<PAGE> 1
Rule 425
Filer: Quokka Sports, Inc.
Subject Company: Total Sports Inc.
Subject Company SEC File No. 333-90905
QUOKKA SPORTS ANNOUNCES ACQUISITION OF TOTAL SPORTS INC.
o Creates critical mass in U.S. mainstream sports
o Doubles the Quokka Sports Network audience size
o Consolidates production technology leadership
o Accelerates planned path to profitability by three
fiscal quarters
San Francisco, California (July 21, 2000) - Quokka Sports, Inc. (Nasdaq: QKKA),
a leading provider of sports entertainment for the digital world(TM), today
announced it has signed a definitive agreement to acquire Total Sports Inc., a
leading sports Internet company. The acquisition will create critical mass in
Quokka Sports' U.S. mainstream sports presence, double the Quokka Sports Network
estimated audience size and consolidate the Company's technology leadership, and
is expected to accelerate its path to profitability by three fiscal quarters.
Under the terms of the agreement, Quokka Sports will issue approximately 15
million shares of common stock in exchange for ownership of the privately-held
Total Sports Inc., valuing the acquisition at approximately $130 million. The
transaction is currently expected to close in October 2000, subject to various
conditions including approval by Quokka Sports and Total Sports stockholders and
other customary conditions.
Founded in 1997, Total Sports is an online sports media company that is a
pioneer in real time sporting event coverage for mainstream sports. The company
owns and operates the Total Sports Network that features TotalCast(TM)
live-event coverage of Major League Baseball, NCAA basketball and NCAA football
as well as every major college sports championship including the College World
Series. In addition to live event coverage, the Total Sports Network offers
proprietary historical databases, expert data analysis and breaking news for
their loyal fan communities. Last year, Total Sports produced TotalCast(TM) live
event coverage for over 4600 games for these audiences, and according to company
estimates, their network attracted over 1.5 million unique visitors per month.
Allen & Company Incorporated and JP Morgan Securities served as financial
advisors to Total Sports for the transaction.
"Total Sports is a leader in mainstream sports entertainment that has
established a strong presence and solid reputation in the marketplace. The
acquisition of the Company will put Quokka Sports in the forefront of the
digital sports entertainment industry and takes our company to a new level. We
are continuing to build momentum in creating a digital sports entertainment
network that captures the hearts and minds of sports enthusiasts. The natural
synergies with the Total Sports organization makes this a tremendous and highly
strategic acquisition for our company. This transaction will help make us one of
the fastest growing digital content companies in the world today and get us to
profitability ahead of current schedule." said Al Ramadan, President and CEO of
Quokka Sports.
1.
<PAGE> 2
"We have tremendous respect for Al Ramadan and Quokka Sports management," said
Frank Daniels III, Founder and Chairman of Total Sports. "They have built a
great company and have cultivated an entrepreneurial culture that will mesh well
with our own. Becoming a part of Quokka Sports will maximize our company's
strengths and expertise in live event coverage and our experience in mainstream
U.S. sports entertainment. We look forward to working with them to build the
most valued company in our industry."
PATH TO PROFITABILITY
With the acquisition, Quokka Sports will expand its digital entertainment
network in U.S. mainstream sports to reach a much larger audience, create
broader revenue opportunities from multiple revenue streams, decrease
anticipated operational costs, and as a result, the Company plans to accelerate
it's path to profitability.
The Quokka Sports Network of sport verticals, according to company estimates,
attracts over 1.5 million unique visitors per month and has connected time of 36
minutes per unique visitor. Total Sports has built a U.S. mainstream sports
entertainment network that according to company estimates, attracts 1.5 million
unique visitors per month and has connected time of 10 minutes per unique
visitor. By adding Total Sports programming for Major League Baseball, NCAA
basketball and NCAA football to the Quokka Sports Network, the company expects
to double its current network audience to 3 million unique visitors per month
and continue to be one of the stickiest networks on the Internet today.
