leading broadcaster of live and on-demand sports and international
television over the Internet and NeuLion, Inc. ("NeuLion"), an end-to-end
IPTV service of live and on-demand sports, international and religious
programming over the Internet and through set top boxes, today announced
the companies have signed a binding letter of intent to merge (the
"Transaction"), creating a leading enterprise IPTV provider of online
sports, international and religious programming.
Under the terms of the Transaction, JumpTV will issue 49,521,958 common
shares, 1,840,097 contingent shares, which represents approximately the
entire issued and outstanding shares of JumpTV, and 5 million warrants
exercisable for two years at US$0.05 above the five-day weighted average
closing price prior to the execution of the Definitive Agreement, to the
securityholders of NeuLion, in exchange for their NeuLion securities.
JumpTV also intends to grant 2.7 million employee stock options, subject to
securities law and exchange rules compliance, exercisable at the five-day
weighted average closing price prior to closing, which is expected to be on
or before October 1, 2008.
Founded in 2004, NeuLion, a private corporation based in Plainview, New
York, provides web-based IPTV services to leading sports customers such as
the National Hockey League and the International Fight League. NeuLion also
delivers a Set Top Box IPTV solution to premier international customers
such as ABS-CBN (Philippines), KylinTV (China) and Globecast (France).
NeuLion recorded unaudited revenue for year ended December 31, 2007 of
US$7.8 million and a net loss of US$4.0 million inclusive of US$1.5 million
of non-cash minority interest losses.
NeuLion's financial information is unaudited; however, this financial
information will be audited in connection with the Transaction and included
in the Information Circular for the JumpTV shareholders. JumpTV has
engaged Oppenheimer & Co. Inc. as its financial advisor in connection with
the Transaction and JumpTV's Board of Directors has retained Canaccord
Adams to provide a fairness opinion which will be included within the
information circular in advance of the shareholder vote.
The Transaction is expected to be completed in the Fall of 2008, subject to
receipt of shareholder and customary regulatory approvals, as well as
satisfaction of other customary closing conditions. The merged company will
continue to be listed on the Toronto Stock Exchange ("TSX"). In accordance
with the rules of the AIM market of the London Stock Exchange ("AIM"), the
Company's shares have been suspended from trading on AIM until the
completion of the Transaction. At that time, the Company will either
reapply for admission for trading or will seek its shareholders' approval
for cancellation of the listing. The parties anticipate significant
operational and human resource synergies and expect an aggregate headcount
reduction of approximately 60 people by December 31, 2008.
The merged entity brings together two IPTV industry leaders to deliver a
multi-platform IPTV and set top box solution encompassing:
-- Sports: More than 200 partnerships with leading professional and
collegiate sports properties, including the National Hockey League (NHL),
more than 150 NCAA colleges and universities, the World Championship Sports
Network and the 2010 South American, African and Asian World Cup Qualifiers
-- International: More than 200 partnerships with premier international
networks and channels, such as KyLinTV, the first Internet television
service dedicated to the Chinese community living in North America, and ABS-
CBN, the number-one TV network in the Philippines
-- Multi-Platform: Live and on-demand video streaming over the Internet
including NeuLion's Set Top Box solution for streaming to television
-- Web Services: JumpTV's end-to-end "One Fan Profile" online customer
relationship management (CRM) solution which includes web hosting, video
streaming, ticket management and e-commerce
"The combination of our highly complementary technologies and depth of
expertise in the areas of sports and international IPTV delivery makes for
incredible synergy between the two companies," said G. Scott Paterson,
Executive Chairman, JumpTV. "This merger enables us to provide our partners
with a complete solution for streaming content live online across multiple
devices and viewing platforms."
