SBJ/February 28 - March 6, 2011/Media

Online venture Open Sports closes shop

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Open Sports, the online sports startup created in 2008 by SportsLine.com founder Mike Levy, has ceased operations after failing to find a sustainable niche in the hypercompetitive digital arena.

The Florida-based operation, seeking to blend fantasy sports with sports news, commentary, social networking and other material, was founded largely in the hopes of challenging established market leaders such as ESPN.com, CBSSports.com and Yahoo!. A major fantasy games partnership struck with Fox Sports in 2009 sought to further that aim, with the two entities collaborating on a series of fantasy football and NASCAR products.

Levy
ALEX GORT SR. / GORT PRODUCTIONS
SportsLine.com founder Mike Levy created the Florida-based operation.
But Open Sports was never able to find institutional venture capital funding or enough advertising revenue to ensure long-term financial viability. Fox Sports ceased its partnership with Open Sports soon after the 2010 NFL season, and the company folded soon afterward.

Open Sports launched with $10 million in funding, all of it privately raised by Levy, with a secondary $4 million round raised in 2009. Levy then briefly funded the company personally early last year before a third and final batch of $3 million was raised, again privately and primarily from friends and business colleagues of Levy.

In particular, a suite of ultra-short-form fantasy football games launched last summer under the brand name Fantasy Live, some played in 20-minute increments during Sunday NFL games, failed to find a mass audience. The Fantasy Live games also proved quite expensive to create and support technically. The company created its own custom-built scoring and statistics system rather than hire an outside data vendor as is commonly done.

“It just didn’t work out. Not every one of these things do work out. It’s my blunder and I take full responsibility for everything,” Levy said. “I was never able to get professional, institutional venture funding. They didn’t think there was really room for another major player in fantasy, and that it was too late to really get traction in the space. And in retrospect, I probably should have listened.”

The shuttering of Open Sports cost about 40 people their jobs. Levy, who took SportsLine.com public in 1997 and was among the original trailblazers in online sports, said he is looking at other business opportunities but has made no firm plans regarding his future.

Fox Sports, which was a board member and equity holder in Open Sports, will look to WhatIfSports.com, the Cincinnati-based creator of online sports simulations and fantasy games it bought in 2005, as its engine for fantasy sports products. The first major new effort coming out under that realignment will be fantasy football games set to go to market this summer.

“We’re making a big investment going forward in WhatIf,” said Jeff Husvar, Fox Sports Interactive Media executive vice president and general manager. “They’re really becoming our interactive gaming division for all of Fox Sports.”

Husvar said the split with Levy and Open Sports was amicable, despite Fox’s mounting concerns toward the end of the NFL season regarding the company’s financial viability.

“There was a definite sense that it was simply the wrong time, wrong place,” Husvar said.

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