JumpTV, NeuLion Create IPTV and Web Streaming Powerhouse

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JumpTV, the Toronto-based Internet broadcaster, signed a letter of intent with NeuLion, Inc., the IPTV program provider, to create a powerful online international programming presence.

The companies say their 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 mobile devices."



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.

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.

Sports Programming

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 unique visitors.

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.

International Programming

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.

Religious 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 stations.

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 million.

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 securities legislation.


JumpTV (Free Online TV: Watch Free Global TV and Online Video from JumpTV --Online Television --English), (TSX/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 world.

About NeuLion
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.


mediacastermagazine.com - Mediacaster - 6/9/2008