June 21, 1999 8:00 PM PDT
Multimedia company buys the Auction Channel
Brilliant Digital will pay about $7.3 million in common shares and warrants for Trojan Television, according to Brilliant Digital president Kevin Bermeister, and the acquired company will become a subsidiary. But Trojan's management team will stay in place and will remain based in the United Kingdom, he said, and Brilliant will hire an executive team to work for Trojan and The Auction Channel in the United States.
The Auction Channel will offer a full schedule of television programming in the United States within three to six months, Bermeister said. The company is in negotiations with three cable networks to broadcast on their stations.
The Auction Channel has worked with major houses such as Christie's to broadcast auctions via satellite, cable TV, and over the Internet. The company also allows viewers to bid on live auctions over the phone or online.
Brilliant Digital is a multimedia content and tools developer. Although Brilliant's work to date has been with 3D animations of Superman and Xena, Bermeister said his company and The Auction Channel both have focused on the convergence of television and computers.
"It seemed like a natural fit for us," Bermeister said.
Brilliant Digital will face some stiff competition both in providing live broadcasts of auctions and in marrying online and offline auctions. Both Yahoo and Amazon.com, with their recent acquisitions of Broadcast.com and LiveBid, respectively, have the ability to broadcast live auctions. And both Amazon and online auction leader eBay have hooked up with offline auction houses in recent months.
But it's precisely the latter deals, with Sotheby's and Butterfield & Butterfield, respectively, that provide an opportunity to The Auction Channel, Bermeister said. Because of the fierce competition in the auction industry, other offline auction houses are unlikely to link up with eBay or Amazon. Instead, the other houses will turn to a more neutral player like The Auction Channel, which already has a "deep base of support in the auction industry," Bermeister said.
Still, he added, "We're fully aware of the competition and the size of the market."