RealTime IT News

SportsLine: A Survivor

SportsLine was founded in the nascent days of the Web in 1994. What's more, the company is one of the oldest public Net companies. Its IPO was launched in April 1997. Priced at $8 per share, the company raised $28 million.

Early on SportsLine understood that in order to be successful in the online sports industry, you need to team-up with the brick-and-mortar world. That is why SportsLine got the financial and distribution backing of CBS. It was definitely a prescient move.

In the first quarter of 2000, SportsLine had $22.7 million in revenues, which was a 105% increase from the same period a year ago. Losses have been falling and gross margins increasing. In the past quarter, the gross margin was 62%, which compares to 51% in the same quarter in 1999.

According to Nielsen/NetRatings, SportsLine.com has more unique users than any other sports site. The site had 4.8 million unique home users and 3 million unique work users. As of April, the site is getting 15 million page views per day.

Most importantly, the company is not on the cash-flow deathbed. There is about $170 million in the bank account.

In fact, despite the market's distaste of advertising-led business models, SportsLine is not abandoning its advertising roots. But SportsLine has been innovative. For example, the company received $4 million in sponsorships for the NCAA Men's Basketball Championships.

If the business model strays from advertising, SportsLine seeks out partnership opportunities. This is why SportsLine signed a huge agreement with MVP.com, which will handle the US e-commerce business of SportsLine. Over the next 10 years, SportsLine will get a minimum of $120 million. SportsLine will also have a minority equity stake in MVP.com. MVP.com is a powerhouse e-commerce sports site. Backers include Benchmark Capital, John Elway, Michael Jordan and Wayne Gretzky.

SportsLine has also been savvy in expanding its service offerings. For example, the company has been developing international versions of its sites. There are also wireless versions, as well.

Of course, SportsLine has much competition. Then again, it has the backing of CBS. This helps explain why the company has had staying power and will continue to do so.