Takkle is a Brooklyn, NY-based social networking site for high school athletes that has attracted venture financing from Greycroft and received news coverage this week for a strategic partnership with Sports Illustrated - a big step forward for what looked like a flat startup in August. In short, SI is partnering with Takkle as a lead generation (and branding) tool for its “Faces in the Crowd” column. Clever.
But what really struck me about the partnership was Staci Kramer’s analysis of the deal. She writes the following:
Price [Jeff Price, President of SI Digital] said the revenue opportunity ‘comes from SI monetizing the Faces in the Crowd platform with 3rd party advertisers.’ Also, SI can earn warrants in Takkle based on traffic.
Warrants based on traffic? For the unitiated, warrants are essentially just the legal term for options in the hands of an entity rather than individual. There’s a technical difference in that warrants are “issued and guaranteed by the company” and options are merely an “exchange instrument” - see Investopedia’s take here if you’re interested). Both warrants and options can be tailored to trigger (or vest) based on certain conditions. There’s no reason such a condition couldn’t be traffic. It surprised me as unconventional but fits because traffic is exactly what Takkle needs right now. Looks like the partnership (or at least news thereof) is working:
And it makes sense to me that Time Warner Inc, SI’s owner, is interested in nabbing a piece of Takkle. After all, Time is a natural acquirer down the road and it’s smart (though debatable) for the two to get cozy early.
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