With a broader program offering and a wider network reach, Quokka Sports expects
to increase revenue opportunities from sponsors and advertisers, content
distribution and consumer products and services. The combined companies' revenue
opportunities increase Quokka Sports current revenue forecasts in 2001 to $100
million, up from $13 million in 1999 and an anticipated $50 million in 2000.
On operational costs, the addition of Total Sports technology and
production platform to Quokka Sports' existing infrastructure should
reduce production costs by 30-40%. These operational improvements are
designed to accelerate profitability for Quokka Sports three fiscal
quarters ahead of current estimates.
NETWORK EXPANSION AND TECHNOLOGY LEADERSHIP
To date, Quokka Sports has built a leadership presence in digital sports
entertainment through its network of sport verticals, including the Olympics,
Motorsports, Action Sports, Sailing and recently announced Golf vertical. The
addition of Total Sports' expertise and presence in mainstream sports such as
Major League Baseball, NCAA basketball and NCAA football will greatly expand
Quokka's product offering and U.S. audience presence. In the U.S. alone,
industry experts estimate the number of online sports enthusiasts of Major
League Baseball to be about 22 million enthusiasts, with NCAA basketball and
NCAA football also attracting over 22 million online enthusiasts to each sport.
The Company anticipates the addition of these new sports verticals with Total
Sports' product offering will double the Quokka Sports Network current audience
to over 3 million unique visitors per month.
In technology, the addition of Total Sports' production infrastructure is
expected to expand Quokka Sports' technology leadership in digital entertainment
while reducing production
2.
<PAGE> 3
expenses. Quokka Sports has grown its digital entertainment distribution network
to include every major digital platform available across today's digital media
landscape - web, wireless, broadband and converged platforms. For mainstream
sports, Total Sports has developed a live event technology, The TotalCast(TM)
System, designed specifically to effectively manage the production of hundreds
of concurrent games and events for multiple sports while maintaining bandwidth
efficiency. Its publishing system is a scalable template based infrastructure
that streamlines the publishing process and integration of content and allows
for multiple platform content stream output- currently to the Web, PDA's and
wireless phones.
These assets, combined with Quokka Sports existing digital platform for Web,
wireless, broadband, and convergence distribution, will create a larger scalable
platform for its existing digital sports entertainment and will have the
flexibility to scale new sports and technologies as opportunities for expansion
are identified. This combined technology platform will be a cornerstone for
continuing to differentiate Quokka Sports' digital sports entertainment in the
marketplace.
'Total Sports' mainstream sport entertainment network and technology and
production systems are assets that will enhance The Quokka Sports Network and
our existing digital platform. We believe incorporating their product offering
and technology into our company will attract an even wider audience to our
network and improve our production efficiencies. As a result, we expect to
accelerate our planned path to profitability," commented Alvaro Saralegui, Chief
Operating Officer of Quokka Sports.
BILLION DOLLAR MARKET OPPORTUNITY
According to a recent sports Internet report by U.S. Bancorp Piper Jaffray, the
estimate for the online sports entertainment revenue opportunity is expected to
be $2 billion in 2000, ramping to over $8 billion in the year 2004. The sources
of these revenues include growth in sponsorship and advertising, ecommerce,
content syndication and subscription.
Quokka Sports is well positioned to access this market opportunity as the Quokka
Sports Network currently attracts sponsors and advertisers that desire access to
its highly attractive audience demographics in a digital immersive environment,
has content distribution agreements with major service providers such as Yahoo!,
Excite@Home, and Terra Networks S.A. and has created consumer interest for its
specialty merchandise. To date, Total Sports has also developed revenue from
sponsors and advertisers attracted Web and wireless content distribution
partners and effectively sold consumer products and services for mainstream U.S.
sports. Their success will be complementary and accretive to Quokka Sports'
existing revenue model, and combined, create a stronger presence in the market.
