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Global Outdoors, Inc.

 


Address:
43445 Business Park Drive
Temecula, California 92590
U.S.A.

Telephone: (909) 699-4749
Fax: (909) 699-4062
http://www.globaloutdoors.com

Statistics:
Public Company
Incorporated: 1984 as Global Resources, Inc.
Employees: 70
Sales: $17.2 million (2001)
Stock Exchanges: NASDAQ OTC
Ticker Symbol: GLRS.OB
NAIC: 513210 Cable Networks; 561599 All Other Travel Arrangement and Reservation Services; 721211 Recreational and Vacation Camps


Company Perspectives:
Global Outdoors, Inc. is a dynamic, publicly traded company involved in two distinct types of growing businesses, ownership of The Outdoor Channel and of recreational gold prospecting membership associations and the related trips division.


Key Dates:
1984: Global Resources, Inc. and Gold Prospectors' Association of America (GPAA) are incorporated as affiliated companies in Alaska.
1990: Global Resources begins producing the Gold Prospector Show, an infomercial designed to sell memberships in GPAA.
1993: GPAA launches The Outdoor Channel as a part-time network.
1995: Global Resources acquires 100 percent of GPAA's stock.
1996: Global Resources changes its name to Global Outdoors, Inc.
2001: The Outdoor Channel celebrates its ten millionth subscriber.


Company History:

Global Outdoors, Inc.--known as Global Resources, Inc. from 1984 to 1996--owns and operates The Outdoor Channel and related businesses that appeal to outdoor enthusiasts, especially to amateur gold prospectors. These related businesses include the Gold Prospectors' Association of America (GPAA) and LDMA-AU, Inc. (Lost Dutchman's Mining Association).

The Outdoor Channel (not to be confused with the more widely distributed Outdoor Life Network) was launched in 1993 and began full-time broadcasting in 1994. As of March 1, 2002, it was carried on some 3,800 cable systems representing a potential audience of 33 million households. Of those, The Outdoor Channel had approximately 11.7 million subscribers. It also was seen on various satellite systems.

Gold Prospectors' Association of America (GPAA) is the largest recreational gold prospecting club in the world with some 34,000 members. It sponsors an annual gold prospecting trip to Alaska, as well as other prospecting trips. It also sells products and services related to recreational gold prospecting and publishes the magazine Gold Prospector. The Lost Dutchman's Mining Association (LDMA) is a national gold prospecting campground club with about 6,000 members. LDMA owns campground properties in California, Oregon, Nevada, Arizona, Colorado, Georgia, and North and South Carolina. The Trips Division of Global Outdoors sponsors annual recreational prospecting trips to the gold mining region of California and to the company's 2,300-acre gold mining camp located near Nome, Alaska.

Diverse Businesses Focusing on the Outdoors: 1984-96

Global Resources, Inc. was incorporated in Alaska on October 22, 1984. At the same time Gold Prospectors' Association of America (GPAA) was incorporated as an affiliated company of Global Resources, which began selling memberships in GPAA. Prior to that, from 1968 to 1984, memberships in GPAA were sold by a proprietorship operated by Global Resources' founders, including George Massie. Global Resources and GPAA were incorporated when Massie raised $500,000 in a blind-pool public offering to fund trips to Alaska for GPAA members.

In 1990 Global Resources began producing the Gold Prospector Show, a long-form infomercial designed to sell memberships in GPAA. In 1992 the show was broadcast on a wider range of broadcast and cable television channels, with Global Resources purchasing the air time. Wider airing of the Gold Prospector Show resulted in a boost in GPAA memberships.

GPAA launched The Outdoor Channel in 1993. Global Resources intended The Outdoor Channel to be a primary vehicle for promoting its products and services, including memberships in GPAA. The Outdoor Channel also would promote the Lost Dutchman's Mining Association (LDMA) and its Trips Division. A long-term contract between Global Resources and The Outdoor Channel gave Global Resources the rights to ten hours of programming time and 30 60-second advertising spots per week. In February 1995 Global Resources acquired 100 percent of GPAA's stock for 2.5 million shares of stock valued at $8.75 million.

From 1990 to 1995 Global Resources financed its activities with cash flows from operations. In January 1996 a private placement of common stock raised gross proceeds of more than $832,000, with net proceeds to the company of about $700,000. In August 1995 Global Resources officially changed its name to Global Outdoors, Inc. The name change became effective July 23, 1996.

In 1994 George Massie's sons, Perry T. Massie and Thomas H. Massie, took over their father's executive roles. Perry Massie, who was CEO of Global Resources since 1986, assumed the additional roles of president and chairman. His brother, Thomas Massie, became executive vice-president of Global Resources and president of GPAA.

