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SportsLine kicks off IPO

Underwriters price SportsLine USA at $8 per share and raise $28 million in the company's initial public offering.

    Underwriters priced SportsLine USA (SPLN) at $8 per share and then jumped into the public ring today, raising $28 million in the company's initial public offering.

    The launch fell below the target offering price of $9 to $11 per share, which would have generated as much as $38.5 million for the interactive sports media property based on the 3.5 million shares being offered.

    The stock gained 1-3/4 to end the day at 9-3/4 after opening at $8 per share. More than 1 million shares changed hands.

    SportsLine said that some big companies are snapping up SportsLine stock. Intel and Mitsubishi, for example, bought up 672,043 shares and 134,408 shares, respectively, at an offering price of $8 per share.

    That means the semiconductor giant coughed up $5.4 million, while the auto and electronics manufacturer invested $1.1 million in the Internet-based firm. However, Mitsubishi originally planned to invest $2.2 million. (Intel is an investor in CNET: The Computer Network.)

    After the public offering, the company will have 13.6 million shares outstanding, giving it a market capitalization of about $108.8 million, based on the offering price of $8 per share.

    SportsLine provides branded interactive information and programming, as well as merchandise, to sports enthusiasts worldwide. Its flagship Web site delivers interactive sports content and programming. Traffic on the site, according to the company, has increased to 2.3 million page views and 352,000 visits during September 1997. It said it has 45,700 paying members as of September 30.

    The company said in its filing that it is pursuing multiple revenue opportunities, including membership and premium service fees, third-party Web site development, content licensing, and radio syndication. Since March 31, 1996, a majority of the company's revenue has been derived from advertising. Although most of the content on its Web site is free, users can purchase memberships, for-pay content, and products such as memorabilia and licensed apparel.

    For the quarter ending in September, SportsLine recorded a net loss of $7.9 million, compared with a loss of $3.6 million for the same period a year earlier. Revenue grew to $3.1 million up from $638,000 generated in the same period a year earlier.

    This past March, the company entered into a five-year agreement with CBS in which it has the right to use certain CBS logos and some television-related sports content over the term of the agreement. It expects to receive at least $57 million in network television advertising and on-air promotions.

    CBS, in turn, has the right to receive 60 percent of SportsLine's advertising revenue sold on the Web site for pages related to certain "signature events," as well as 50 percent of the company's advertising revenue sold on pages containing other CBS-related sports content.

    SportsLine has recorded a noncash expense of $5.5 million for the nine months related to the CBS agreement ending in September; it also will record an additional $56.4 million of noncash expenses related to the CBS agreement over the remaining term, according to an SEC filing.

    The firm's underwriters include BancAmerica Robertson, Stephens & Company, Cowen & Company, and Nationsbanc Montgomery Securities.