Item 1. Business.
Certain statements contained in this Annual Report on Form 10-K, including,
without limitation, statements containing the words "believes," "anticipates,"
"estimates," "expects," and words of similar import, constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Readers are referred to the "Risk Factors" section of the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained herein, which identifies important risk factors that could cause
actual results to differ materially from those contained in the forward looking
statements.
SportsLine.com, Inc. publishes one of the most comprehensive collections of
multimedia sports news and information available on the Internet and offers
consumers a broad assortment of merchandise and subscription and premium
services, including fantasy leagues and contests. We offer advertisers the
opportunity to reach our audience through marketing solutions that include
sponsorships, advertising and direct marketing services.
We have established a number of important strategic relationships to increase
awareness of the SportsLine.com brand, build traffic to our Web sites and
develop proprietary programming. Our most important strategic relationships are
with CBS Broadcasting Inc., the National Football League, the National
Collegiate Athletic Association, The PGA TOUR and Westwood One. See "- Strategic
Relationships" for a summary of each of these arrangements.
As used herein, "SportsLine.com," "we," "our," and similar terms include
SportsLine.com, Inc. and its subsidiaries, unless the context indicates
otherwise.
Sports Information, Programming and Distribution
SportsLine.com offers a broad range of sports-related information and
programming, which we deliver through our network of Web sites, wireless devices
and radio.
Information and Programming
News and Editorials Our news organization provides up-to-date general
sports news and information for all major professional
and college sports 24 hours a day, seven days a week,
including previews, game summaries, audio and video
clips and color photographs. We obtain this
information from strategic partners such as CBS and a
variety of leading sports news organizations such as
Associated Press and Getty Images. We also publish
exclusive editorials and analyses from our in-house
staff of writers and editors and freelance sports
journalists.
Scores and Statistics Our web sites offer continuously updated, real-time
scores, schedules, standings and player and team
statistics for all major professional and college
sports. We obtain this information from data providers
including Associated Press and Elias Sports Bureau as
well as from in-house staff updates.
Fantasy Leagues and Contests Fantasy league enthusiasts can utilize our services to
participate in leagues that we administer or to form
their own leagues with customized rules, live scoring
and reporting. We develop and maintain software to
handle player transactions (such as drafts, trades,
starting lineup selection and disabled list and minor
league moves) and provide summaries of scoring,
standings and roster transactions. We offer contests
with cash prizes, limited edition sports memorabilia
and other awards based on the results of weekly,
season-long or special event related games of skill.
We also conduct regular sweepstakes and "giveaways"
feature cash prizes, sports memorabilia, event tickets
and other merchandise.
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Local and Personalized Content We package our information and programming to enable
users to follow local or regional team and event
coverage, including weekly stories from college sports
publications and team coverage from staff writers
strategically located in cities across the nation.
Audio Our radio studio produces live sports updates for the
Westwood One Radio Network and tapes and edits audio
for streaming throughout the CBS SportsLine Web site,
including interviews with superstars, notable sports
personalities and regular commentary from leading
sports analysts. We also produce and distribute audio
clips of interviews, press conferences and other audio
surrounding major sporting events from various sources,
including Associated Press and CBS Newspath.
Video Our web sites deliver video programming surrounding
major sports events and daily video clips covering
major events such as the Super Bowl and the NCAA
Division I Men's Basketball Championship. We also
distribute video highlights from the NFL, the PGA TOUR,
CBS Sports and other sources.
Web Sites
CBS Sportsline.com, our flagship Web site, features comprehensive, in-depth
coverage of all major professional and college sports on a domestic and
international basis. The CBS SportsLine.com Web site offers fantasy sports
products for all major sports including NFL, MLB, NBA, NHL, PGA Tour and NASCAR.
NFL.com, which we produce in association with the NFL and in partnership with
AOL and CBS, is the league's official Web site and the anchor of the NFL
Internet Network, which includes NFL.com, the 32 NFL team Web sites and other
related Web sites, including superbowl.com, playfootball.com and nfleurope.com.