As of 1995, the LDMA, a national recreational gold prospecting campground club, had more than 4,700 members. Exposure over The Outdoor Channel resulted in 3,500 new members joining the club between January 1993 and the end of 1995. As a result of a major marketing campaign, approximately 1,600 new members joined the LDMA in 1995. Membership in LDMA cost up to $4,500, with significant discounts available to those who purchased memberships at gold trade shows or outings sponsored by Global Outdoors. Members were entitled to use any of the 14 campgrounds owned by the company or by affiliated organizations. Members were allowed to keep all gold found while prospecting on any of the company's properties. By mid-1996 LDMA had more than 6,000 members, but membership leveled off at more than 5,000 for the latter part of the 1990s.

Global Resources' Trips Division sponsored unique recreational prospecting trips to Australia and to the company's 2,300-acre campground near Nome, Alaska. Its principal trip was the annual trip to Alaska. Participation in the Alaska trip grew from 100 people in 1982 to 369 in 1995; in some years more than 500 people participated in the Alaska trip. The Trips Division introduced a trip to Australia in 1995, which went to the Western Australia gold fields. For 1996 the Trips Division offered six two-week and six four-week excursions to Australia. Global Resources also owned a 51 percent interest in American Prospecting Equipment Co., which marketed products for the recreational prospector.

The Outdoor Channel: 1993-2002

The Outdoor Channel was the first national television network devoted primarily to traditional outdoor activities, including hunting, fishing, shooting sports, rodeo, and recreational gold prospecting. Launched in 1993 as a part-time network, it began broadcasting full-time in April 1994. Its owner was originally the GPAA, a separate company affiliated with Global Resources. Global Resources became the owner of The Outdoor Channel in February 1995, when it acquired 100 percent of GPAA's stock.

GPAA was headed by George Massie and his son Perry. GPAA began buying infomercial time on broadcast stations in the mid-1980s for its gold prospecting show. The infomercials sold GPAA memberships. As the price of infomercial time increased, GPAA purchased an hour of cheaper satellite time. It began acquiring related outdoors programming on a barter basis and eventually filled a 24-hour channel. When GPAA purchased a transponder, The Outdoor Channel was born.

Before it obtained cable distribution, The Outdoor Channel was available to C-band satellite subscribers. The company focused its efforts on obtaining wider distribution primarily in areas where there was the greatest number of outdoor enthusiasts, which meant cable systems in rural areas. In 1995 The Outdoor Channel's signal became available via a satellite that was easier for multi-system operators (MSOs) to pick up. By the end of 1995 The Outdoor Channel had national carriage agreements in place with several MSOs, including TCA Cable, the 21st largest MSO in the United States with more than 600,000 subscribers; Fanch Communications (250,000 subscribers); Service Electric Cable (250,000 subscribers); Bresnan Communications (200,000 subscribers); and the National Cable Television Cooperative, whose unaffiliated members had more than 4.5 million subscribers. The Outdoor Channel also was broadcast via direct broadcast satellite (DBS). Its satellite signal was unscrambled, so viewers did not have to purchase subscriptions.

In 1995 The Outdoor Channel produced about 15 percent of its programming and acquired the rest from other sources. Its programming was aimed at the outdoor enthusiast and included shows devoted to hunting, fishing, recreational gold prospecting, rodeo, and scuba diving. Programming also included talk shows emphasizing issues related to the outdoors. The company's strategy was to produce and acquire higher quality programming over time, such as the Bass Champions Team Tournament Trail, which The Outdoor Channel began broadcasting in 1998.

In February 1996 Global Outdoors hired Christopher B. Forgy as president and CEO of The Outdoor Channel. Forgy was formerly senior vice-president of marketing, sales, and programming for Times Mirror Cable Television and was the immediate past chairman of the Cable Television Administration and Marketing Society. When Forgy was hired, The Outdoor Channel had only 400,000 cable subscribers out of the five million homes it was reaching. About 1.5 million homes were receiving The Outdoor Channel via syndicated distribution on low-power broadcast stations, and the rest came from backyard satellite dish owners.

When Forgy left The Outdoor Channel at the end of 1997, he was replaced by Andy Dale, formerly senior vice-president of operations, who became president and chief operating officer (COO). Chairman Perry Massie assumed the position of CEO until September 1998, when Dale was named CEO and co-president. The Outdoor Channel was in the process of trying to sell a minority stake in the network and raise up to $4 million. At the time the network was operating with a staff of 15 people. Since it was founded in 1993, The Outdoor Channel had lost about $5 million, a relatively small amount for a start-up cable network.

In 1999 The Outdoor Channel was launched as an a la carte or stand-alone channel on Dish Network for $1.99 per month. In 2000, it became part of Dish Network's Top 150 package. By March 2002, The Outdoor Channel had 2.4 million subscribers on Dish Network.

Toward the end of 1999 The Outdoor Channel launched a $3 million marketing campaign designed to increase consumer awareness and demand. The bulk of the campaign consisted of print ads in outdoor-sports-oriented magazines that ran during the first half of 2000. Radio and television ads were scheduled for the second half of the year. During 1999 The Outdoor Channel reported an increase in subscribers from 4.5 million to 6.2 million.

