August 10, 2007 (Toronto, ON) – JumpTV Inc. (“JumpTV”) (AIM: JTV) (TSX: JTV), the world’s leading broadcaster of live television over the Internet, announced that it has agreed to acquire Cycling TV Ltd (“Cycling.tv” or the “Company”) (www.cycling.tv), based in London, England, for a total of Â£2.44 million (approx US$4.95 million), which includes Â£1.09 million (approx US$2.21 million) in cash payable on closing, and Â£1.34 million (approx US$2.74 million) in common stock, which will be issued on 28 September 2007. Application to the AIM Market of the London Stock Exchange will be made in due course. The transaction is expected to close this week.
The agreement also includes performance shares equal to Â£3.35 million (approx US$6.79 million) that may be earned based on pre-determined revenue targets. To earn all of the performance shares, revenue for the 24 month period ended July 31, 2009 would need to exceed Â£5.43 million (approx US$10.99 million).
The JumpTV share price used to calculate the number of shares to be issued in connection with this acquisition will be equal to the average closing price of the JumpTV common stock on the Toronto Stock Exchange in 2007 on each of June 29, July 31, August 31, and September 28.
Cycling.tv currently holds the internet broadcast rights to top-tier international cycling races including Vuelta a EspaÃ±a (one of the three European “Grand Tour” races), Paris Roubaix, Tour de Suisse, Criterium Dauphine du Libere and the Amstel Gold Race. Like JumpTV, Cycling.tv typically has long-term exclusive Internet broadcast agreements with its rights owners.
In 2007, Cycling.tv will broadcast all of the major cycling races worldwide live other than the Tour de France. Cycling.tv viewers do, however, have access to 3-minute highlights of each Tour de France day’s racing, on a video-on-demand basis, in addition to an unprecedented amount of exclusive, behind-the-scenes reports and extra features which the Company produced in association with Tour de France organizers, ASO.
Cycling.tv has an audience of Pro Cycling fans all over the world with its largest markets being North America and Western Europe. In June 2007, the Company reported viewers in 139 countries.
In 2006, Cycling.tv streamed more than 130 live racing days of cycling and currently averages more than 12 live streamed race days per month. The Company anticipates streaming more than 140 live race days in 2007.
Cycling.tv is the leading online video network offering dedicated cycling content to the global cycling audience. Cycling.tv currently has approximately 18,000 paying subscribers who pay, on average, an annual fee of approximately Â£19. On an average monthly basis over the past 12 months, Cycling.tv had approximately 130,000 unique visitors, over 200,000 live and video-on-demand stream views and approximately 10 million live and video-on-demand minutes viewed across the Cycling.tv platform and all other video distribution platforms. Like JumpTV, Cycling.tv has a targeted audience for advertisers and high engagement with average user viewing sessions of 43 minutes.
The Company currently offers a mixture of live and archived cycling races/events and related value-added content on a subscription, pay-per-view basis and free-to-consumer, ad-supported basis. All of the content offered through Cycling.tv is made available for free at lower-quality data rates while subscriptions are available to higher-quality streams.
There are currently four subscription packages available to users of Cycling.tv including the Premium Channel, Versus Channel, Vuelta a EspaÃ±a Channel and the UCI Channel. The Premium Channel subscription is the most popular and includes access to the cycling calendar’s top live action including the “Spring Classics,” plus full access to the full Premium video archive. A Versus subscription allows North American users full access to the Giro D’Italia (the world’s second largest cycling event) live, plus other top Italian cycling on a video-on-demand basis. The Vuelta a EspaÃ±a subscription includes full access to the live and on-demand event, and finally, the UCI Channel subscription offers access the World Championships in all of the disciplines including road, track, cyclo-cross and mountain biking.
G Scott Paterson, chairman and CEO of JumpTV, said: “This acquisition is in line with our pursuit of exclusive, hard-to-find and high-affinity Internet video content. Cycling is a global sport with a large and passionate international following. Moreover, we are confident that, as part of JumpTV, the world’s top cycling races will be able to afford their worldwide fans the best in an online experience.”
Kaleil Isaza Tuzman, president and COO of JumpTV, continued, “As we have continually stated, sports programming on JumpTV drives viewership and we will continue to aggressively pursue the internet broadcasting rights to important international sporting properties. These properties also hold appeal for our distribution partners around the world — be they ISPs, Internet portals, mobile carriers or IPTV set-top-box providers.”
JumpTV will continue to maintain the Cycling.tv website and Simon Brydon, the current chief executive officer of Cycling.tv, will continue in his position managing the asset. Cycling.tv will become part of the JumpTVSports division along with the to-be-acquired XOS Broadband Network, the acquisition of which is expected to close later this month. JumpTV’s Hispanic sports portal, www.SportsYa.com, and exclusive properties such as FIFA championship soccer tournaments in Canada, Euro2008 Qualifying matches, the Egyptian Football Federation and the Israeli Football League will also form part of JumpTVSports.
Brydon commented on the agreement with JumpTV, “We are delighted that Cycling.tv has found a perfect home at JumpTV. By becoming a part of the JumpTV team, we are instantly able to leverage our existing roster of top-tier cycling events and industry know-how with JumpTV’s proprietary content delivery network, its ‘Jumper’ API media player and global distribution partnerships — factors which we believe will add experiential value to our viewers, expand our overall viewership and add to the value proposition for our advertisers.”
Brydon continued, “To date Cycling.tv has focused on the sport of professional bike racing and while this will always be core to the Company, this also gives us an opportunity to develop our leisure cycling and recreational biking content which we believe will widen our appeal even further.”
Cycling.tv generated, on an unaudited basis, Â£229,860 (approx US$465,397) of revenue in the 5 months ending May 31, 2007 and an operating loss of Â£167,411 (approx US$338,957) during the same period. Unaudited revenue and operating loss for calendar 2006 was Â£376,795 (approx US$762,897) and Â£536,383 (approx US$1,086,015) respectively compared to Â£77,580 (approx US$157,076) and Â£79,494 (approx US$160,952) for the calendar year 2005.
Pro forma of the closing of the acquisitions of Cycling TV and the XOS Broadband Network (expected to be prior to the end of August 2007) there are, as of today’s date, approximately 72,000 paying monthly/annual subscribers on JumpTV.
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JumpTV (AIM: JTV) (TSX: JTV) is the world’s leading distributor of live Internet television. With over 290 TV channels from 75+ countries, JumpTV delivers full-screen news, sports and entertainment content on a real-time basis from all corners of the globe to computers, Internet-enabled TV sets, IP set-top-boxes and cell phones with browser access.
Certain statements herein may constitute forward-looking statements, including those identified by the expressions “may,” “will,” “should,” “could,” “anticipate,” “believe,” “plan,” “estimate,” “potential,” “expect,” “intent” and similar expressions to the extent they relate to JumpTV or its managements. These statements reflect JumpTV’s current expectations and are based on information currently available to management. These forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from current expectations, including the matters discussed under “Risk Factors” contained in JumpTV’s prospectus (admission document) dated August 1, 2006 and the matters discussed under “Risk Factors” contained in JumpTV’s final short form prospectus dated February 19, 2007. These forward-looking statements are made as of the date hereof, and JumpTV assumes no obligation to update or revise them to reflect new events or circumstances.