SPORTSLINE USA INC, 424B1, 1997-11-14

SPORTSLINE USA INC
424B1, 1997-11-14
COMPUTER PROCESSING & DATA PREPARATION

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SportsLine USA

3,500,000 Shares

COMMON STOCK

All of the 3,500,000 shares of Common Stock offered hereby are being sold
by SportsLine USA, Inc. ("SportsLine USA" or the "Company"). Intel Corporation
("Intel") and a subsidiary of Mitsubishi Corporation ("Mitsubishi") have agreed
to purchase from the Company 672,043 shares and 134,408 shares, respectively,
of the Common Stock offered hereby at a price per share equal to the Price to
Public less the Underwriting Discounts and Commissions. See "Underwriting."

Prior to this offering, there has been no public market for the Common
Stock of the Company. See "Underwriting" for a discussion of the factors
considered in determining the initial public offering price. The Common Stock
has been approved for quotation on the Nasdaq National Market under the symbol
"SPLN."

----------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 7.
----------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
===============================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC (1) COMMISSIONS (2) COMPANY (3)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share ...... $ 8.00 $ 0.56 $ 7.44
- -------------------------------------------------------------------------------
Total (4) ...... $27,548,387 $1,960,000 $25,588,387
===============================================================================

</TABLE>
(1) An aggregate of 806,451 shares of Common Stock will be purchased at a price
per share equal to the Price to Public less the Underwriting Discounts and
Commissions. See "Underwriting."

(2) BancAmerica Robertson Stephens, Cowen & Company and NationsBanc Montgomery
Securities, Inc. are acting as the Company's placement agents in
connection with the shares offered to Intel and Mitsubishi, and, in
connection therewith, the Company has agreed to pay a fee of $0.56 per
share. See "Underwriting."

(3) Before deducting offering expenses payable by the Company, estimated at
$600,000.

(4) The Company has granted the Underwriters a 30-day option to purchase up to
an additional 525,000 shares of Common Stock solely to cover
over-allotments, if any. See "Underwriting." If such option is exercised
in full, the total Price to Public, Underwriting Discounts and Commissions
and Proceeds to Company will be $31,748,387 $2,254,000 and $29,494,387,
respectively.

----------------
The Common Stock is offered by the Underwriters as stated herein, subject
to receipt and acceptance by them and subject to their right to reject any order
in whole or in part. It is expected that delivery of such shares will be made
through the offices of BancAmerica Robertson Stephens, San Francisco,
California, on or about November 18, 1997.

BANCAMERICA ROBERTSON STEPHENS

COWEN & COMPANY

NATIONSBANC MONTGOMERY SECURITIES, INC.

The date of this prospectus is November 13, 1997

<PAGE>
Creating a Global Sports Brand

PICTURE OF THE COMPANY'S WELCOME WEB PAGE ACCOMPANIED BY TEXT, LINKS TO
ARTICLES, "Hunting for Gators" and "Top News" and LINKS TO THE COMPANY'S OTHER
WEB PAGES AND SERVICES, including "Free Trial Membership, Index, Search, NFL,
College Football, Baseball, NBA, NHL, Golf, Tennis, More Sports, Scoreboard,
Superstars, Live Radio, Personal Sports, Contest, Fantasy Sports, Columns,
Newsroom, City Pages, Superstore, Chat, E World, Java Scores, Member Services,
About SportsLine, FAQ Sponsor Index"

PICTURE OF THE COMPANY'S WINTER OLYMPICS WEB PAGE ACCOMPANIED BY TEXT," TIME
WARP AND LINKS TO THE COMPANY'S OTHER WINTER OLYMPICS WEB PAGES, Cross Country,
Giant Slalom and Slalom, Downhill and SuperGiant Slalom, Ski Jumping, Nordic
Combined, Freestyle Skiing, Snow Bording, Short Track Speed Skating, Figure
Skating, Ice Hockey, Bobsleigh, Luge, Curling and Biathlon

