Want CNET to notify you of price drops and the latest stories?

SportsLine turns focus to TV presence

The deal-making pace for the site has been brisk, as it tries to compete in a field where its principal rivals are part of established media companies.

3 min read
Like the industry it covers, SportsLine USA seems to be in constant motion, but some deals are more important others.

Yesterday the Fort Lauderdale, Florida, company announced that CBS had upped its stake in the five-year-old outfit, in exchange for $100 million worth of network promotion and increased offline marketing. CBS now owns 18 percent of SportsLine, whose best-known product is CBS SportsLine, and has an option to raise its interest to 27 percent.

On Monday, SportsLine said it had begun developing content for broadband delivery, striking an agreement with cable Net access provider RoadRunner. Late last month the company started providing content to Netscape's Netcenter portal, adding to similar agreements with Excite and online giant America Online.

Also in January, SportsLine rolled out a user rewards program meant to complement the November debut of its Sports Store e-commerce site.

The deal-making pace has been brisk as SportsLine tries to compete in a field where its principal rivals--ESPN.com, Fox Sports Online, and CNN/SI.com--are part of established media companies. That's why CBS's increased backing may be the key to its business plan.

Yesterday's news, which also extends SportsLine's tie with CBS from a five-year agreement ending in 2001 to a 10-year pact ending in 2006, didn't arrive a moment too soon, according to SportsLine chief executive Michael Levy.

"To be really successful in the field, you need a TV partner," he said in an interview. "We didn't want to wait too long to extend our agreement, which has been very successful."

Wall Street reacted favorably to the deal, sending the company's stock up 5 points yesterday and another 2.875 points in early trade today. Observers said the move was a natural for a company that seems diligent about covering its bases. In addition to e-commerce and content-sharing agreements, SportsLine relies on premium user subscription fees for revenues.

"All the networks want to get themselves positioned with companies like SportsLine," said Dantia Gould, editor of Gould Media, which operates several media industry publications.

"I'm not surprised at all," said Patrick Keane of Jupiter Communications, who noted that to date CBS hasn't made much of its association with the company as it could. "CBS has been a bit more aggressive about Marketwatch than SportsLine, and that's going to change," he said.

Promotional spots will begin almost immediately, Levy said, and rise to the fore during next month's highly popular NCAA Division I basketball tournament (better known as March Madness). Beyond CBS SportsLine-branded results displayed along the edges of the screen, CBS SportsLine will be featured in more 5-, 10-, and 15-second spots, Levy said.

SportsLine also is looking forward to the upcoming Daytona 500 NASCAR race and CBS Sports' golf lineup, which includes about 20 PGA tour events.

Offline, CBS Sports sales teams will more fully incorporate the Web site in sale presentations, as will CBS Plus teams. CBS Plus represents the network's range of media properties, including the network TV station, local affiliates, and radio.

It will be a "real concerted effort to work arm in arm on the sales side," said SportsLine's Andy Sturner, senior vice president of business development.

SportsLine isn't yet profitable, preferring to focus on developing its content plan and winning market share. The company reported fourth-quarter 1998 revenues of $9.3 million, 90 percent better than a year ago, and posted a net loss $10.2 million (or 51 cents per share), compared with a net loss of $10.1 million (77 cents per share) reported in the year-ago period.

The company aims to be profitable by "mid to late 2000," Levy said. "As advertisers start to come to the Net, we see the margins becoming very strong. It doesn't cost us much more for 50 million subscribers than 5 million."