JumpTV, NeuLion Merge, Sports To Be Major Content Focus

Digital technology companies JumpTV and NeuLion Inc. today will announce a merger of their companies, creating a formidable competitor in the currently fractured market for Internet design, hosting and management. The combined company, which will be known as JumpTV, controls and/or manages IPTV rights for the NHL, South American World Cup qualifiers, WCSN, Int'l Fight League, and more than 200 colleges. JumpTV Chair Scott Paterson described the deal as a "fifty-fifty merger." His Canadian company will give NeuLion a mixture of stock, stock options and warrants valued at roughly $75M. The transaction is expected to close in late September. "By us putting together technology on both ends of it, we feel we have a superior end-to-end offering," said NeuLion Chair and Islanders Owner Charles Wang.

SPORTS FOCUS: Online streaming video will remain a prominent strength of the combined company, but the union is designed to deepen existing ties in more than a dozen other business lines, including social networking, ticketing, e-commerce, donor management, and content for the set-top box and mobile platforms. Sports will be a major content focus for the enlarged JumpTV, joining ethnic-oriented material. “We think the combined capabilities of both outfits puts in a position that if you’re a sports property deepening your interactive profile, we’re now definitely going to be in the candidate set,” Paterson said.

Wang To Chair New JumpTV/NeuLion Venture

COMINGS & GOINGS: Wang will become Chair of the new company and his wife, Nancy Li, will become CEO. Paterson will become the Vice Chair and JumpTV President Nada Usina will retain her current title and position. Current JumpTV CEO Jordan Banks will leave the company. The merger comes less than a year after JumpTV acquired the broadband network business of XOS Technologies for more than $60M. JumpTV has since focused on expanding its sports portfolio since then by adding college sites and aligning formally with Olympic sports network WCSN (Fisher & Mickle, SportsBusiness Journal). 

MAKING AN INVESTMENT: Paterson is "putting [US$1M] into the company in exchange for one million units," while Wang is buying 10 million units for $10M (GLOBE & MAIL, 6/9).  Jump TV for the year ended December '07 showed a C$30.5M loss on revenue of C$8.9M. NeuLion in its most recent FY lost $4M on revenue of $7.8M (NEWSDAY, 6/9).