and cutting back on its budgets for items such as sites’ bowl coverage for the last couple of years. They’ve sometimes been asking one team’s writer to also cover the other competing team, and there have been plenty of complaints about the level Scout has paid writers at in general. There have also been comments about individual publishers not knowing the overall company’s long-term plan and direction, with some initiatives (including an apparent Heckman idea of pairing each NFL site with a former player) being much-discussed, then being quickly abandoned (in that case, after Heckman’s exit as CEO). One source told AA, “My life has gone downhill since we joined Scout. Fuck them.”
This is just the latest twist and turn in the long history of Scout and other recruiting sites, which AA’s Ben Koo summarized in this 2010 post. Heckman started Rivals in the late 1990s (that story also has some interesting details on the recruiting violations he was accused of around the University of Washington football program, then coached by his father-in-law, Don James), was ousted when an IPO failed around the bursting of the dot com bubble, tried to buy the site back, but lost it to a group that involved Shannon Terry. Heckman then started competitor The Insiders in 2001, changed its name to Scout, and sold it to Fox in 2005. Terry sold Rivals to Yahoo in 2007, then started 247 in 2010 and sold it to CBS last December.
Meanwhile, Scout had some major issues under Fox, including a class-action lawsuit they settled for over $5 million in 2009. Heckman worked at Fox for a while and was a key part of some big deals, including the $900 million MySpace/Google deal, then left, worked at Yahoo for a while as senior vice president (strategy and emerging businesses for the Americas), left Yahoo and partnered with MTV founder Bob Pittman to buy Scout back in November 2013 as part of a larger media group. Things have been relatively quiet since then, and Scout has nabbed some big recruiting sites from Rivals lately, but all certainly doesn’t seem to be smooth there any more.
These moves have created quite a firestorm, with one Scout publisher telling AA “The Slack channel was almost unreadable, the messages were coming in so quickly.” They’ve also sparked speculation about the company’s future. Some outside observers have long been critical of Heckman’s spending, and questions have been raised about what happened to the funding from Pittman, why there were these apparent payroll issues, and why these Russian investors were brought in. It seems likely there will be plenty of further accusations on both sides here, too. Moreover, with no CEO and no tech team (although a source indicates investors believe they may be able to coerce the tech team to return), Scout’s future doesn’t look bright, and there’s speculation the company may be snapped up by either Yahoo’s Rivals or CBS’ 247. It looks like we’re set for yet another roller-coaster ride in the world of recruiting sites.
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