PICTURE OF THE COMPANY'S BASEBALL WEB PAGE ACCOMPANIED BY TEXT, "Northern
Exposure" and "Top News" and LINKS TO THE COMPANY OTHER WEB PAGES AND SERVICES,
Free Trial Membership, Home, Index Search, Library Teams, Players, Minors,
Columns, Baseball Live!, Contests, Fantasy, Your MLB Page, Schedules, Standings,
Injuries, Transactions, Analysis and Team Reports

PICTURE OF THE COMPANY'S JAVA FOOTBALL LINE WEB PAGE ACCOMPANIED BY ANIMATED
GRAPHIC OF A FOOTBALL FIELD AND SCOREBOARD

PICTURE OF THE COMPANY'S CRICKET WEB PAGE ACCOMPANIED BY TEXT, "Sailing the
Indies" LINKS TO OTHER ARTICLES, "Top News" and LINKS TO THE COMPANY'S OTHER WEB
PAGES AND SERVICES, "Free Trial Membership, Home, Index, Search, By Country and
Columns"

PICTURE OF THE COMPANY'S 1997 U.S. OPEN WEB PAGE ACCOMPANIED BY TEXT LINKS TO
GOLF RELATED ARTICLES, "Nerves of Steel", Golf News Articles and LINKS TO THE
COMPANY'S OTHER WEB PAGES AND SERVICES, including, "U.S. Open Leaderboard, Golf
News, The Field, Home, Index, Search, Congressional Country Club, Photos, Eye
on Tiger, Arnold Palmer, John Daly, History and Audio"

INFORMATION ON THE COMPANY'S WEB SITES SHALL NOT BE DEEMED TO CONSTITUTE A
PART OF THIS PROSPECTUS.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS OR THE IMPOSITION
OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

<PAGE>

Advertising & Sponsorship

PICTURE OF THE COMPANY'S AUTO RACING WEB PAGE ACCOMPANIED BY OLDSMOBILE
SPONSORSHIP ADVERTISING, "360/degrees/ Interior" . . . and LINKS TO THE
COMPANY'S OTHER WEB PAGES AND SERVICES, including "Free Trial Membership, Home,
Index, Search, Indy 500, PPG CART, Columns, SportsLine Audio, Allsports Photos
and Reuters Photos

PICTURE OF THE COMPANY'S COCA-COLA 600 WEB PAGE ACCOMPANIED BY TEXACO
SPONSORSHIP ADVERTISING, "Presented by Texaco", TEXT AND ARTICLES, "It's Jeff's
World" and "Top News" dated Monday, August 4, 12:16 P.M. and LINKS TO THE
COMPANY'S OTHER WEB PAGES AND SERVICES, Auto Racing, Home, Index and Search

A SAMPLE OF THE NAMES AND LOGOS OF THE COMPANY'S ADVERTISERS AND SPONSORS

BellSouth [Logo]
Oldsmobile [Logo]
Bell Atlantic [Logo]
1-800-Flowers [Logo]
Buick [Logo]
Sprint [Logo]
Intel [Logo]
Honda [Logo]
Pepsi [Logo]
Visa [Logo]
Toyota [Logo]
Ford [Logo]
Sears [Logo]
US Robotics [Logo]
Army [Logo]
Perry Ellis MensWear [Logo]
Philips [Logo]
Mountain Dew [Logo]
Delta AirLines [Logo]
American Greeting [Logo]
Selsun Blue [Logo]
DirecTV [Logo]
AT&T [Logo]
American Express Travel [Logo]
The Coca-Cola [Logo]
Microsoft [Logo]
Sun Microsystems [Logo}
Chase Manhattan [Logo]
IBM [Logo}

Merchandise

PICTURE OF THE COMPANY'S SUPERSTORE WEB PAGE ACCOMPANIED BY TEXT, "Member
Exclusive. . .CBS SportsLine Member SAVE 10% on Merchandise! Not a Member? Click
for your CBS SportsLine FREE Trial?" and LINKS TO THE COMPANY'S OTHER WEB PAGES
AND SERVICES, including "Superstore, Home, Index, Search, Product Index, Help,
Shopping Cart, Apparel, Art, Books, Memorabilia, Photos, Sporting Goods and
Trading Cards."

