Score Media sees revenue up, profit down at Q1
The sports media co posts record revenue in its digital division, but corresponding investment in growth and expansion affect its bottom line.
Higher digital build-out costs added up to sharply lower first quarter earnings at Score Media.
The sports broadcaster revealed Monday that it posted a $212,000 profit for the three months to Nov. 30, compared to earnings of $856,000 for the first quarter of 2010.
The profit slip came despite Score Media recording Q1 revenue up 14% to $13.4 million, with broadcast revenue jumping 14%, or $1.5 million, to $12.4 million.
For the first time, the sportscaster broke out its digital revenue, which rose 10% to $1 million as Score Media continues to add to its digital portfolio with recent acquisitions like the American multi-sport app SportsTap.
SportsTap is the American equivalent of ScoreMobile, the dominant Canadian mobile web portal for sport results and commentary.
Score Media pointed to its first quarter as traditionally its weakest frame for earnings, given the annual schedule of telecasts for major pro sports.
But building out Score Media’s digital presence for increased mobile traffic – which includes higher personnel and technology costs and a new digital media sales office in New York City – comes at a cost.
“We plan to continue to strategically invest in our digital media business to capitalize on the strong position we have established in the mobile sports market, while continuing to grow our broadcast business,” Score Media CEO John Levy said Monday in a statement, ahead of an annual shareholders meeting in Toronto.
Levy was in a jovial mood at the AGM, pointing out the digital division’s million-dollar quarter was a milestone for the company and dropping a catchphrase – “The S invades the US” – in providing overview of the company’s ongoing US expansion plans, which include moving from ad-network sales to an increased focus on direct sales.
He also emphasized the company’s focus on complementary original content as key to both its broadcast and digital strategies. The company has found success with sport-specific original content such as NBA-focused The Basketball Jones and Court Surfing, and Levy said he sees a similar strategy as being critical to success in mobile broadcasting.
The one thing Levy kept tight-lipped on, however, were answers to questions about the possible sale of Score Media raised last fall. “We don’t comment on that,” was his only reply, despite repeated attempts for elaboration by the audience. The Globe and Mail last September pegged the possible sale price of the company at $200 million.
With files from Katie Bailey
From Playback Daily