For the love of the game

Karmazin increases CBS's SportsLine stake

By RICHARD KATZ

NEW YORK -- With his announcement Thursday that CBS will increase its investment in sports Web site CBS SportsLine, CBS prexy Mel Karmazin's interest in the Internet continues to grow.

The deal, announced by Karmazin and SportsLine USA prexy/CEO Michael Levy, is an extension of the equity-for-promotion exchange that formed CBS SportsLine.

In March 1997 CBS and SportsLine USA signed a five-year deal under which CBS received a 12% equity stake in CBS SportsLine USA in exchange for $60 million in on-air promotional time for the sports Web service. CBS also received warrants to purchase additional shares of Sports- Line common stock that could have expanded its stake in the company to 17% during the five-year deal.

Under the terms of the new agreement -- which will tack five years onto the initial deal -- CBS' stake in SportsLine will increase to 18% and, based on SportsLine USA's stock price, CBS' ownership could grow to more than 27%.

In exchange for the equity, CBS will ante up $100 million in promotional time through Dec. 31, 2006.

A first Web-footed step

SportsLine USA was CBS' first strategic new-media investment. The broadcaster has since invested in CBS.Marketwatch.com, and, more recently, the Eye web reached an agreement with America Online to become AOL's sole branded news provider.

SportsLine USA's stock price jumped 15.1% Thursday to close at $40.13. CBS was up 3.7% and closed at $36.75.

SportsLine USA was founded in 1994, and its flagship sports Web site was renamed CBS SportsLine in March 1997. (It is located at both www.sportsline.com and www.cbssportsline.com.)

In another CBS deal announced Thursday, radio division Infinity Broadcasting has reached an agreement in principle to purchase WRBQ-FM and WSJT-FM in Tampa, Fla., and WNCX-FM in Cleveland, Ohio, from Clear Channel Broadcasting for $125.5 million in cash. CBS owns 80% of Infinity.