The NFL.com site delivers complete coverage of the NFL and its players with
state-of-the-art technology, live scoring and play-by-play, audio and video
streaming from NFL Films and a fantasy football product suite. Additionally, the
site provides access to the teams and players with behind-the-scenes features,
news and analysis.
PGATOUR.com, which we produce in association with the PGA TOUR, is a
comprehensive golf site that offers the only full leaderboard real-time scoring
on the Internet from the PGA TOUR, CHAMPIONS TOUR and NATIONWIDE TOUR events.
The site also features news covering other golf organizations and international
tours. Additionally, the pgatour.com site focuses on recreational golf, travel
opportunities and golf instruction and features a variety of interactive tools
such as course guides and reviews. The site also contains exclusive features
such as Live@17, a video transmission of one hole of a PGA TOUR tournament; and
"TOURCast," which allows users to view specific details such as distance and
location of each shot of every golfer in a tournament. The pgatour.com site also
features the PGA TOUR SHOP, the official online pro shop of the PGA TOUR
offering a complete line of golf equipment, accessories, apparel and other
products, including PGA TOUR branded merchandise. The site also incorporates our
golfweb.com site, which provides golf-related content, interactive
entertainment, membership services, golf course discounts and merchandise.
NCAAsports.com, which we produce pursuant to a sublicense of rights from CBS, is
the official Web site of NCAA championship events. The NCAAsports.com site
features in-depth coverage of all championship events administered by the NCAA
and a vast array of year-round content including student-athlete features,
standings, stats, brackets, event results and on-site championship information,
including tickets, local events and activities.
MVP.com is a state-of-the-art comprehensive sports-oriented retail Web site that
offers consumers the opportunity to purchase thousands of licensed products,
memorabilia and sporting goods.
Wireless Distribution
Portions of our content are available to wireless users of digital cellular
phones, Web enabled cellular phones and personal digital assistant devices.
Users opt in for notifications to their device of NBA, NCAA basketball, NCAA
football, NFL, NHL, MLB, golf, auto racing and tennis scoring and headline
alerts. We also produce content specifically for Web enabled cellular phones and
PDAs, such as headlines, scores, injuries, transactions, standings and schedules
for the sports previously mentioned, as well as auto racing. We provide our
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fantasy users with the ability to receive various short message service
notifications on their wireless devices, such as player updates, a lineup
reminder, and various league transactions and to access live scoring, schedules,
and statistics via a WAP-enabled device.
Radio Programming
We had three radio programs in syndication as of December 31, 2003 in
partnership with Westwood One: "NFL Today," "NFL Sunday" and "Fantasy Football
Forecast." Each of these programs is broadcast in approximately 175 markets.
Strategic Relationships
We have established a number of strategic relationships to provide marketing,
e-commerce and cross-promotional opportunities, to increase consumer awareness
of our brands, to build traffic and/or to obtain exclusive sports content on our
Web sites. Our most important strategic relationships are the following:
CBS. We entered into a strategic alliance with CBS in March 1997 pursuant to
which our flagship Web site was renamed "CBS SportsLine.com." The term of our
agreement with CBS, as subsequently amended, runs through 2006. The agreement
provides for CBS SportsLine.com to receive extensive network television
advertising and on-air promotion, primarily during CBS television sports
broadcasts of events such as the NFL, the NCAA Division I Men's Basketball
Championship, NCAA Football, PGA TOUR events and U.S. Open tennis, as well as
certain other benefits. In addition, we are able to use certain CBS logos and
television-related sports content on CBS SportsLine.com and in connection with
the operation and promotion of that Web site. We seek to maximize our
advertising sales revenue through joint advertising sales efforts with CBS.
PGA TOUR. We entered into an exclusive agreement with the PGA TOUR in April 1999
to co-produce a comprehensive golf site providing real-time scoring, golf news
and information regarding recreational golf, travel opportunities and golf
instruction. We also pooled our resources with those of The PGA Tour to develop
sales and sponsorship opportunities and share revenues from the site. In October
2003, we entered into a new agreement that extends this relationship through
2007, although the PGA TOUR has a unilateral termination right at the end of
2006.