PICTURE OF THE COMPANY'S ERA RE - VISITED JOE NAMATH AUTOGRAPHED THROWBACK
JERSEY WEB PAGE AND ACCOMPANIED BY TEXT RELATING TO THE ITEM FOR SALE

PICTURE OF THE COMPANY'S MICHAEL JORDAN SIGNATURE MINI-BACKETBALL WEB PAGE AND
ACCOMPANIED BY TEXT RELATING TO THE ITEM FOR SALE

PICTURE OF THE COMPANY'S BOOKSTORE WEB PAGE AND ACCOMPANIED BY TEXT RELATING TO
THE ITEMS FOR SALE

<PAGE>

Membership & Premium Products

PICTURE OF THE COMPANY'S FANTASY FOOTBALL WEB PAGE ACCOMPANIED BY TEXT, AND
LINKS TO ARTICLES, "Chief Concerns" and "Columns" and LINKS TO THE COMPANY'S
OTHER WEB PAGES AND LINKS, including, "Fantasy Sports, Home, Index, Search,
Challenge Game, Advance Scout, Commissioner and Interact"

PICTURES OF THE COMPANY'S PERSONAL SPORTS WEB PAGE ACCOMPANIED BY SAMPLES AND
TEXT, "Personal Sportspage . . Your Teams, Your Stories . . Your Home Page . .
Personal SportsMail . . . When You Can't Pick It up . . . We'll Deliver It" and
LINKS TO THE COMPANY'S WEB PAGE TO SUBSCRIBE TO THE PERSONAL SPORTS PAGE AND
PERSONAL SPORTS MAIL

PICTURE OF THE COMPANY'S FANTASY BASEBALL COMMISSIONER WEB PAGE ACCOMPANIED WITH
ADVERTISING, "Brought to you by DirecTV [Logo]"

PICTURE OF THE COMPANY'S EXCLUSIVE MEMBER BENEFITS WEB PAGE

PICTURE OF THE COMPANY'S NEWSSTAND WEB PAGE ACCOMPANIED BY LINK TO THE
COMPANY'S, "Pro Football Newsstand, College Football Newsstand"

Additional Revenue Opportunities

PICTURE OF THE COMPANY'S SHAQ WORLD WEB PAGE ACCOMPANIED BY A PICTURE OF
SHAQUILLE O'NEAL AND LINKS TO THE COMPANY'S OTHER WEB PAGES, including "Hot
Spot, B Ball, Shaq Paq, The Show, The Shop, Live Chat and SportsLine USA"

PICTURE OF THE COMPANY'S MICHAEL JORDAN WEB PAGE ACCOMPANIED BY LINKS TO THE
COMPANY'S OTHER WEB PAGES, including, "Career, Bulls, NBA, Chat, Audio/Video,
Game, Shop, Index"

PICTURE OF THE COMPANY'S LIVE RADIO! WEB PAGE AND LINKS TO THE COMPANY'S WEB
SITES, INCLUDING, "Schedule, Upcoming Guests, Archives, Radio Cam, Email,
Partners, Free Trial Memberhip, Home, Index and Search"

PICTURE OF THE COMPANY'S ORANGE BOWL WEB PAGE ACCOMPANIED BY "FEDEX Orange
Bowl" [Logo]. .

PICTURE OF THE COMPANY'S VEGAS INSIDER WEB PAGE ACCOMPANIED BY TEXT AND
ARTICLES, "What's Hot; What a Line" and Preseason Power Rating" and othersports
LINKS TO THE COMPANY'S OTHER WEB PAGES, including Odds, Picks, Matchups,
Injuries, Weather, Scores, Interact, Handicappers, NFL, College Football, NBA,
College Basketball, Hockey, Other Sports.

