Two weeks after selling its share of sports-heavy
Fox/Liberty Networks, Liberty Media Group invested $9 million in interactive sports
service ACTV Inc. last week.
The investment -- a combination of Liberty exercising
previously existing options and purchasing additional common stock -- helps to solidify
the value of the interactive service, while providing Liberty with a platform with which
to expand its digital interactive offerings, company executives said.
Along with its $9 million investment, Liberty has the
ability to purchase additional options in ACTV totaling more than $100 million. The
investment would give Liberty a 25 percent interest in the company, up from 10 percent
The Liberty connection has already triggered a big boost in
ACTV's market capitalization. ACTV's stock price closed at $8.50 March 30 and at
$19.50 April 13 -- a difference of about $365 million in market cap over that time.
The ACTV stake is expected to be part of the interactive
assets that comprise Liberty Digital.
Liberty said last week that it would contribute its
Internet and interactive-programming assets -- including stakes in Priceline.com Inc.,
iVillage Inc., SportsLine USA Inc. and Drugstore.com Inc. -- to Liberty-controlled TCI
Music Inc. in exchange for 128.8 million newly issued TCI Music shares, giving Liberty
Digital some stock to use as deal currency.
David Reese, president and chief operating officer of ACTV,
said the deal further enhances the value of ACTV's technology as a major component in
the development and deployment of digital technology.
"The fact that they moved so quickly to increase their
investment [in ACTV], combined with the fact that we've opened a West Coast business
office with them, shows that they recognize the value of the technology," Reese said.
"We will do everything that we can to take advantage of the synergies created between
Lee Masters, president and CEO of Liberty Digital, said in
a prepared statement that ACTV has "continued to develop a suite of innovative
applications that fit very well with Liberty Digital's strategy of bringing new
digital and interactive applications to the marketplace."
Liberty, which first invested $5 million in ACTV last
September, has already begun exploring other applications of ACTV's interactive
technologies beyond its sports service. Liberty tested the ACTV technology in Ventura
County, Calif., on children's shows, news and game shows.
Liberty also worked with ACTV to implement its
"individualized television" programming with several regional sports networks.
ACTV's technology allows viewers to choose between as many as 60 different options
while watching live games.
ACTV's technology, however, goes beyond traditional
cable-programming content: The company last month announced the launch of its
software-based application, dubbed "HyperTV," into the commercial
entertainment-programming market, after two years of development as a private-network
platform for education systems, "e-School Online." HyperTV delivers streamed
Internet video, Web addresses, advertising and other data or links to viewers'
personal computers, in synchronization with broadcast or cable programming on their