NFL. We entered a four-party, multi-year agreement in July 2001 with NFL
Enterprises, L.P., CBS and AOL encompassing a wide-range of initiatives,
including the production and hosting by us of NFL.com, the most popular sports
league Web site. We were given the designation of "official online sports
partner of the NFL" and the right to use official NFL marks and logos and other
league assets in our marketing efforts. Our CBS SportsLine.com site is
prominently promoted on the NFL Internet Network, and receives selected NFL
content for use on CBS SportsLine.com, including four video clips a week, an
audio game of the week, contests and sweepstakes.
We manage media sales and direct marketing services for NFL.com and related
sites. In addition to producing NFL.com, we also produce other NFL-related
sites, such as superbowl.com, playfootball.com, and nfleurope.com, as well as
the official fantasy football games for the sites. We also host and sell certain
NFL content, such as NFL Films video, within the team sites. SportsLine.com, the
NFL, CBS and AOL have also agreed to jointly explore a range of potential new
business ventures in technology-based media.
NCAA. We entered into an agreement in February 2003 with CBS whereby
SportsLine.com sublicensed the rights for the official NCAA Championship Web
site, in their entirety, through 2006. These rights include site production,
hosting and management of the sale of advertising for NCAAsports.com, and the
exclusive rights to provide Internet broadcasts of certain NCAA championships
including the Division I Men's Basketball Championship. CBS received the NCAA's
Internet rights, beginning in 2003, as part of its long-term arrangement with
the NCAA that includes coverage of the Division I Men's Basketball Championship
and approximately 65 other championships, as well as radio, corporate marketing,
licensing, publishing and special events rights.
GSI Commerce, Inc. We entered into an e-commerce relationship with GSI Commerce,
Inc. in July 2002 under which GSI was named the exclusive operator of our online
store, operated under the MVP.com brand name. Under the five-year agreement, GSI
manages certain components of the store, including customer service, order
processing and fulfillment. We oversee the merchandising and marketing of the
store.
Amazon.com. We announced a strategic alliance with Amazon.com in September 2003
pursuant to which we supply merchandise in the Amazon.com Sporting Goods store.
Among the product categories we supply for the
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Amazon.com Sporting Goods store are licensed merchandise, memorabilia, fitness,
tennis and outdoor. We also supply a variety of men's, women's and children's
apparel for both the Sporting Goods store and Amazon.com's Apparel and
Accessories store.
Westwood One. We entered into a three-year agreement with Westwood One in August
1999. Under this agreement, we produce sports content for Westwood One/CBS Radio
Sports' coverage of live sporting events. In addition, Westwood One syndicates
our radio programs ("NFL Today", "NFL Sunday" and "Fantasy Football Forecast").
In August 2002, we extended this agreement with Westwood One through July 2005.
Advertising and Marketing Services
We believe that the demographics of our audience are similar to the traditional
sports advertisers' target market. Based on our market research, users of
SportsLine.com's United States-targeted Web sites are predominantly male, 73% of
all users are between the ages of 25 to 54, 73% have attended college and 46%
have an annual income greater than $75,000.
A substantial portion of our revenue is generated from the sale of advertising
on our Web sites. We sell sponsorship opportunities that enable advertisers to
associate their corporate messages with our coverage of athletes and marquee
events (such as the Super Bowl, the NCAA Division I Men's Basketball
Championship, tennis and golf's major events, the NBA playoffs and the Stanley
Cup playoffs), our fantasy sports products, special features of our Web sites
(such as GameCenters and live scoring applications) and special promotions,
contests and events. We also sell "banner" advertisements that allow interested
readers to link directly to the advertisers' own Web sites or to promotional
sites we have created. SportsLine.com targets as advertisers on our Web sites
traditional sports advertisers, such as consumer product and service companies,
technology companies, sporting goods manufacturers and automobile companies.
Advertising revenue is generally derived from short-term advertising agreements
that combine sponsorship opportunities with the traditional Internet media-type
of advertising consisting of banner, pop-ups and superstitials advertising.
These agreements usually have estimates or guarantees regarding the numbers of
impressions that we will provide to our client. To enable advertisers to verify
the number of impressions received by their advertisements and monitor their
advertisements' effectiveness, we provide our advertisers with third-party audit
reports showing data on impressions received by their advertisements.
