Originally created 07/13/01

Elway is thrown for a loss after MVP.com throws in the towel



Like many sports fans, Pamela Buckley of Erie, Colo., held John Elway in high esteem. The guy won back-to-back Super Bowls for the Denver Broncos - what's not to admire?

But Elway's image took a beating this year when MVP.com, the Internet company he trumpeted in partnership with Michael Jordan and Wayne Gretzky, quietly slipped away. For many, Elway's untarnished reputation went with it.

Buckley and other consumers endured inconveniences, long uncertainties and out-of-pocket expenses when MVP failed to rally its online sporting goods venture before the final whistle.

"MVP pretty much just dropped us," said Buckley, who tried to buy an $809 treadmill last December, just as MVP was going down the tubes. "Anytime I see John Elway-anything, that's what I think of. So I don't have anything good to say about him, either.

"I thought about going to the golf tournament (Elway's recent charity event) and saying to him, 'Hey, have you ever heard of MVP? Whatever happened to that?' "

It's a short, all-too-common story: Venture capital disappears, debts come due, dot-com company folds.

MVP poured millions into a business model that emphasized development of awareness among consumers, resulting in heavy marketing expenses. Hence the partnership with three of the biggest names in sports - Elway from the NFL, Jordan from the NBA and Gretzky from the NHL. None of the three athletes responded to interview requests for this story.

Each was due to receive undisclosed compensation for his involvement in the branding efforts. But it was Elway who accepted the role as co-chairman after insisting upon an active part in the company.

At an August 1999, news conference in New York, Elway revealed he had invested a "seven-figure" amount. A sizable chunk of MVP's cash went toward a contract with CBS SportsLine that called for MVP to pay $120 million for the rights to link to SportsLine's Web site. MVP also purchased Boulder, Colo.-based PlanetOutdoors, which sold camping goods and recreational equipment online.

But when an installment on the SportsLine contract came due in October, and no venture capitalists took any interest in the company, MVP's days were numbered. Contrary to the fanfare that accompanied the formation of the company with the Elway-Jordan-Gretzky connection, MVP became silent and almost uncommunicative, even with its customers.

Customers complained MVP wasn't answering its phones and couldn't answer questions about the whereabouts of merchandise or refunds.

Buckley said the company actually hung up on her before she could begin speaking. She had purchased the treadmill, found it was defective and sent it back at a shipping cost of $175. As it turned out, that was her entire expense, if you don't count the long distance phone calls and the stress associated with the episode. Her credit card company credited her account for the $809 treadmill.

All the customers with grievances against MVP and contacted by the Rocky Mountain News said they had resolved their complaints in the same manner - by protesting to their credit card companies after the company itself offered no help.

MVP filed for protection called "assignment for the benefit of creditors." It's a sort of state-level bankruptcy proceeding in which the troubled company assigns its property to a trustee, who then distributes the proceeds of any sale to the creditors. In the case of MVP.com, most of the assets were already in cash.

John Wheeler, the Chicago-based assignee in the MVP case, said that of the 1,800 creditors with whom he is dealing, representing $14 million to $18 million in claims, "very few" are consumers, he said.

SportsLine has since taken over MVP in partnership with USA Networks Inc., and the partners assigned the operations of the Web site to a division of USA Networks called Electronic Commerce Solutions. That chain of transfers might create the impression that MVP is completely revamped, but that's not actually the case. ECS has hired a company called StyleClick to help with the technical aspects of the Web site, and StyleClick has a new division called StyleClick Chicago - run by the same group of people who ran MVP.com, said one former MVP worker.

Bonnie Poindexter, a spokeswoman for StyleClick, said the company did not want to comment on the status of the Web site or list the former MVP workers who are back in business.

The three athletes who gave MVP such prominence are almost entirely absent from the revised Web site. None of the three athletes' images are on the site. Gretzky's name doesn't even appear in the NHL section. But Jordan and Elway both had previous relationships with SportsLine which will continue, said SportsLine spokesman Larry Wahl.