WIXLIB

RTPOREL.UAIncNNA,SAU98ne19sLitroSp

SportsLine USA, Inc. (NasdaqT:SPLN), a leading Internet-based sportsmedia company founded in 1994, has revolutionized the way peoplesee sports by delivering up-to-the-minute sports news, information,programming and interactive forums, exciting fantasy sports products,live radio interviews, action photos, video highlights, sports merchandise and exclusive features to sports fans around the world.SportsLine USA (“SportsLine,” “the Company”) publishes severalsports-related sites on the World Wide Web, including CBS SportsLine(http://cbs.sportsline.com), Soccernet (www.soccernet.com) andGolfWeb (www.golfweb.com). The Company also produces officialWeb sites for sports teams, organizations and superstars such as theSan Francisco 49ers, the Florida Marlins, Michael Jordan, Tiger Woodsand Shaquille O’Neal. SportsLine’s electronic commerce arenas are TheSports Store (www.TheSportsStore.com), offering a unique collectionof sports-related merchandise, memorabilia and licensed products,and International Golf Outlet (www.igogolf.com), featuring fine golfproducts and equipment. SportsLine has won numerous industryawards for excellence and continues to set the pace in utilizingnew technologies and cutting-edge features to enhance the sportsfan’s experience.

199819971996Revenue:Advertising .E-commerce .Membership and premium services .Licensing and other . 17,6983,6015,0324,220 6,3291,0492,7011,935 2,01415188310Total revenue .Cost of revenue .30,55117,23112,01410,4313,0584,233Gross margin (deficit) .Operating expenses .13,32053,1581,58336,554(1,175)15,197Loss from operations .Interest income, net.(39,838)4,329(34,971)794(16,372)269Net loss .Net loss per share—basic and diluted .Weighted average common and common equivalentshares outstanding—basic and diluted . (35,509) (1.94) (34,177) (3.08) (16,103) (2.31)Year Ended December 31,(in thousands, except per share data)Statement of Operations Data18,30611,1086,971 59,075137,65510,211118,963 33,98845,7268,28336,985 15,25019,9843,87215,426Balance Sheet DataCash and short-term marketable securities .Total assets .Current liabilities.Total shareholders’ equity .REVENUEDAILY PAGE VIEWS(in thousands)(in thousands) 9,3185,5305,291 5,225 7,4314,423 7,013 6,789 4,9152,832 3,5911,6501,290 2,033 '972Q'973Q'974Q'971Q'982Q'983Q'984Q'981

2Fellow Shareholder:My satisfaction with SportsLineUSA’s past accomplishments andenthusiasm about our futureopportunities has never beengreater. We continue to providethe best sports content on theWeb, and have become the worldwide leader of Internet-basedsports information, programmingand e-commerce. Today, the sportscategory is significantly underpenetrated on the Internet and withmore and more sports fans comingon-line, both in the United Statesand abroad, we believe that sportswill ultimately become the leadingcontent category on the Web.I am confident that our superiorcontent, distribution channels andproduct offerings will enableus to capture the largest share ofthat audience.Our model is straightforward:produce the world’s best sportscontent, leverage strong promotion and distribution to drive significant reach and traffic, andthen generate increased revenuefrom advertising, e-commerce,subscription-based services andcontent licensing.The sports industry continues togrow worldwide. According toSports Business Journal, sports isnow the 11th largest industry inthe United States. Moreover, accessto the Internet continues to growsignificantly, increasing by 75% in1998 to 76.5 million people withon-line access in the United States.This convergence creates a tremendous opportunity for SportsLine.Currently, approximately 20% ofall television advertising is directedtowards sports. With a growingnumber of sports fans coming online, we believe the same potential exists for sports advertising onthe Internet. SportsLine providesadvertisers with an effectiveopportunity to extend their messaging and branding, where theycan reach an audience withsimilar demographic characteristics as viewers of television sports.SportsLine however, offers advertisers a vehicle to reach this audience 24 hours a day, seven daysa week, and not just when theevent takes place.Over 1.5 billion was spent onadvertising on the Web in 1998and projections by Jupiter Communications indicate these figureswill surge to 7.7 billion by 2003.Advertising revenue generated onSportsLine USA Web sites nearlytripled in 1998 to 17.7 million.Electronic commerce on theInternet also continued its phenomenal growth in 1998, andthe potential for future growth iseven more promising as consumerscontinue to gain confidence in thismedium as an alternative to traditional shopping. We took significant steps in 1998 to enhance ouron-line store and e-commerceofferings and, as a result, oure-commerce revenue in 1998 morethan tripled from the prior year.We believe that our long-termsuccess depends on having a solidbroadcast partner and, in CBS, wefeel we have the best. CBS has anoutstanding sports schedule withthe NFL, NCAA basketball andfootball, golf, auto racing, tennisand event coverage of many othermajor sports. Our affiliation withCBS was recently enhanced withthe extension of our strategic relationship through the year 2006.The amended agreement providesfor SportsLine to receive an incremental 100 million in on-air network promotion, beyond theoriginal 57 million in promotionthrough 2001, and also providesfor a fully integrated advertisingsales effort with CBS Sports.During this past year, we enhancedand formed affiliations withseveral premier Internet properties, including America Online,Excite, Netscape and Infospace.SportsLine serves as the primarysports provider and receives traffic from each of those services.According to Media Metrix, 51% ofall time spent on the Web fromhome is spent with America Online,and SportsLine now is the premiersports information and e-commerceprovider for AOL’s 17 million-plussubscribers. In a relatively shortperiod of time, we have been ableto generate significant growth bothin traffic to our Web sites and inreach among Internet users throughthese distribution partners.To keep users coming to ourWeb sites more frequently, andencourage them to view morepages and purchase merchandise,we initiated SportsLine Rewardsand Rewards Plus in early 1999.These programs award points tofrequent visitors and on-linepurchasers that can be redeemedfor merchandise and specialprivileges. Through these programs we are able build a reliabledatabase and better learn whatour users’ interests are, thereforeenabling us to maximize ourcross-organizational marketingefforts while providing targetingopportunities for our sponsors.

