Big Entertainment Inc.
said
it signed an agreement in principle to sell one-third of its online Studio
Store to a group headed by Internet entrepreneur Eric Illowsky for $4 million
in cash plus 50% of a planned Direct Response TV Internet site.
In addition, Illowsky’s group was granted an option to acquire an additional
10% interest in Big’s e-commerce site for $10 million in cash, exercisable 18
months from the closing
of this transaction, or on the date of an initial public offering, whichever
comes first.
Illowsky is a former senior vice president of the Sci-Fi Channel, a national
cable TV network founded by Big’s Chairman Mitchell Rubenstein and its
President Laurie Silvers. Before that, Illowsky held a senior level position
in the cable TV division of Cox Communications.
In order to implement this transaction, Big said it plans to incorporate a new
wholly owned subsidiary of Big called E-Studiostore.com Inc., in which these
businesses will be contributed and from which equity to the Illowsky group
will be issued. Big will maintain control, although it is expected that
Illowsky will be appointed COO of such company and handle day-to-day
operations.
Big’s Internet Studio Store features entertainment merchandise from Hollywood studios, TV networks, and popular culture. The site is currently under construction.
Also under development is a Web site to offer virtually any item featured in a
Direct
Response Television (DRTV) advertisement for products sold on TV using an 800
number for viewers to call. This e-commerce site would complement the Studio
Store, utilizing the same Web design, inventory control, electronic data
exchange, and administrative infrastructure, the company stated.
Big also reported that second quarter 1998 revenues (for the period
through June 30th) increased by 34% to $2,558,290 from $1,910,730 a year
earlier. Big reported a loss of $.29 per share for the second quarter, “due
primarily to overhead and operating expenses associated with Big’s retail
kiosk business,” the company said.
Big Entertainment owns and licenses intellectual properties, owns and operates
entertainment retail outlets, and also owns an interest in mysterypages.com.
