Score Media Inc. has been sold to Rogers Communications for $167-million, in a deal that will see the communications giant take control of the scrappy network’s television properties but give it only a small stake of The Score’s growing mobile apps business.
The Toronto-based sports network’s stock was halted halfway through the trading day Friday “pending news,” after increasing by 46 per cent on rumours that a deal was imminent. The company has been on the block for almost a year, as it struggled to outbid its larger rivals for increasingly expensive top-tier live events.
The two companies worked late into Friday night to hammer out the final details of the deal: Rogers will pay $1.62 a share, or $138-million for the television network. It will also assume about $13-million in debt and invest $12-million in The Score’s standalone digital media business.
While the television network has been the Score’s main money maker, its digital products have seen the greatest growth. They are among the most popular on the planet, ranking amongst products developed by giants such as ESPN for the most downloads on both iPhones and BlackBerrys.
Rogers won’t own the digital division, but said its 10 per cent stake would allow it full access to the platforms for use with its own brands.
Read the story in the Globe and Mail
Here are some of the transcripts from my interviews…
Score Media founder John Levy
Why do the deal now?
Obviously this is something that’s been contemplated for a period of time. As is often the case, it takes two to tango but it’s always been something I’ve been willing to entertain. But we obviously had to wait for the right deal to come along. Various people at various points in time including Rogers have shown interest.
It’s an opportunity to concentrate our efforts on something we’ve been growing for a number of years. It’s the right time for the TV network, it’s had an amazing run. Quite frankly, Rogers will grow and develop the network and I’m convinced it’s good for the employees who will have lots of opportunities there. They are so rich in sports assets and they have a deep commitment.
Could you compete with companies like Bell and Rogers?
The reality is we always competed alone in our space. Our licence is different, it’s for sports news and information. It skews younger. I think honestly that the edgy approach to the way we do sports is the reason got interested in the first place. Did we compete? Sure we did, but if you look at their programming versus ours (and I’ve said this a million times) we couldn’t put hockey on the network because that’s a whole different economic model.
So we found our own space, and that really ended up being our secret sauce. It’s hard to know what they’ll do with it, we get to keep the Score brand. But I do get the impression they will try and build on the type of atmosphere we’ve always had. They don’t want to drop that – nobody has been able to duplicate what we’ve done. Our employees often went to other networks, and they’d say it wasn’t the same.
What’s the new company look like?
The “new” Score is a 100% digital company that includes the score.com and mobile platforms. We can build it here, but also around the world. We’re like a startup, but we’ve been in the game for a couple of years so it’s a different ball game. We will look different – the company isn’t making any money. We’ll be well-funded, we’ll be lean and mean. There aren’t too many other start-ups that get started with 4 million established monthly users.
We keep our bloggers, which is cool. Some cross over but they’ll be a part of our online business. But the content we’ve been developing over the last year is mostly targeted outside of Canada – it’s North American.
It’s kind of tough to see employees go – some people have been with us since we started 15 years ago. It was like this when I sold the cable business to Cogeco and started the television thing, now we’re turning the television child over to Rogers. But the new business is very exciting for us –lots of similarities to when we started the Score. You know, like not making any money. But we’re building. We’re having fun building stuff. It’s a rush to build these new properties. Working with all these young people keeps me young.
Rogers Media president Keith Pelley
Why do this deal now?
I don’t know, if I could have done it a year ago I guess I would have. We’ve been looking at The Score for close to the two years I’ve been at Rogers Media. Lots of times things just change and fall into place. I looked a long time – it’s a strategic fit and complementary. I don’t think there was any special timing, it just happened opportunistically. Their desire to take their digital assets to the U.S. may have expedited things. What we get with The Score is a service that is almost exclusively about sports news and information and has loyal fans in a younger demographic. Sports is obviously something that is very important to us here, and this is very complementary to our other offerings.
There were rumours for weeks that it was close.
We’ve been in pretty significant negotiations for the last four weeks, and once that happens a lot of people are brought into the mix. That always means there’s more risk of a leak, but for the four or five months before that there would have been less than five or six people aware.
Why do you want The Score?
The thing with the Score is it’s a premium niche content service focused on headline sports news and information. There’s a limited amount of living programming they can air. For the next month or so we’re just focused on regulatory approval, and we’re only just bringing in the people who weren’t in the know like programming people who will be involved in all facets of the programming and they’ll put together our strategy. A lot of those questions will be answered in the coming months.
What about the current programming? Wrestling fans will lose mind if you take away WWE.
Quite honestly wrestling content is a really important part of what the Score is all about. They can rest easy.
Are you worried about the CRTC?
Sports is already highly competitive genre of programming and at this deal at its core offers niche content. I believe in the merit of the acquisition and that it will benefit sports fans.
What about the idea that consolidation is ruining everything for media diversity and will lead to less critical coverage?
I think in terms of journalistic integrity consumers I don’t think you have to worry about that with Rogers. I think this deal is beneficial to consumers because it allows us to really provide some more resources to a service that is strong but niche in its strategy.We own the Blue Jays and if you listen to Zaun of late you’ll know it’s maintaind. I think the best way to have that conversation is to give tangible examples.
You are taking 10 per cent of the new Score, which is a digital app company. Why not all?
It has obviously done a good job with the digital assets and they definitely have an aggressive plan we hope to reap benefits from and thier their plan is international. We’re content to secure access to their mobile apps, because it will be great for Sportsnet.
So you make a small investment in the cow and then get the milk for free from then on?
I’ll leave that for you to say.
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