We have developed database marketing capabilities to offer our advertisers more
targeted means to reach sports fans. We developed our direct marketing database
using information we obtain from users of our web sites who register for fantasy
products, memberships, contests and other products and services. We had over 10
million registered users as of December 31, 2003. Current programs in place
include direct e-mail campaigns as well as cost-per-lead-generation campaigns
that are promoted on registration pages.
Our in-house sales staff develops and implements our advertising strategies,
including identifying strategic accounts and developing presentations and
promotional materials. We have sales personnel located in Fort Lauderdale, New
York, Chicago, San Francisco, Los Angeles, Atlanta and Detroit. We also
capitalize on our cross-marketing relationships with our strategic partners by
seeking sponsorships and advertisements from their sponsors. We coordinate our
advertising sales efforts for CBS SportsLine.com with CBS's television network
advertising sales personnel.
No customer accounted for more than 5% of our revenue during 2003. No customer
accounted for more than 9% of our revenue in 2002 or 2001.
Subscription and Premium Products
We offer fantasy sports products for all major sports including NFL, MLB, NBA,
NHL, PGA TOUR and NASCAR. These fantasy products allow members to form their own
team by assembling a group of athletes from a sport and following their
performance on a weekly or daily basis. Members' fantasy teams can then perform
in competitions we administer for cash or merchandise prizes, or compete in
leagues administered by the users themselves on our Web site.
We make our top-selling fantasy league management service available during the
NFL, MLB, NBA and NHL seasons. We charge leagues a fee for each sport in which
they participate. Single team purchases are also available, and we manage the
leagues. We selectively make available fantasy challenge games. These
competitions allow all participants to compete against the entire game
population for a grand prize.
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From July 2000 to July 2001, we offered our fantasy products and services for
free which allowed us to showcase our league management service to a broad
audience of fantasy players who had either only played free games before or had
never played in a fantasy game online. As a result of this strategy, we
attracted more than four million fantasy products customers in 2001. After July
2001, we converted our free fantasy products back to primarily pay services,
with select challenge and other games made available for free from time to time.
Our offerings include a league management service currently priced at $139.95 or
individual fantasy teams, placed in a league, ranging in price from $9.95 to
$249.95, based on prizes and type of game. During 2003, more than 100,000 paid
fantasy leagues representing about 1.1 million teams were formed in our
fee-based baseball, football, basketball and hockey fantasy games.
In late 2003, we launched a new subscription product named "VIP" which offers
exclusive access to news from sixty major newspapers, comprehensive game
previews, real time player news and injury reports and premier recruiting news.
We charge a fee for our VIP product of $49.95 for a year of service, $29.75 for
six months or $5.95 for one month.
Registered Users
We had over 10 million registered users as of December 31, 2003. In addition to
our subscription products, all of which require registration, we encourage users
of our Web sites to register by offering them the ability to customize our Web
site in two ways. On the CBS SportsLine.com Web site, registered users can enter
their favorite (and despised) teams and players along with their zip code. Given
these preferences, the Web site is tailored to highlight information specific to
the member's team and player preferences. The user's zip code is used to
translate all schedule information into their local time zone. Registered users
who desire more control over their CBS SportsLine.com experience can design
their own personal sports Web pages using "My SportsLine". This product allows
the user to manage the content, layout and page settings of the site. Both
customization offerings are intended to make the CBS SportsLine.com visitor
experience more efficient and effective. We also provide the opportunity for
registered users to participate in contests and sweepstakes in which the user
can win cash, trips or merchandise. In many cases, an advertiser sponsors these
contests and sweepstakes.
We have established an extensive database of registered users who exhibit
increased media consumption (visit frequency and page views) due to their
intense usage of our products and services. Our list of registered users is one
of our key assets in terms of both internal list marketing and external direct
marketing services.