PICTURE OF THE COMPANY'S TIGER WOODS WEB PAGE ACCOMPANIED BY A PICTURE OF TIGER
WOODS AND LINKS TO THE COMPANY'S OTHER WEB PAGES, Including "All About Tiger,
Tiger Watch, Chat, The Shop, Index and Shop

[SportsLine is pursuing multiple revenue opportunities, including membership and
premium service fees, third parry web site development, content licensing, and
radio syndications.]

<PAGE>

NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER
TO, OR A SOLICITATION OF, ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.

UNTIL DECEMBER 8, 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

----------------
TABLE OF CONTENTS

PAGE
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<S> <C>
Summary .............................................................................. 4
Risk Factors ........................................................................ 7
Use of Proceeds ..................................................................... 21
Dividend Policy ..................................................................... 21
Capitalization ..................................................................... 22
Dilution ........................................................................... 23
Selected Financial Data ............................................................ 24
Management's Discussion and Analysis of Financial Condition and Results of Operations 25
Business ........................................................................... 32
Management ........................................................................... 48
Certain Transactions ............................................................... 57
Principal Shareholders ............................................................... 59
Description of Capital Stock ......................................................... 61
Shares Eligible for Future Sale ...................................................... 64
Underwriting ........................................................................ 66
Legal Matters ........................................................................ 68
Experts .............................................................................. 68
Additional Information ............................................................... 68
Index to Financial Statements ...................................................... F-1
</TABLE>

----------------
The Company intends to furnish to its shareholders annual reports
containing audited financial statements examined by an independent accounting
firm and quarterly reports for the first three quarters of each fiscal year
containing interim, unaudited financial information.

"SportsLine" is a registered service mark of the Company. The CBS "eye
device" is a registered trademark of CBS Inc. This Prospectus also includes
trademarks and trade names of companies other than the Company and CBS Inc. All
other company or product names are trademarks or registered trademarks of their
respective owners.

<PAGE>

SUMMARY

THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION, INCLUDING "RISK FACTORS," AND THE FINANCIAL STATEMENTS AND NOTES
THERETO, APPEARING ELSEWHERE IN THE PROSPECTUS. EXCEPT AS OTHERWISE NOTED, ALL
INFORMATION IN THIS PROSPECTUS ASSUMES (I) A 1-FOR-2.5 REVERSE STOCK SPLIT OF
THE COMMON STOCK, (II) THE CONVERSION INTO 5,798,434 SHARES OF COMMON STOCK OF
ALL OUTSTANDING SHARES OF THE COMPANY'S PREFERRED STOCK UPON THE COMPLETION OF
THIS OFFERING, (III) THE FILING OF AN AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION WHICH, AMONG OTHER THINGS, AUTHORIZES THE ISSUANCE OF "BLANK
CHECK" PREFERRED STOCK AND (IV) NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT
OPTION OR OUTSTANDING OPTIONS OR WARRANTS.

THE COMPANY

SportsLine USA is a leading Internet-based sports media company that
provides branded, interactive information and programming as well as merchandise
to sports enthusiasts worldwide. cbs.sportsline.com, the Company's flagship site
on the World Wide Web (the "Web"), delivers real-time, in-depth and compelling
sports content and programming that capitalizes on the Web's unique graphical
and interactive capabilities. The Company's other Web sites include those
devoted to sports superstars such as Joe Namath, Shaquille O'Neal (shaq.com),
Cal Ripken, Jr. (2131.com) and Wayne Gretzky (gretzky.com) and to electronic
odds and information on major sports events (vegasinsider.com). The Company also
has entered into exclusive agreements to create Web sites for Michael Jordan,
Tiger Woods and Joe Montana, all of which are expected to be launched during
1997. The Company's objective is to become the leading Internet-based sports
media company and to create a global sports brand. To this end, the Company
focuses exclusively on sports and distinguishes itself from other content
providers by offering innovative, timely and comprehensive sports content. To
date, the Company has achieved only limited revenues and has incurred operating
losses in each period. However, traffic on the Company's Web sites has increased
significantly since the commercial launch of the Company's first Web site in
August 1995 to a daily average of 2,270,000 page views and 352,000 visits during
September 1997, increases of 210% and 271%, respectively, from December 31, 1996
to September 30, 1997, and the Company's Web sites had approximately 45,700
paying members as of September 30, 1997.