"Consumers are becoming more reliant on broadband and Internet services for
their media experiences and this shift creates enormous opportunity for
content owners to reach untapped global audiences," said Nancy Li, Founder
and CEO of NeuLion. "NeuLion and JumpTV have committed to creating a
one-of-a-kind enterprise offering that manages the end-to-end delivery of
content through all broadband platforms: the PC, the TV, and an array of
Terms of the Agreement
The transaction is conditional on the companies entering into a definitive
agreement on or before June 25, 2008 (the "Definitive Agreement") and
shareholder approval at a meeting anticipated to be held on or about
October 1, 2008.
In connection with the merger, JumpTV has decided to retain certain assets
of its content delivery network (CDN) and international channels, which it
will leverage within the combined company structure and multi-platform IPTV
offering. JumpTV previously disclosed that it intended to divest its CDN
and international channels.
The merger brings together the largest online offering through the
following partnerships and properties:
-- National Hockey League
-- NCAA Division I schools and conferences
-- 2010 South American, African and Asian World Cup Qualifiers
-- World Championship Sports Network
-- International Fight League
-- World class pro-cycling events such as the Giro d'Italia, Tirreno-
Adriatico, Milan-San Remo, and the Vuelta a Espana
In March, 2008, comScore ranked JumpTV as the #1 most engaging website
among those in the sports video category with a recorded 40.4 minutes per
viewer per month in the U.S. Additionally, JumpTV viewers watched
approximately 20 million minutes of online sports video in the U.S. in
March ranking it as #4 in the Sports Video Sites category overall.
During the 2007-2008 National Hockey League season, NeuLion-delivered NHL
broadband service streamed over 1,700 NHL hockey games. In the two weeks
preceding the NHL Stanley Cup playoffs, the service reached over 10 million
In the past 12 months, JumpTV streamed more than 15,000 live sports events
online making it one of the largest broadcasters of professionally licensed
live sports programming over the Internet in the world.
The merged company will provide IPTV services including live and on-demand
video streaming for more than 200 international partners including:
-- KyLinTV (China)
-- ABS-CBN (Philippines)
-- Globecast (France)
-- Channel i (Bangladesh)
-- Canal 7 (Mexico)
-- America TV (Peru)
-- TV Chile (Chile)
-- MBC Broadcasting (Middle East)
KyLinTV, a 17% minority-owned subsidiary of NeuLion offers more than 40 of
the most popular Chinese broadcast TV channels and the largest selection of
Video-On-Demand (VOD), including more than 30,000 hours of programming.
The merged company will include NeuLion's partnership with Sky Angel, a
Christian family-friendly TV and radio network. Sky Angel's offering
includes approximately 50 television channels and over 20 faith-based radio
About the Merged Company
Charles Wang, the founder and former CEO of Computer Associates
International, Inc. (now CA, Inc.), owner of the New York Islanders and
husband of Nancy Li -- will become Chairman of the merged company. Mr.
Paterson, will be Executive Vice-Chairman and Ms. Li will become CEO and a
Director. Jordan Banks will continue to serve as CEO of JumpTV on an
interim basis. Nada Usina, current President of JumpTV, will continue as
President of the merged company.
Upon the execution of the Definitive Agreement, AvantaLion LLC, an entity
controlled by Mr. Wang, has irrevocably committed to subscribe for 10
million units from JumpTV's treasury at a price of $1.00 per unit. Each
unit (a "Unit") will consist of one (1) common share and one-half of one
common share purchase warrant exercisable at $1.25 and one-half of one
common share purchase warrant exercisable at $1.50. The warrants partially
comprising the Units will be exercisable for a period of two years from the
date of issuance.
G. Scott Paterson has also committed to buy 1 million Units on the same
terms. The aggregate gross proceeds from the sale of Units will be CDN$11
Closing of the proposed Unit offering is scheduled to occur on June 25,
2008. The proposed closing date of the Unit offering is reasonable and
necessary in the circumstances in order to facilitate the Transaction in
accordance with JumpTV's and NeuLion's proposed timing. Mr. Paterson's
subscription will constitute a related party transaction within the meaning
of applicable securities laws.
