CBS has increased its ownership stake in FL-based
SportsLine USA while extending its marketing pact an
additional five years, according to Richard Katz of DAILY
VARIETY. The initial agreement between the two companies in
'97 called for CBS to receive a 12% equity stake in
SportsLine in return for $60M of on-air promotion for the
site. CBS also received warrants to purchase additional
stock of SportsLine, up to 17% during the five year deal.
The new deal extends the agreement to 2006 and increases
CBS's stake in SportsLine to 18%. Based on SportsLine's
stock price, CBS could raise its ownership stake as high as
27%. In return for the stock increase, CBS agrees to "ante
up" $100M in promotional time (DAILY VARIETY, 2/12). The
deal increases CBS's total stake in SportsLine from 1.1
million shares to 3.5 million. News of the deal sent shares
in SportsLine up 15% yesterday, to close at $5.25, valuing
CBS's stake increase at $44.1M. CBS also will receive $20M
a year in SportsLine stock during each year of the agreement
(WALL STREET JOURNAL, 2/12). CBS President Mel Karmazin:
"This marks another step in our strategy of leveraging our
brands to increase our position in new media" (REUTERS,
2/11). In N.Y., Jon Elsen notes that the deal makes it
"much easier" for CBS to eventually collect its Internet
holdings in one group and spin them off (N.Y. POST, 2/12).
SPORTSLINE SET TO PUNT ON NFL SHOW: SportsLine CEO Mike
Levy said it is "unclear" if SportsLine will produce its
syndicated NFL pregame TV show again next season. Levy: "It
was a nice show, but selling ads on the Internet is easier
than on TV" (HOLLYWOOD REPORTER, 2/12).