The Company distributes a broad range of up-to-date news, scores, player
and team statistics and standings, photos and audio and video clips obtained
from leading sports news organizations and the Company's superstar athletes;
offers instant odds and picks; produces and distributes entertaining,
interactive and original programming such as editorials and analyses from its
in-house staff and freelance journalists; produces and offers contests, games,
fantasy league products and fan clubs; and sells sports-related merchandise and
memorabilia. The Company also owns and operates a state-of-the-art radio studio
from which it produces the only all-sports radio programming broadcast
exclusively over the Internet.

A key element of the Company's strategy is to establish strategic
relationships to increase consumer awareness of the SportsLine brand and build
traffic on its Web sites. In March 1997, the Company established a strategic
alliance with CBS Inc. ("CBS") pursuant to which CBS acquired a minority
ownership interest in the Company, and the Company's flagship Web site was
renamed "cbs.sportsline.com." The CBS agreement provides for cbs.sportsline.com
to receive, among other things, at least $57 million of network television
advertising and on-air promotion during the next five years, primarily during
CBS television sports broadcasts such as the 1998 Winter Olympics, NCAA Men's
Basketball Tournament, NCAA Football, PGA Tour events, U.S. Open tennis and the
Daytona 500. The Company believes that its relationship with CBS, in particular
the branding of its flagship Web site as "cbs.sportsline.com" and the promotion
the Company will receive on CBS

<PAGE>

television broadcasts, will enable it to establish SportsLine as a broadly
recognized consumer brand. In July 1997, the Company entered into a strategic
programming and distribution agreement with America Online Inc. ("AOL"),
pursuant to which cbs.sportsline.com became the first "anchor tenant" on AOL's
Sports Channel, allowing AOL's more than 9 million subscribers to access the
Company's Web sites from within the AOL service. The AOL agreement also provides
the Company the opportunity to market memberships, premium services and
merchandise to AOL's subscribers and to integrate its sports content and
programming into all major sports areas of the AOL service. The Company also
recently entered into an agreement with Microsoft Corporation ("Microsoft")
under which cbs.sportsline.com will be integrated into Microsoft's "Active
Desktop" as part of Microsoft's forthcoming release of the latest version of
Internet Explorer ("IE4") and operating system ("Windows 98").
cbs.sportsline.com is also featured as a default content "channel" in the
Channel Finder of Netscape Communication Corporation's ("Netscape") recently
released Netcaster software, which utilizes "push" delivery to give users the
ability to subscribe to dynamic Web content and to browse these channels and Web
sites offline from their desktop. The Company has also established strategic
marketing relationships with sports superstars, personalities, organizations and
affinity groups.

The Company's strategy is to capitalize on the market opportunities created
by the popularity of sports. Participatory and spectator sports are among the
leading pastimes of Americans as demonstrated by the popularity of sports media
and by the time and money consumers spend on sports events, products and
services. Based on industry sources, the Company estimates that attendance at
Major League Baseball, NFL, NBA and NHL games during the 1995-1996 season was
approximately 120 million, generating gate receipts of over $3 billion. Sports
television programming also consistently draws large audiences, with sports
broadcasts comprising eight of the top ten most widely viewed television
programs in 1996, according to Nielsen Media Research. The popularity of sports
is also demonstrated by the success of sports publications, the top five of
which had a paid weekly circulation of 8.9 million and generated over $800
million in advertising revenue in 1996, according to Advertising Age. In
addition, the U.S. retail market for licensed sports merchandise and apparel was
approximately $14 billion in 1996, according to the Sporting Goods Manufacturers
Association. Due to the popularity of sports among males between the ages of 18
and 49, advertisers consider sports events and media as attractive venues to
reach this audience. Based on industry sources, approximately $4.7 billion was
spent on sports television advertising and approximately $5.4 billion was spent
on sponsorships of sports events in 1996.