Marketing
Our agreement with CBS provides for CBS SportsLine.com to receive extensive
network television advertising and on-air promotion, primarily during CBS
television broadcasts of sports events such as the NFL, the NCAA Division I
Men's Basketball Championship, NCAA Football, PGA TOUR events and U.S. Open
tennis. In addition, CBS provides on-air promotion for NCAAsports.com, which we
produce and has direct links to CBS SportsLine.com, during its telecasts of NCAA
championships. NFL.com, which we produce and has direct links to CBS
SportsLine.com, receives significant on-air promotion during all televised
broadcasts of NFL games, including broadcasts on ABC, ESPN and Fox. PGATOUR.com,
which we produce and has direct links to CBS SportsLine.com, receives
significant on-air promotion during all televised broadcasts of PGA TOUR events,
including broadcasts on ABC, NBC, ESPN, Fox SportsNet, USA Networks, TNT and the
Golf Channel. Our agreement with Westwood One Radio Network provides for CBS
SportsLine.com to receive extensive on-air promotion and live reads during radio
broadcasts of the NFL, NCAA Football, Notre Dame Football and HBO Boxing and
during other special events, such as the U.S. Open and Masters golf tournaments.
Another effective marketing outlet for us has been online advertising. From time
to time, we purchase advertising impressions on leading web sites. In addition,
we purchase paid listings on major search engines to promote our fantasy sports
products. We also advertise using direct e-mail, targeted print publications,
stadium signage, outdoor billboards, and sports talk radio.
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Competition
The market for our products and services and products is highly competitive. We
compete, directly and indirectly, for advertisers, viewers, subscribers, content
providers, merchandise sales and rights to sports events with the following
categories of companies: (1) Web sites targeted to sports enthusiasts generally
(such as espn.com, si.com, sports.yahoo.com and foxsports.com) or to enthusiasts
of particular sports (such as Web sites maintained by the NBA, MLB and the NHL);
(2) publishers and distributors of traditional off-line media (such as
television, radio and print), including those targeted to sports enthusiasts,
many of which have established or may establish Web sites; (3) general purpose
consumer online services such as AOL and MSN, each of which provides access to
sports-related content and services; (4) vendors of sports information,
merchandise, products and services distributed through other means, including
retail stores, mail, facsimile and private bulletin board services; and (5) Web
search and retrieval services, such as Google, Lycos, Netscape and Yahoo!, and
other high-traffic Web sites. We believe that our most significant competitors
are ESPN.com, Yahoo! Sports, AOL Sports, foxsports.com and si.com, all of which
offer a variety of sports content.
We believe that the principal competitive factors in attracting and retaining
users and subscribers are the depth, breadth and timeliness of content, the
ability to offer compelling and entertaining content and brand recognition.
Other important factors in attracting and retaining users include ease of use,
service quality and cost. We believe that the principal competitive factor in
attracting and retaining content providers and merchandisers is our ability to
offer sufficient incremental revenue from licensing fees, bounties and online
sales of product or services. We believe that the principal competitive factors
in attracting advertisers include the number of users and members of our Web
sites, the demographics of our user and subscriber bases, price and the creative
implementation of advertisement placements. We may be unable to compete
favorably with respect to these factors.
Government Regulation and Legal Uncertainties
Our Internet operations are not currently subject to direct regulation by any
government agency, other than regulations applicable to businesses generally.
The application of existing laws and regulations to SportsLine.com with respect
to issues such as the protection of databases, user privacy, defamation,
pricing, advertising, gambling, taxation, sweepstakes and contests, promotions,
content regulation, quality of products and services and intellectual property
ownership and infringement can be unclear. In addition, we may also be subject
to new laws and regulations directly applicable to our activities. Any existing
or new legislation applicable to us could expose us to substantial liability,
including significant expenses necessary to comply with such laws and
regulations, and dampen the growth in use of the Web.
Our contests and sweepstakes may be subject to state and Federal laws governing
lotteries and gambling. We seek to design our contests and sweepstakes to either
not be subject to or to fall within exemptions from such laws and we restrict
participation to individuals over 18 years of age who reside in jurisdictions
within the United States and Canada in which the contests and sweepstakes are
lawful. If our contests and sweepstakes are not exempt from such laws we may be
required to spend significant resources complying with these laws or we may be
unable to continue using the contests as a marketing tool.
