Internet

SportsLine to report record revenues

A 90 percent year-over-year increase comes with the help of strong holiday e-commerce sales, the NBA lockout notwithstanding.

SportsLine USA said it would report record revenue for 1998's fourth quarter, in part because of strong holiday e-commerce sales and notwithstanding the effects of the NBA lockout.

The company, based in Fort Lauderdale, Florida, and best known as the publisher of CBS SportsLine, expects to post quarterly revenue of $9.3 million, a 90 percent year-over-year increase. Based on that figure, SportsLine will likely lose 52 cents per share, according to Wall Street analyst estimates at First Call.

E-commerce revenue will reach $1.4 million, a 250 percent jump compared to the year-ago quarter, while advertising revenue will increase some 88 percent to $4.9 million, the company said in a pre-earnings statement.

Further gains were probably torpedoed by the pro basketball season's four-month suspension, which minimized traffic growth. SportsLine turned an unaudited 5.2 million pages per day, 88 percent better than 1997's fourth quarter but even with 1998's action-packed third quarter.

Like archrival ESPN.com, SportsLine made e-commerce a major focus over the last three months. In November the company formally launched its Sports Store, which features professional and major college logo gear and memorabilia. Previously these were company marketed through CBS SportsLine.

About half of SportsLine's e-commerce revenues come from licensed products and memorabilia, according to Andrew Sturner, the company's senior vice president of business development. Its International Golf Outlet subsidiary makes up the other half.

Most Sports Store sales are "in-context sales," Sturner says, impulse sales of Tennessee Volunteers championship caps, for example, after fans read about the team's national title win. But as the site takes on its own identity, Sturner hopes it will become a shopping destination in its own right.

"When consumers start to think about Sports Store as a shopping destination, that's when we'll get into footwear and sports equipment," he says.

A content deal signed with Excite in October and the extension of an existing relationship with America Online that same month will be important to driving traffic to Sports Store, Sturner predicts.

But the company is moving aggressively. Earlier this week, SportsLine announced a co-branding agreement with popular online bookseller Amazon.com, as well as a fantasy soccer league operated in conjunction with the well-known Soccernet, a SportsLine-branded site. Around the time of last summer's World Cup, the latter helped SportsLine generate some $1 million in ad revenues and $150,000 in e-commerce, Sturner said.

Also last quarter, CBS exercised warrants to buy 380,000 common SportsLine USA shares for $5.7 million, or $15 per share, boosting the network's stake to 10.4 percent. SportsLine ceased operating as Web developer for nflplayers.com but is maintaining its three-year relationship, Sturner said. The move isn't expected to affect SportsLine's financial performance until present quarter results come in.

After advertising and e-commerce, the balance of SportsLine's revenue came from premium services and content licensing, the company said. SportsLine expects to report in the last week of January.

SportsLine closed 42 percent higher today, finishing at 28. Its stock touched a 52-week high of 39.6250 last April, and dipped at low as 6.375 in October.