During 2000 The Outdoor Channel added several new series, including ATV Television, Motorcycle Digest, Motorcycle Adventures, and Classic Car Garage. The channel also added Raceline, a weekly show about NASCAR racing, and Roadfaring, a show designed for RV fans. The Outdoor Channel also was broadcasting more than 50 different weekly programs devoted to hunting and fishing, including 14 different programs focused on bowhunting. It tried to distinguish its programming from that of the Outdoor Life Network by not showing any programs about mountain biking, skiing, or rock climbing.

Toward the end of 2000 Global Outdoors, which owned 84 percent of The Outdoor Channel, announced that it was exploring alternatives, such as a strategic investment partner or equity financing. Chairman Perry Massie made it clear that The Outdoor Channel had a substantial cash reserve and no significant debt and was under no financial pressure to seek outside funding.

For 2000 Global Outdoors reported revenue of $13.98 million, nearly 55 percent more than 1999. Net income grew 9.1 percent to $2.1 million, up from $1.9 million in 1999. During the year The Outdoor Channel added 2.8 million cable and DBS subscribers and was broadcast in nearly 12 million homes, not all of which had to subscribe to the channel to receive it. In the first quarter of 2001 The Outdoor Channel celebrated its ten millionth subscriber.

In August 2001 Global Outdoors hired investment banker Bear Stearns & Co. to support the growth of The Outdoor Channel. At the time Global Outdoors noted that although it was cash-flow positive, the company felt the right partner could help increase The Outdoor Channel's market penetration. Analysts speculated that competition was heating up between The Outdoor Channel and Outdoor Life Network (OLN), after Comcast Corp. bought out the other owners of OLN in May 2001.

For 2001 revenue increased 24 percent to $17.2 million, but earnings declined to $810,888. Lower income for 2001 was attributed to the addition of employees during the year as well as to increased technical expenses and paring down some debt. The company also was stuck with more than $1 million in bad debt from a company that provided The Outdoor Channel with infomercial clients. As a result, The Outdoor Channel began handling its own infomercial bookings, a less costly arrangement.

In January 2002 The Outdoor Channel signed a national affiliation agreement with Comcast Corp., the third largest MSO with eight million subscribers. It also renewed its affiliation agreement with the National Cable Television Cooperative, an association of small and mid-sized cable operators representing 13 million households. As of March 1, 2002, The Outdoor Channel was carried on some 3,800 cable systems representing a potential audience of 33 million households. Of those, The Outdoor Channel had approximately 11.7 million subscribers.

Principal Subsidiaries: The Outdoor Channel, Inc.; Gold Prospectors' Association of America, Inc.; LDMA-AU, Inc.

Principal Competitors: ESPN2; The Outdoor Life Network; The National Network.





Further Reading:


  • Brown, Rich, "NCTC Taps Four New Nets," Broadcasting & Cable, February 3, 1997, p. 70.
  • ------, "Outdoor Signups," Broadcasting & Cable, November 27, 1995, p. 88.
  • "The Business Press, Ontario, Calif., Company Earnings Column," Knight-Ridder/Tribune Business News, April 9, 2001.
  • Gold Prospectors' Association of America, "What Is the GPAA?," June 26, 2002, http://www.goldprospectors.org.
  • "Hunting Seven Days a Week," Bowhunting, July 2000, p. 26.
  • Katz, Richard, "Battle of the Outdoor Channels," Multichannel News, April 29, 1996, p. 64.
  • ------, "Times Mirror's Forgy Scales a New Mountain," Multichannel News, May 20, 1996, p. 3.
  • Moss, Linda, "Forgy Exits Outdoor Channel," Multichannel News, December 8, 1997, p. 150.
  • ------, "Outdoor Channel Gets Comcast Deal," Multichannel News, January 28, 2002, p. 10.
  • "Must-See TV," Sport Truck, April 2000, p. 22.
  • "New Networks: Our List So Far," Multichannel News, November 28, 1994, p. 88.
  • "Outdoor Channel Breaks $3M Marketing Effort," Multichannel News, December 6, 1999, p. 112.
  • "Outdoor Channel Explores Options," Multichannel News, October 30, 2000, p. 2.
  • "Outdoor Channel Reports 24 Percent Jump in 2001 Revenues," Knight-Ridder/Tribune Business News, April 6, 2002.
  • "Outdoor Channel Weighs Options," Multichannel News, August 20, 2001, p. 6.
  • Pomerantz, Dorothy, "Call of the Wild," Forbes, May 27, 2002, p. 152.
  • "Temecula, Calif.," Multichannel News, November 9, 1998, p. 44.
  • "Temecula, Calif.-Based Cable Channel's Subscriber List Tops 10 Million," Knight-Ridder/Tribune Business News, May 16, 2001.
  • "Temecula, Calif.-Based Outdoors Channel Hopes to Woo Media Partner," Knight-Ridder/Tribune Business News, August 24, 2001.

Source: International Directory of Company Histories, Vol. 49. St. James Press, 2003.




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