SBD/Issue 205/Sports Media

Open Sports To Build, Operate Fox Sports' Fantasy Offerings

Fox' Fantasy Games Will Be Promoted
During Tonight's MLB All-Star Game
Fox Sports has struck a multi-year partnership with Open Sports in which the Mike Levy-led online startup will build and operate the network’s fantasy games, beginning with a suite of fantasy football games that will be promoted during tonight’s MLB All-Star Game. The games, which will be sold and marketed by FoxSports.com, include a standard commissioner-style game that seeks to improve upon prior offerings from the company -- Fox Fantasy Live, a commissioner-style game that allows for real-time substitutions during the course of NFL games; and a shorter-form game called Fox Fantasy Quick Challenge that plays without a seasonal commitment. Each of the games will have extensive free-to-play options. The Open Sports deal will then expand into fantasy baseball for '10, with other sports scheduled to follow later next year. Financial terms were not disclosed, but the deal involves both a revenue-sharing component and an equity provision in which Fox Sports will eventually become a part-owner of Open Sports. "This is an important partnership for our business, as fantasy is a critical part of what we do,” said Fox Sports Interactive Senior VP/Operations Jeff Husvar. "We’re looking to make a very big statement to the marketplace." The new games will be promoted with a 20-second ad scheduled to run during tonight’s game, with a companion on-air mention and graphic display also possible. From there, promotion of the new games will involve Fox Sports Net regionals, Fox Sports Radio, and FoxSports.com itself. Husvar said he is also discussing with Fox Sports Chair & CEO David Hill how to integrate the expanded fantasy football presence into the network’s NFL studio programming this fall. The move comes as Fox, like other competitors, tries to break into the top three market positions of fantasy game operators typically occupied by Yahoo, ESPN and CBS Sports. “We may not make it into the top 3 in year 1 of this, but certainly expect to be there in a short period of time,” said Husvar, who reunites with former CBSSportsLine.com colleague Levy in the deal.

WEB SITE RESTRUCTURING KEY TO DEAL: Levy credited the recent restructuring of FoxSports.com in which the operation reports directly to the network’s broadcast sports component instead of Fox Interactive Media as a significant breakthrough to striking the deal. Levy: “That was big. And you look at all the assets they bring to bear between the national reach, the regionals, the Web site and so forth, I think we reach 100% of football fans in the country now. So that’s absolutely huge for us. We think we can do great things together.” Open Sports, meanwhile, is completing a $4M private placement that will add to a prior $10M round of venture capital used to start the company. The new money comes from the original Open Sports investors who were asked to re-invest at 40% of their prior commitment.

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