The common shares and warrants comprising the Units and the common shares
issuable upon exercise of the Units will be subject to resale restrictions
for a period of four months from the closing date under applicable
A shareholder conference call has been scheduled for Monday, June 9 at 4
p.m. Eastern Time, to discuss the transaction and the merged company.
To participate in the call, interested parties can use the following
US AND CANADA TOLL FREE: 1-866-225-0198
Please dial-in at least 5 minutes prior to the call.
Following the call, a digital replay will be posted (MP3 audio file format)
under the press release section of the JumpTV website at
JumpTV (www.jumptv.com), (TSX: JTV) (AIM: JTV), is a world leading
broadcaster of live and on-demand sports video over the Internet. In the
last twelve months, JumpTV streamed more than 15,000 live and exclusive
sporting events -- comprised of top college (NCAA), professional and
Hispanic sports coverage -- to millions of fans globally. JumpTV also
delivers a broad offering of internet services to its partners including
web hosting, live event video streaming, ticket management and e-commerce.
Through JumpTV's consumer websites: JumpTV.com, Cycling.TV and
SportsYa.com, as well as its collegiate and international sports partner
websites, JumpTV streams tens of thousands of hours of live and on-demand
events and international programming over the Internet each year.
JumpTV gives fans a lifeline to their favorite sports content when they
want it, how they want it, where they want it, wherever they are in the
Based in Plainview, NY, NeuLion works with content partners to develop
end-to-end solutions for multimedia IPTV services. The NeuLion iPTV
Platform encodes, delivers, stores and manages an unlimited range of
multimedia content, and the Operational Support System (OSS) maintains all
billing and customer support services. NeuLion content partners are
responsible for content aggregation and the sales and marketing for the
individual IPTV service.
Certain statements herein relating to JumpTV's plans to merge with NeuLion,
Inc. are forward-looking statements and represent JumpTV's current
intentions in respect of future activities. These statements, in addressing
future events and conditions, involve inherent risks and uncertainties.
Forward-looking statements can by identified by the use of the words
"will," "expect," "seek," "anticipate," "believe," "plan," "estimate,"
"expect," and "intend" and statements that an event or result "may,"
"will," "can," "should," "could," or "might" occur or be achieved and other
similar expressions. Forward-looking statements involve significant risk,
uncertainties and assumptions. Many factors could cause actual results,
performance or achievements to differ materially from the results discussed
or implied in the forward-looking statements. These factors should be
considered carefully and readers should not place undue reliance on the
forward-looking statements. Although the forward-looking statements
contained in this release are based upon what Management believes to be
reasonable assumptions, the Company cannot assure readers that actual
results will be consistent with these forward-looking statements. These
forward-looking statements are made as of the date of this release and the
Company assumes no obligation to update or revise them to reflect new
events or circumstances, except as required by law. Many factors could
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
that may be expressed or implied by such forward-looking statements,
including: general economic and market segment conditions, competitor
activity, product capability and acceptance, international risk and
currency exchange rates and technology changes. More specific risks include
that the merged entity will not be able to realize some or all of the
expected synergies due to incompatibilities in the merging businesses, the
inability of management to bring about such synergies or a changing
business environment rendering such synergies inadvisable or uneconomical.
After integrating the businesses the suite of service offerings may not
perform as expected if shifting demand moves in a direction away from the
expected business model of the merged entity, if competitors are able to
take market share away from the merged entity or if changing technology
adversely impacts the merged businesses. In addition, while the Company
expects its content partners and those of NeuLion to continue and expand
their relationship with the merged entity, there can be no assurance that
such relationships will continue as expected, or at all. More detailed
assessment of the risks that could cause actual results to materially
differ than current expectations is contained in the "Risk Assessment"
section of the Company's 2007 annual MD&A.
This news release does not constitute an offer to sell or a solicitation of
an offer to buy any of JumpTV's securities in the United States. The
securities have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold within the United States or
to U.S. Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such registration is