A strong second quarter isn’t enough to prevent a dive in the shares of NeuLion (NeuLion Stock Quote, Chart, News: TSX:NLN) today after rumours surfaced about a partnership that may shut the company out.
12:04 PST Update. NeuLion has been halted, pending news…
Multiple reports have the NHL signing a $1.2-billion deal that will see Major League Baseball partnering with the National Hockey League on a digital streaming deal that will result in MLB taking control of the GameCenter Live product.
Yahoo Sports’s Chris Cwik says later today Major League Baseball will announce a wide ranging deal that will see the NHL get a chunk of cash and a seven to ten per cent interest in MLB Advanced Media.
NeuLion has provided the GameCenter Live product, which delivers live out of market hockey games on television and mobile devices, for several years.
But CBS Sports hockey writer Chris Peters says that while the current product has been improved it still suffers from “long delays and other general clunkiness” which has “frustrated users”.
In Toronto, shares of NeuLion are taking it on the chin, down 38.2% to $0.94 at press time. The company today reported second quarter results that saw its revenue rise 69%, year-over-year, to $22.7-million.
Founded in 2004, Neulion is based in Plainview, New York and has offices in Vancouver and Toronto. The company has partnered with the NHL, NBA, and NFL, as well as more minor organizations such as The Big Ten Network and the Ontario Hockey League.
Do not assume that NLN lost the NHL contract due to competitive reasons. I believe it was a mutual parting of the ways.
NLN’s business model is that of a technology and service provider. It is not involved in content. The NHL contract consisted of the NHL paying NLN to facilitate distribution of NHL content. NLN did not pay the NHL for anything. The NHL was responsible for the content and the marketing of that content to potential digital customers.
It appears that the NHL wants to make its digital model more like its other conventional distribution models. That is get someone to pay the NHL for the rights to distribute the content created by the NHL. This off-loads the cost and risk of marketing to potential digital customers to the rightsholder.
Since NLN is not in the business of buying content and marketing it at their cost and risk I believe NLN and the NHL had to end their business relationship. I prefer this. There are hundreds of other leagues around the world that NLN can sign up.
The stupid NHL switched mid-season and the update is garbage and tech support is form letters.
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