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.
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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).
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