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Over
the years
George
Kirikos has uncovered
many significant previously
unreported domain sales while poring
over SEC filings. Today he
reported hitting the mother lode - a
sale that could end up being worth
an astounding $90 million -
when he came across details of a
deal involving LasVegas.com
that was made a decade ago.
In
a public SEC
filing made by Remark
Media, who recently acquired Vegas.com
LLC, the company revealed
details of a 2005 purchase agreement
by Vegas.com LLC to acquire the
LasVegas.com domain name over a
period of 35 years extending
to 2040. It showed
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Financial
statement image from Bigstock
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Vegas.com
LLC paying $12 million up
front for the exclusive
right to begin using the
LasVegas.com domain, followed by a
series of escalating monthly
payments.
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For
the three years after the
agreement was signed,
Vegas.com paid approximately $83,000
a month. For the next five
years that rose to about $125,000,
then, in 2013, bumped up again
to approximately $208,000
a month for three years. So,
as of today Vegas.com has
already paid about $29
million for the domain.
When the current schedule of
$208,000 payments concludes June
30, 2016, Vegas.com has
the right to terminate
the agreement and give up
their right to complete the
purchase. If |
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they
want to stay the course, they
will continue paying
approximately $208,000 a month
until June 30, 2040
when the domain would finally
be transferred to them. |
Given
how much has been paid to date - and
on how much more will likely be paid
in the years ahead, this deal dwarfs
anything we have seen to date that
didn't include a fully developed
business with a multi-million dollar
annual revenue stream. It's
not a transaction we can put on our sales
charts because we only
list domains that have been fully
paid for and transferred to their
new owners (a step that is still 25
years away for this one) - but this
is still a landmark transaction
no matter how you slice
it.
As
regular readers know, we also list
sales of domain names only as those
involving developed website
businesses often involve additional
assets and revenue streams well
beyond the value of the domain
alone. At the time the LasVegas.com
agreement was made, the domain did
have a relatively pedestrian
website on it that produced some
revenue but it is pretty obvious in
this case (especially since the
website was completely redeveloped
for its current use by the Las
Vegas Convention and Visitors
Authority) that the long term
value of the domain itself was
the only reason Vegas.com made such
a massive commitment.
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The
bottom line is that it is a
remarkable deal that
shows just how valuable a
great domain name can be to
the right party. When some
of the industry's early pioneers
predicted eight or even nine
figure domain sales years
ago most people - even
within the industry - viewed
that as "pie in the
sky." Details of this
deal shows the pie is
actually right there on
the dinner table. Seems
especially fitting this news
broke just in time for
Thanksgiving! |
Cherry
pie image from
Bigstock |
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