The folks at CBS SportsLine.com talk sports a lot. If they were looking for an analogy to describe their company, they might say it’s like a boxer who has absorbed round after round of body punches, but is still standing and just starting to get a second wind.
Media and entertainment giant Viacom Inc. revived SportsLine, a Fort Lauderdale-based sports Internet company, when it paid $49 million last year for the 62 percent of the company it didn’t already own. In doing so, Viacom saved SportsLine from — oddly enough — Viacom.
Before the deal was completed in December, SportsLine was consistently losing money, in part because it had agreed to pay Viacom $100 million over five years in exchange for advertising on CBS, which Viacom owns.
The obligations of being publicly traded, from the board meetings to the hand-holding of investors and analysts, had also become a burden. “It was more trouble than it was worth,” said General Manager Steve Snyder, a seven-year veteran of SportsLine who became its top executive in December.
SportsLine makes about two-thirds of its revenues from advertising and one-third from subscriptions to its fantasy leagues, in which participants try to predict how sports teams and players will perform.
Though its leagues are popular with Togel hari ini football fanatics, SportsLine’s stock hovered around $1 much of last year, a free fall from its high of more than $63 in late 1999. With just over 200 employees, SportsLine today barely resembles the high-flier that had about 500 workers in the late 1990s.
Now SportsLine operates as a minuscule spoke in Viacom’s enormous wheel, as part of the CBS Sports division, and is no longer publicly traded. With $50 million in annual revenues, it would take 450 SportsLines to make one Viacom.
But CBS sees SportsLine as a crucial part of its Internet strategy. Online advertising, which accounts for less than 4 percent of all U.S. ad spending, totaled about $10 billion last year, an increase of nearly 20 percent.
“It fits in with Viacom’s overall strategy to invest in areas of media that are growing — DVDs, home video, Internet,” said Robin Diedrich, a media analyst with investment bank Edward Jones & Co. in St. Louis.
CBS Sports President Sean McManus, in Fort Lauderdale last week to talk strategy with SportsLine executives, said he thinks online streaming video will become an increasingly important part of media, and he’s betting that SportsLine will provide that alternative to advertisers and sports fans. “High-quality broadband streaming video is the next big opportunity,” McManus said in an interview.
When the deal to take over Viacom was complete, Chairman, CEO and founder Mike Levy left SportsLine. Levy’s mercurial personality dominated the company and raised its profile. Though current executives respect Levy for building SportsLine from an idea in 1994, there is also a palpable sense of relief that he’s gone.
Levy’s fourth-floor office, with its 50-inch TV and mini-museum of sports memorabilia, is vacant. The floor has been cleared out and likely will be rented to another tenant. Snyder took a much smaller space a floor below.
During an interview last week, Snyder lifted his 6-foot-6 frame from his desk to analyze a series of charts that gives clues to SportsLine’s growth prospects.
Fantasy football is SportsLine’s best-selling product, and Snyder believes it still has room to grow. But he is optimistic he can exploit golf’s popularity and create money-making fantasy leagues for college football. “I don’t want to sound too trendy, but we could even do fantasy poker,” he said.
Being part of Viacom won’t guarantee success. SportsLine’s biggest challenge is chipping away at ESPN.com’s domination. With its 24/7 all-sports networks, ESPN, owned by The Walt Disney Co., can constantly promote ESPN.com and its fantasy leagues. SportsLine must settle for prominent but less frequent promos on CBS Sports telecasts.
“ESPN is the big horse in all this,” Snyder said. Yahoo Sports, Fox Sports, MSN and Sports Illustrated’s Web site are also tough competitors, he said.
It will be a long, tough fight. But SportsLine knows what that’s like.