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This article by Barbara Fox was prepared for the June 12, 2002 edition of U.S. 1 Newspaper. All rights reserved.

Life in the Fast Lane

Four years ago, the dotcom company JustBalls! was getting

loads of publicity and winning awards at venture fairs, and those

who sported the firm’s hats had to defend them from being snatched.

The founder, Jim Medalia, was comparing his online sports equipment

firm with the online bookseller Amazon.com (U.S. 1, August 12, 1998).

Then came the dotcom decline, and of all the online sporting goods

companies, JustBalls! was the only one to survive. Its business plan,

however, did not. Now the website is a shell of its former shelf,

Medalia and his wife have left and are starting a new energy-related

company, and JustBalls! is running in a new direction. CEO Jim Klein,

brought in by investors two years ago, has reorganized and renamed

the firm Integrated Sports Marketing Group (ISMG).

At the time Klein joined JustBalls! he said it had a real business

model — "strip away the hype and at the end of the day there

is a real business. I’m looking forward to helping this company achieve

entirely new levels of performance."

Now he says that "the economics of an Internet retailer doesn’t

make sense. It didn’t make sense three years ago, but the market bought

it. We raised $13 million two years ago, and we are still here."

JustBalls! had started out emphasizing institutional sales and then

moved into custom licensed sports-related products for colleges and

corporations. "That model had low volume, low margin, high overhead,

and high inventory," says Klein.

He says the reconstituted business will do premium and promotion marketing,

an area that has high volume, high margins, low overhead, and no inventory

— everything is drop-shipped to Fortune 500 companies.

For this new focus Klein leveraged contacts from his

former job as president of the consumer products group for Universal

Studios, where he was responsible for the $1.5 billion merchandising

campaign behind "The Lost World" A graduate of Rutgers, Class

of 1974, he has an MBA from Columbia, (U.S. 1, August 23, 2000).

ISMG will represent Universal Music Group for the development of CD

music compilations for premium purposes, and along with that it will

do cause marketing. Universal Music Group, Klein says, is the largest

of its peers, with "a portfolio of labels and songs second to

none." He will tap this music to compile CDs for corporate marketing

purposes. You’ve seen the CDs displayed at point-of-purchase in retail

stores. Like the perfume, buy the CD.

"What makes us unique is representation rights. We represent two

of the largest and most respected causes in the United States, Special

Olympics and Big Brothers/Big Sisters," says Klein. "We link

the CD to the charity with a donation mechanism. To encourage impulse

buying, the ideal cost for such an album is $9.99, but they can run

from $5 to $17.

JustBalls! started out with major funding from a prestigious VC, David

S. Wetherell, chairman and CEO of Massachusetts-based CMG Information

Services and holder of majority stakes in Lycos and GeoCities. In

March, 2001, JustBalls! announced $13 million in new funding, two-thirds

of its total investment, from such companies as Blue Rock Capital

of Wilmington, Zesiger Capital Group of New York, and JAFCO America

Ventures of Japan. It was the exclusive supplier of balls to the Special

Olympics. It had 30 employees.

Now ISMG has 10 people in 7,000 square feet at Canal Pointe. "It’s

been a wild ride," says Klein. "We are profitable this year

and we no longer have to raise any money."