In sponsorship and advertising, Quokka Sports offers its sponsors a
differentiated sports immersion product that has proved to be attractive to
companies wanting to access the highly attractive sports enthusiast demographic
in an immersive digital environment. For example, during Quokka Sports recent
event coverage of the 100th U.S. Open at Pebble Beach, the company provided
brand immersion products that provided greater return for sponsors than normal,
as click through rates were five times the industry standard of online
advertising providers. Quokka Sports intends to continue this approach with its
new sport verticals in Major League Baseball, NCAA basketball and NCAA and will
now offer sponsors and advertisers
3.
<PAGE> 4
access to sports enthusiasts of these sports in a more immersive, digital
environment than ever before.
Saralegui continued "We are excited to be offering our brand immersion products
to sponsors and advertisers wanting to get in front of U.S. sports audiences in
a digital, immersive environment. To date, we have had considerable success in
monetizing our growing network audience and we are excited about our prospects
for bringing this expertise to some of the top mainstream U.S. sports."
ABOUT TOTAL SPORTS
Located in Raleigh, North Carolina, Total Sports is an online sports media
company that owns and operates The Total Sports Network, which features
TotalCast(TM) live-event programming, also integrates interactive graphical,
textual and statistical analysis and information. Total Sports has strategic
relationships with NBC Sports, Major League Baseball, the NCAA, the Southeastern
Conference (SEC), Associated Press, AOL, The Wall Street Journal, and The Los
Angeles Times among others. In addition, Total Sports is a leader in developing
and marketing technology and content-based solutions for sports rights holders,
media companies and companies invested in sports as a part of their business
strategy.
ABOUT QUOKKA SPORTS
Quokka Sports, a leading provider of sports entertainment for the digital
world(TM), creates complete interactive sports experiences that fulfill the
passions of sports enthusiasts worldwide. Quokka Sports leverages digital
technology to offer rich, immersive presentations that include live event
coverage, news and information, analysis, audio and text dispatches from
athletes, games, community forums, and premium shopping.
The Quokka Sports Network (Quokka.com) is comprised of several sport verticals
that feature some of the world's premier sporting properties. These include and
coverage of 35 Olympic sports through NBCOlympics.com, Motor Racing (cart.com,
motograndprix.com), Action Sports (MountainZone.com coverage of skiing,
climbing, hiking, snowboarding, adventure racing and mountain biking), and
Sailing (americascup.org, volvooceanrace.org, btchallenge.com.) Quokka Sports
develops its content for a broad range of digital platforms from narrowband and
broadband Internet to wireless and converged devices. Quokka Sports' innovative
sports entertainment productions are enabled by Quokka Performance Team members
Compaq Computer Corporation, Computer Associates International, Inc. and Intel
Corporation. Quokka Sports has offices in San Francisco, London, New York,
Seattle, Detroit, Chicago, Washington D.C. and San Diego.
###
"QUOKKA" AND "QUOKKA SPORTS" ARE REGISTERED TRADEMARKS, AND "QUOKKA SPORTS
IMMERSION,"
"QNEWS," "WHAT HAPPENS NEXT," "SPORTS ENTERTAINMENT FOR THE DIGITAL WORLD" AND
THE QUOKKA LOGOS ARE TRADEMARKS OF QUOKKA SPORTS, INC.
4.
<PAGE> 5
Cautionary Statement Under The Private Securities Litigation Reform Act Of 1995:
Except for the historical information contained herein, this news
release contains forward-looking statements that involve risks and
uncertainties, including the Company's ability to improve its gross margin and
profitability, increase revenue opportunities, complete the transaction,
effectively integrate the operations of the combining companies, attract and
retain an audience, develop and launch programming, capture productions and
technology efficiencies, and attract and retain sponsors, as well as the other
risks detailed from time to time in the Company's SEC filings, including its
Report on Form 10-K for the year ended December 31, 1999, its Quarterly Report
on Form 10-Q for the quarter ended March 31, 2000 and its Report on Form 8-K
dated May 11, 2000. Actual results could differ materially from those discussed
and reported results should not be considered as an indication of future
performance. All forward-looking statements are based on information available
to the Company on the date hereof, and the Company assumes no obligation to
update such statements.
