Sports Business: Web Sites
A Leg Up for CBS Sportsline?
The Viacom deal might link it to MTV, VH1, and Nickelodeon
Mike Levy was in London on the morning he learned that the tantalizing rumor was fact: Viacom Inc. was acquiring CBS Corp. for a heady $36 billion. Levy remembers pausing for a minute to ponder how his company, SportsLine USA, might make out as the two media giants combined--but only for a minute. "We just launched Rugby.com," explains the sports Web-site maestro, and he needed to stay focused.
As founder of one of the Net's most visited sports Web sites, with designs on a global sports-information empire, Levy has to care deeply about rugby. Even cricket. But in the weeks ahead, his eye on sports will also have to be peeled for any changes afoot at CBS, which owns 20% of publicly traded SportsLine.
Since the launch of SportsLine four years ago, Levy, 52, has been out to topple the king of the sports Web sites: brand dynamo ESPN.com. Ask him about the rivalry, and Levy becomes General Patton. "We come in here every day to beat ESPN and beat them badly," he says.
To do so, he joined forces with CBS. The deal commits the network to relentless plugging of the Web site on its highly rated sports programs--and that has helped make SportsLine second to ESPN.com in the crowded online-sports category. Now, the Viacom deal has the potential of lifting SportsLine even higher, Web experts agree. But to the summit?
"SportsLine very quickly has proven the value of TV promotion in building a Web media business," says Patrick Keane, who tracks sports Web sites for Jupiter Communications. But staid CBS--"the TV network of the nearly dead," notes Keane--has delivered a certain kind of audience for SportsLine. Its visitors are slightly older and less affluent than ESPN.com users, according to NetRatings Inc., which in its latest survey shows free-spending Gen Xers (ages 25 to 34) accounting for 34% of ESPN.com's audience, compared with 22% for SportsLine.
If the Viacom-CBS deal goes through, those numbers could change quickly, though. "If you can use [Viacom's] MTV, VH1, and Nickelodeon to drive traffic not just to CBS programs but to its Internet properties, that could be very powerful," says Keane."BETTER CHANCE." But who would be watching SportsLine promos that flash during, say, a Backstreet Boys music video? The young, sure, but maybe not young sports fans. "Those audiences are tuning in for music and for categories of entertainment totally unrelated to sports," says Steve Zales, senior vice-president of ESPN Internet Group. "That's the advantage we have. We're 100% targeted to a sports audience."
Levy says it's too soon to speculate about when--or if--SportsLine plugs would pop up on MTV or Nickelodeon. Even so, he sees advantages in the Viacom deal for SportsLine. "Right now, we sell most of our own advertising. As CBS sells advertising across all platforms, from network to cable to outdoors to radio to the Internet, we'll have a better chance of being included," he says.
It could be the next step in SportsLine's march into the top tier of Web portals. This year, it's one of the 50 most visited Internet sites, attracting 4.2 million sports fans in July. And that's peanuts compared with the traffic generated when CBS is televising one of its marquee events--the Masters or the college basketball playoffs. During the first two days of the NCAA tournament, it racked up 2.9 million visits.
Clearly, SportsLine and ESPN.com have lapped the field in the race to capture sports audiences on the Net, although others keep trying. Fox Sports, CNN and its partner Sports Illustrated (CNNSI.com), and The Sporting News have taken their brands to the Net, yet all struggle to attract sports fans. (In July, the three sites combined had fewer visitors than SportsLine.) Times Mirror Co., which owns The Sporting News magazine and Web site, is leaving the game. It put venerable TSN on the block this month, saying its Web site needed media exposure from a TV partner. There will be more startups, but they'll be in niche categories such as skiing, climbing, and extreme sports where "no one's going to build a big site," says Keane.
That leaves the two big guns, each with its own strategy for building audience--and neither forecasting profitability for several years. ESPN.com wraps itself in a brand that all sports fans know and that most like. Its site features commentaries from columnists such as baseball insider Peter Gammons and links to the official Web sites of the NFL and the NHL. "Growing up, ESPN was always the fixture, always the authority for me," says 30-year-old sports junkie Greg Garofolo of Boston, who can spend 30 hours a week on ESPN'S site.
SportsLine's approach is to offer more of everything--from fantasy games to global sports (SportsLine Europe was launched in May) to shopping. ESPN.com has a respectable e-commerce site, but nothing to compare with SportsLine's sports megamall. A spree here can range from a Hank Aaron autographed ball ($75) to a fully assembled treadmill ($599). SportsLine's e-commerce revenues are projected at $15.8 million this year, says analyst Rob Martin of investment bank Friedman, Billings, Ramsey & Co., up from just $3.6 million a year ago. Overall revenues also are heading north, to $58 million this year. All that's left is for SportsLine or ESPN.com to edge into the black. For SportsLine, the Viacom connection could be the push it needs.By Mark Hyman