Certain Federal laws could impact our business. The Digital Millennium Copyright
Act is intended to reduce the liability of online service providers for listing
or linking to third-party Web sites that include materials that infringe
copyrights or other rights of others. The Children's Online Protection Act and
the Children's Online Privacy Protection Act are intended to restrict the
distribution of certain materials deemed harmful to children and impose
additional restrictions on the ability of online services to collect user
information from minors. In addition, the Protection of Children From Sexual
Predators Act of 1998 requires online service providers to report evidence of
violations of Federal child pornography laws under certain circumstances. Such
legislation may impose significant additional costs on our business or subject
us to additional liabilities.
We post our privacy policy and practices concerning the use and disclosure of
user data on our Web sites. Any failure to comply with our posted privacy
policy, requirements of the Federal Trade Commission regarding user privacy, or
other privacy-related laws and regulations could result in proceedings by the
FTC or others which could potentially have an adverse effect on our business,
results of operations and financial condition. In this regard, the United States
Congress and state legislative bodies periodically consider legislation
regarding privacy issues that could affect our business. It is not possible to
predict whether or when such legislation may be adopted, and certain proposals,
if adopted, could significantly decrease our user registrations and revenues.
This could be caused by, among other possible provisions, the required use of
disclaimers or other requirements before users can utilize our services.
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Due to the global nature of the Internet, it is possible that the governments of
various states of the United States or foreign countries may attempt to regulate
our transmissions or to prosecute us for violations of their laws. We may
unintentionally violate these laws and these laws may be modified, or new laws
enacted, in the future. It is also possible that various states of the United
States or foreign countries may seek to impose sales taxes on out-of-state
businesses that engage in commerce over the Internet. In the event that states
or foreign countries succeed in imposing sales or other taxes on Internet
commerce, the growth of the use of the Internet for commerce could slow
substantially.
Intellectual Property
Our performance and ability to compete are dependent to a significant degree on
internally developed content and technology. We rely on a combination of
copyright and trademark laws, trade secret protection, confidentiality and
non-disclosure agreements with our employees and with third parties and
contractual provisions to establish and protect our proprietary rights. The
steps we take to protect our proprietary rights may not be adequate, we may not
be able to secure trademark registrations for all of our marks in the United
States and/or foreign countries, and third parties may infringe upon or
misappropriate our copyrights, trademarks, service marks and similar proprietary
rights. In addition, effective copyright and trademark protection may be
unenforceable or limited in certain foreign countries, and the global nature of
the Internet makes it impossible to control the ultimate destination of our
services. In the future, costly litigation may be necessary to enforce and
protect our trade secrets, copyrights and other intellectual property rights.
From time to time, third parties have asserted copyright or trademark
infringement claims against us or claims that our use of certain technologies
violates a patent. If it is determined that we have infringed upon a third
party's proprietary rights, we may be unable to obtain any necessary licenses or
rights on terms satisfactory to us, if at all. The inability to obtain any
required license on satisfactory terms could have a material adverse effect on
our business, results of operations and financial condition. We may also be
subject to litigation to defend against claims of infringement of the rights of
others or to determine the scope and validity of the intellectual property
rights of others. If our competitors prepare and file applications in the United
States that claim trademarks that we used or registered, we may oppose those
applications and have to participate in proceedings before the United States
Patent and Trademark Office to determine priority of rights to the trademark,
which could result in substantial costs to us, even if the eventual outcome is
favorable. An adverse outcome could require us to license disputed rights from
third parties or to cease using such trademarks. Any such litigation would be
costly and divert management's attention, either of which could have a material
adverse effect on our business, results of operations and financial condition.
Adverse determinations in such litigation could result in the loss of certain of
our proprietary rights, subject us to significant liabilities, require us to
seek licenses from third parties, or prevent us from selling our services, any
one of which could have a material adverse effect on our business, results of
operations and financial condition. In addition, inasmuch as we license a
substantial portion of our content from third parties, our exposure to copyright
infringement actions may increase because we must rely upon such third parties
for information as to the origin and ownership of such licensed content. We
attempt to obtain representations as to the origins and ownership of such
licensed content and generally obtain indemnification to cover any breach of any
such representations; however, these representations may not be accurate and the
indemnification may not provide adequate compensation for any breach of these
representations.
