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UPDATED: SBO shut down rattles promoters, owner promises to repay debts

  • By VeloNews.com
  • Published Oct. 5, 2011
  • Updated Oct. 5, 2011 at 8:58 PM EDT

One of the western United States’ leading event registration companies, SportsBase Online, closed up shop over the weekend — leaving numerous promoters empty handed long after their events concluded.

On Monday, SportsBase Online (SBO) issued a short statement apologizing to event promoters, but informing them that payment for the thousands of registrations the company has processed over the past few months would not happen.

“We regret to inform you that due to financial reasons Sports Marketing Concepts, Inc. DBA SportsBaseOnline will be dissolving as of October 15, 2011 and is ceasing operations,” the statement said. “We have explored every option to avoid this outcome to no avail. There are no funds available and no tangible or other assets owned by the corporation that could be monetized to make restitution or pay claims.

“We apologize for this unfortunate circumstance.”

SBO sent another email Wednesday afternoon saying that at least some payments would be made soon.

“First off, we apologize for the unclear email that was sent on Monday, October 3, 2011.  Sports Marketing Concepts, Inc. DBA SportsBaseOnline is dissolving as of October 15, 2011 but has every intention of paying funds owed to all outstanding events with regard to registration fees.

“We are currently working to sell company assets and obtain private funding with which to do so.  We hope to have this solidified and have payments dispersed as soon as possible.  We will keep you posted with regard to your payment and what steps need to be followed to complete the transfer of funds.

The situation has promotors across the West wondering how, or if, they’ll ever dig their way out from the hole left behind in the SBO collapse.

The Northern California Nevada Cycling Association and Utah Cycling Association were each hit especially hard.
Bill Nicely, NCNCA president, said in a statement to NorCalCyclingNews.com the SBO situation will put the hurt on local promoters. Nicely’s statement was released prior to the Wednesday email from SBO.

“We are looking to help promoters affected by forgiving fees, getting USAC to forgive fees, and considering loans,” Nicely replied when asked what impact SBO’s shutdown would have.

“This affected all races from Giro (de San Francisco on Sept. 5) forward on SBO. About 65k in reg fees as a loss in total. The BOD is deeply saddened by this loss and we are grateful to USAC for their participation in lessening the burden to our affected promoters.”

In Utah, where SBO is headquartered, several races from July forward have yet to receive registration funds.

“We’re screwed,” was a common refrain from race promoters on Facebook and Twitter as they expressed frustration over the lost funds. One promoter, who wished to remain anonymous because of pending legal action, said he was personally out more than $10,000 and was unable to make the promised contributions to the charity his event was built to support.

SportsBase Online president and CEO Dirk Cowley included a PDF file of a Notice of Corporate Dissolution outlining steps and a timeline promoters could follow to file claims.

“Sports Marketing Concepts, Inc., a corporation organized under the laws of Utah, has been dissolved by corporate action. Persons with claims against the corporation must present them in accordance with this Notice. Unless sooner barred by any other statute of limitations, claims will be barred if a claim is not filed by the deadline contained in this notice,” the notice stated.

“Further if a claim is timely filed, the claim will be barred if an action to enforce the claim is not commenced within 90 days after the effective date of a written notice rejecting the claim.”

But with potentially hundreds of thousands of dollars in outstanding registration fees waiting to be paid and assets amounting to little more than a home office and a database, there is doubt those funds will ever be recovered.

“I suppose luckily for me, the total owed would be burned up in the first billable hour of a lawyer. So whining on the internet is the most cathartic, if not productive thing I can do,” one cyclocross series promoter wrote on Facebook.

After the news broke Tuesday, cyclists around the country began commenting and making accusations of criminal wrongdoing. Those accusations, Nicely said, were premature.

“I have direct information that this will be resolved in the next 24-48 hours,” Nicely said. “That’s all promoters.”

Nicely said the letter and notice of SBO’s dissolution were necessary legal steps that fueled a fire of speculation and uncertainty among event promoters and participants but that many of the accusations about SBO’s business practices were off base and not accurate.

“There’s a lot of people saying things and speculating about things they aren’t really aware of,” Nicely said.

Nicely said he had spoken with Cowley personally on Wednesday morning and that the SBO chief was taking the situation very hard and working every angle he could to pay off promoters left hanging. The notice of dissolution was the last option after trying to sell the company to pay off debts.

When a solution could not be found, Nicely said, Cowley took the legal steps to close up shop and begin liquidating personal assets to pay of the business debts.

“I respect Dirk immensely,” Nicely said. “His personally integrity is at stake and he is doing everything he can to make this right in the end.”

Cowley, reached by email Wednesday morning, said he did not want to comment on the situation until it had resolved.

FILED UNDER: News / Road

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