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.
