The Sportsline mess has generated more media attention than it deserves, for the simple reason that people are watching how a big conglomerate like Viacom will handle this situation. On one hand, it will be inheriting what will be a majority stake in the online sports company, and on the other hand, it has no idea what to do with it. Viacom certainly doesn’t want to take on the liabilities the company has and integrate it within its own balance sheet…
I’ve been talking to some industry people, some supposed prospective buyers, and some people familiar with Viacom’s internet strategy, over the last week, and no one seems to know the answer. Neither does anyone at Sportsline or Viacom, for that matter. No digital sports company is interested in buying on Sportsline…
Someone in the industry I spoke to said that the only reason why Sportsline hired an investment bank to explore strategic options is to pressure Viacom into taking some action…
One potential acquirer I spoke to said that for them to be interested, someone needs to strip down Sportline’s assets, clear up its balance sheet (with that SEC overhang getting people nervous), and then sell the fantasy sports part of the company.
One thing is a fact: there’s no love between Viacom and Sportsline…there’re some rumors that the only reason why Viacom is letting the mess drag on is because Mel Karmazin doesn’t want to do anything that could lead to personal fortune for Sportsline president Michael Levy. Karmazin believes that the mismanagement of the company has led to where it is…
To sum up, I’ll quote from someone at a rival digital company (and I couldn’t really come up with anything, much like the parties involved): “Sportsline is a tough proposition– who will buy this bloated organization if it is not connected to a TV network? AOL, MSN, Yahoo don’t really need it. They’ve all either partnered or built it. AOL may be the most willing (though not able). Yahoo doesn’t need anything there…the Yahoo fantasy product is solid and Yahoo is so delusional that they think Yahoo Sports is a more powerful brand than CBS….The only thing worth a damn for anyone is the fantasy service. Anyone who buys Sportsline is buying them for fantasy…everything else is just commodity
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