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Published in Economic Development
Grand Rapids-based VNN Inc. will continue to provide high school athletic departments with turnkey digital solutions like the VNN SportsHub and Pressbox reporter, but will now do so under the name rSchoolToday after merging with the Florida-based tech company. Grand Rapids-based VNN Inc. will continue to provide high school athletic departments with turnkey digital solutions like the VNN SportsHub and Pressbox reporter, but will now do so under the name rSchoolToday after merging with the Florida-based tech company. COURTESY IMAGE

VNN merger positions firm as consolidator in fragmented high school athletic services sector

BY Sunday, March 13, 2022 06:17pm

When Rick Ehrman took the helm of VNN Inc. at the beginning of 2019, he made known his intentions to grow the business through mergers and acquisitions.

The Grand Rapids-based provider of digital tools and media solutions for high school athletic programs has closed on a few smaller acquisitions over that time, but its most recent deal is poised to be a game-changer.

VNN, which simplifies the process of creating and updating both team and athletic program websites, completed a cashless merger with a Florida-based tech company called rSchoolToday, a developer of back-office tools used for athletic program management.

The two firms merged in October 2021 but formally announced the deal earlier this month.

Both Ehrman and rSchoolToday’s Ray Dretske said the move signals a new era for the combined company, one that comes with a bevy of opportunities.

“We have been listening to the customers for a long time and they’ve been pounding the table for this,” Ehrman said of bringing the collective resources of both companies together. “We should have probably put these companies together about five years ago. We’ve worked together for eight or nine already.”

One-stop shop

With both companies merging under the rSchoolToday banner, they brought together rSchoolToday’s Cloud-based back office tools, integrating them with VNN’s front-facing products, including marquee software like SportsHub and Pressbox reporter.

Combining these two arsenals has created what Ehrman described as the first ERP system for athletic directors and school administrators, giving them the power to handle tasks that range from facilities management and online ticketing to live streaming of games and maintaining schedules in real time.

“From the beginning, rSchoolToday was primarily focused on being a tools company, although we have a lot of public-facing property that we really never took to the n-th level like (VNN) does,” said Dretske, who came into the deal as president and CEO of rSchoolToday. “This merger was the perfect opportunity to bring the best of breed in back-office tools to the best of breed in a college-level experience for a team site.”

All VNN investors remain involved with the new organization. VNN’s software products, including its marquee VNN SportsHub and Pressbox reporter, will be rebranded under rSchoolToday. The advertising sales and media side of the business will be branded as VNN Advertising Network.

The leadership team for the combined company is composed of executives from both businesses, including VNN’s Ehrman as CEO, Romy Glazer as chief marketing officer and John Stchur as CFO. The VNN executives will join rSchoolToday’s Dretske, who will serve as president, in addition to Chief Operating Officer Mark Kevitt and Chief Technology Officer Zudi Isowanto.

Combined, the company provides its technology to 40 percent of the high schools in the United States, lending out 8,500 licenses for its software and digital tools. The company also maintains 300 college clients. rSportsToday doesn’t currently target college athletic programs or organizations, but plans to make a push in the segment in the future.

Hungry for deals

VNN was hungry for deals on its own under Ehrman, who looked to make strategic acquisitions that either expanded the company’s presence geographically or brought additional revenue streams into the organization.

For instance, VNN acquired Provo, Utah-based online fundraising platform RallyAroundUs LLC in 2020, a year that it also scooped up Washington Prep Athletics Network and Wisconsin Sports Network, two media companies that covered local high school sports in their respective states.

The diversification of its revenue streams also paid off during the obstacles associated with the COVID-19 pandemic.

“We grew organically during the pandemic much differently than I thought we would,” Ehrman said. “Things like fundraising didn’t go very well but digital ticketing went great. Our advertising business was a little soft, at least on the local and regional side, but we were able to sell a lot more video subscriptions. So, just having the revenue diversification, it gives us a lot more levers to pull and you make a lot more mistakes.”

Now that the merger is complete, the new rSchoolToday is poised to continue consolidating the sector.

“It’s a really fragmented space we’re in,” Ehrman said. “There are a lot of small point solutions and companies that probably won’t have the ability to scale, so something like (the merger) needed to happen. As you can imagine, my phone rings all day long now. We probably have 17 companies that we’re going to take a pretty hard run at trying to acquire.”

Dretske said that rSchoolToday saw similar opportunities come along when his business was on its own, but the interest has exploded since the merger.

“It has really exploded now that the news is out about this,” he said. “It becomes one of those things that you can pick and choose who you want to work with because everyone is asking. … It wouldn’t surprise me to see other companies come aboard with us or that we acquire other companies over the next year.”

Grand Rapids roots

As VNN moves under the rSchoolToday brand, the company that made its start in Grand Rapids is now stretched across the country. Ehrman and a contingent of VNN staff work in an office in Minneapolis while sales teams zig-zag the United States.

However, despite the absence of a brick-and-mortar headquarters in Grand Rapids, Ehrman said he still considers it home and sees opportunity for the area as the company continues to grow.

“I think we’ll do a lot of hiring in Grand Rapids or the Michigan market,” Ehrman said. “Our networks are there, we’ve had a lot of success there. The families and institutions that funded this business from the beginning have a strong rolodex in that market.”

Founders Ryan Vaughn and Matt Anderson launched VNN in 2010, calling it Varsity News Network. The founders originally intended to establish the business as a media company to provide coverage of high school athletics, but over time, that vision shifted to a blogging platform and eventually additional digital tools. The duo refined the idea as they went through the Grand Rapids-based tech accelerator Momentum, which predated Start Garden.

As a startup, VNN successfully convinced groups such as Grand Angels, Wakestream Ventures LLC, Northern Michigan Angels, Muskegon Angels, Capital Community Angel Investors and the Michigan Angel Fund to invest in the model. 

Vaughn stepped away from the company in 2020 after Ehrman took the helm.

“The market was continuing to evolve and VNN continued to evolve with it,” said Mike Morin, an investment partner with the Grand Rapids-based Wakestream Ventures. “Its original incarnation was more customer-facing and more family-, parent- and athlete-facing. But over time they began to understand that there was a back-office component to it as well. Of course, we’ve been supportive the whole time. We’re investors — we don’t run the company. But we have had board roles and been active in the company all along and been supportive.”

Despite the company’s growth out of Grand Rapids, the Grand Rapids business community’s support remains important, Morin said.

“Obviously, we love when companies determine that Grand Rapids or West Michigan is the right place and want to grow there, but at the same time, we recognize that companies need to go where they need to go,” he said. “We don’t support artificial mechanisms that require a company or limit a company.” 

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