OUR MODEL IS STRAIGHTFORWARD: PRODUCE THE WORLD’S BESTSPORTS CONTENT, LEVERAGE STRONG PROMOTION AND DISTRIBUTION TO DRIVE SIGNIFICANT REACH AND TRAFFIC, AND THENGENERATE INCREASED REVENUE FROM ADVERTISING, E-COMMERCE,SUBSCRIPTION-BASED SERVICES AND CONTENT LICENSING.We have always been committedto remain in front of the curvetechnologically. With the mediumchanging rapidly, we are constantly striving to provide superiorcontent, while enriching our visitors’ experience through integrated audio and video, VRML(3D) Chat, Dynamic HTML, Shockwave, JAVA and live radio programming. We have continued toenhance the “total experience”at our Web sites through thecreation of live game simulations,chat sessions, personalized contentand fantasy leagues.SportsLine is currently pioneeringapplications for streaming videoand audio, and we are alreadyproviding special features andcontent to Road Runner customers, designed specifically forusers with high-speed broadbandaccess to the Internet. With CBSand America Online as partners,we are well positioned to remainat the forefront of providingdynamic content to capitalize onthese enhanced technologies andfuture convergence of video andhigh-speed Internet access.In 1998, we dramatically extendedour worldwide golf coverageand merchandise offerings withthe acquisitions of GolfWeb forcontent and International GolfOutlet for e-commerce. In April1999, we solidified our leadershipposition in golf with the additionof pgatour.com, our first officialleague site. We intend to aggressively pursue other league dealswith the intent of securing rightsfor exclusive official league content and merchandise distributionopportunities.Globally, with sports on theWeb far less penetrated thanin the United States, there iseven greater opportunity forSportsLine. We have alreadydeveloped a strong presence internationally, with Soccernet andCricInfo providing extensive coverage of soccer and cricket, and ourcoverage of the 1998 soccer WorldCup was unmatched. We alsolaunched SportsLine WorldWideduring 1998, delivering globalsports information to 14 countriesin their native languages.Over the past year, we significantlystrengthened our capitalization bymore than 230 million, from oursecondary equity offering in April1998, and the issuance of convertible notes in March 1999. Theseadditional resources will enhanceour ability to expand internationally, pursue new partners andacquisitions, and expand ourmarketing efforts.I am extremely confident thatwe will continue to increaseSportsLine’s brand awareness andaudience reach, which will havea direct impact on our ability togrow revenues in advertising,e-commerce, content licensing andsubscription services. We will continue pursuing and making investments in business opportunitiesthat will add long-term value forour shareholders. Our dedicatedmanagement team and staff areunparalleled in the media andon-line industries. Our investmentsin technology and strategicalliances are paying off in morevisitors, who stay longer and buymore products. Our focus on sportshas enabled us to provide ourusers unrivaled content and coverage. And our efforts to generatemultiple revenue streams throughmultiple distribution channelshave enhanced our opportunityfor continued success.We are excited about the futureof SportsLine USA and appreciatethe support we’ve received fromall of our strategic allies, advertisers, employees and users. Andfinally, I thank our shareholdersfor their continued confidence inand support of SportsLine USA.Michael LevyChairman, President andChief Executive OfficerSportsLine USA, Inc.April 19993