We have applied to register in the United States a number of marks, several of
which include the term "SportsLine." We filed applications to register
"SportsLine" marks in the United Kingdom, Canada and Mexico. We may not be able
to secure adequate protection for these trademarks in the United States or in
foreign countries. Many foreign countries have a "first-to-file" trademark
registration system; and thus we may be prevented from registering its marks in
certain countries if third parties have previously filed applications to
register or have registered the same or similar marks. It is possible that our
competitors or others will adopt product or service names similar to ours,
thereby impeding our ability to build brand identity and possibly leading to
customer confusion. Our inability to protect the "SportsLine" mark and other
marks adequately could have a material adverse effect on our business, results
of operations and financial condition.
SportsLine.com grants our users a license to use our service under an agreement
that prohibits the unauthorized reproduction or distribution of our licensed and
proprietary content. Despite our efforts to protect our proprietary rights,
unauthorized parties may attempt to copy aspects of our service or to obtain and
use information
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that we or our content providers regard as proprietary. The steps we take to
protect our proprietary rights may be inadequate and third parties may infringe
or misappropriate our copyrights, trademarks, service marks and similar
proprietary rights.
Employees
We employed 264 full-time employees at December 31, 2003, of whom 68 employees
were in editorial and operations, 61 were in technical and product development,
101 were in sales and marketing (including customer service), and 34 were in
finance and administration. None of our employees are represented by any
collective bargaining organization, and we consider our employee relations to be
good.
Infrastructure, Operations and Technology
We make our Web sites available with multiple servers using both the Red Hat
Linux and Solaris operating systems on Dell, Intel and Sun equipment. The
majority of our offerings were built using the Perl programming language and are
served with the Apache web server software.
We maintain the equipment used to service our Web sites with Savvis
Communications Corporation in their Miami, Florida datacenter facility. As of
March 8, 2004, Savvis acquired substantially all of the assets of Cable &
Wireless America; accordingly, all services formerly provided to us by CWA are
now provided by Savvis. The Miami data center maintains multiple redundant
Internet feeds on the CWA backbone and accommodates four to five times the
amount of bandwidth capabilities that we require. The Miami data center gets
power from two independent power grids and is located near Miami International
Airport, which is given higher priority for service restoration in the event of
a catastrophe. The data center is staffed twenty-four hours a day, every day,
with both operations and security personnel. We also maintain a disaster
recovery site with the Savvis data center in Sterling, Virginia.
Our offices and production/programming systems are located in Fort Lauderdale,
Florida. Our headquarter operations are dependent upon our ability to protect
systems against damage from fire, hurricanes, power loss, telecommunications
failure, break-ins, computer viruses and other events beyond our control. We
maintain access to and from the Internet through two third-party providers of
high-speed connections; one provides a capacity of 45 megabits per second, the
other provides 100 megabits per second capacity. These links are connected to
two redundant routers in our facility. Redundant cables from our building
connect with each local Internet provider's network. Our Internet connections
are designed to be fully redundant, so that if a failure in the network or
equipment of one service provider occurs, traffic is automatically routed
through to the other provider. All of our computer equipment is powered by an
uninterruptible power supply, which is backed up by a diesel generator designed
to provide power to the UPS within seconds of a power outage. In addition, all
of our production systems are copied to backup tapes each night and stored at a
third party, off-site storage facility. All of our computer equipment is insured
at replacement cost. We also maintain a private data circuit connecting our
headquarter facility to the Miami datacenter and use an encrypted virtual
private network over the Internet as a redundant backup to that circuit.
If, despite these and other precautions taken, our Internet access is disrupted,
and our third party providers are unable to handle higher volumes of users, or
such third party providers experience damage or failure that causes system
disruptions or other significant interruptions in our operations, our revenues
may significantly decrease.
Available Information
Our investor relations website is located at http://www.sportsline.com/info/ir/.
We make available free of charge on this Web site our annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all
amendments to those reports as soon as reasonably practicable after such
material is electronically filed with or furnished to the Securities and
Exchange Commission.
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