The Company generates revenue from multiple sources. Since March 31, 1996,
a majority of the Company's revenue has been derived from advertising. Although
most of the content on the Company's Web sites is free, users can purchase
memberships and premium content and products. The Company also expects to derive
future revenue from transactions on its Web sites, including the sale of limited
edition memorabilia, licensed apparel and other sports-related products,
syndication of its programming in other media, and development of Web sites for
third parties.

The Company was incorporated in Delaware in February 1994. Its principal
executive offices are located at 6340 N.W. 5th Way, Fort Lauderdale, Florida
33309, and its telephone number is (954) 351-2120. Unless the context otherwise
requires, the terms "Company" or "SportsLine USA" refer to SportsLine USA, Inc.,
and the terms "cbs.sportsline.com" and "vegasinsider.com" refer to the Company's
Web sites, located at http://cbs.sportsline.com and http://www.vegasinsider.com,
respectively. All references to cbs.sportsline.com include, where appropriate,
www.sportsline.com, which was the address of the Company's flagship Web site
prior to March 1997.

<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered hereby ........................... 3,500,000 shares (1)
Common Stock to be outstanding after the Offering ...... 13,632,523 shares (2)(3)
Use of Proceeds ....................................... For working capital and other general
corporate purposes, including possible
acquisitions. See "Use of Proceeds."

Nasdaq National Market symbol ........................... "SPLN"
</TABLE>

SUMMARY FINANCIAL DATA
(In thousands, except share and per share data)
<TABLE>
<CAPTION>

FEBRUARY 23, 1994
(INCEPTION) NINE MONTHS ENDED
THROUGH YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, --------------------------- ---------------------------
1994 1995 1996 1996 1997
------------------ ------------ ------------ ------------ ------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue ..................... $ -- $ 52 $ 2,437 $ 1,173 $ 5,867
Gross margin (deficit) ...... -- (705) (958) (992) 1,009
Loss from operations ......... (442) (5,372) (13,084) (8,712) (19,487)
Net loss ..................... $ (404) $ (5,330) $ (12,855) $ (8,655) $ (18,990)
Net loss per share (3) ...... $ (0.19) $ (1.42) $ (1.92) $ (1.44) $ (1.92)
Weighted average common and
common equivalent shares

outstanding (3)(4) ......... 2,071,869 3,748,241 6,681,043 6,019,951 9,867,677
</TABLE>
<TABLE>
<CAPTION>

SEPTEMBER 30, 1997
-------------------------------
PRO FORMA
ACTUAL AS ADJUSTED (3)(5)
--------- -------------------
(Unaudited)

<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents ...... $ 8,115 $33,303
Working capital ............... 9,279 34,267
Total assets .................. 18,761 43,749
Long-term obligations ......... 390 390
Total shareholders' equity ...... 13,394 38,382
</TABLE>
- ----------------
(1) Includes an aggregate of 806,451 shares of Common Stock that Intel and
Mitsubishi have agreed to purchase from the Company. See "Underwriting."

(2) Excludes 1,096,792 shares of Common Stock issuable pursuant to stock options
outstanding as of September 30, 1997 (of which options to purchase
approximately 280,300 shares were exercisable) with a weighted average
exercise price of $4.69 per share and 1,862,188 shares of Common Stock
issuable upon the exercise of warrants outstanding as of September 30, 1997
(of which warrants to purchase approximately 1,432,200 shares were
exercisable) with a weighted average exercise price of $6.93 per share. See
"Management--Stock Plans" and "Description of Capital Stock--Options and
Warrants." Also excludes 3,867,727 shares of Common Stock issuable pursuant
to the Company's agreement with CBS (including 1,520,000 shares issuable
upon the exercise of warrants to be granted to CBS). See "Certain
Transactions--CBS Agreement."

(3) Gives effect to the conversion of all outstanding shares of the Company's
preferred stock into 5,798,434 shares of Common Stock upon completion of
this offering.

(4) See Note 2 of Notes to Financial Statements for an explanation of the
determination of the weighted average common and common equivalent shares
used to compute net loss per share.

(5) Adjusted to give effect to the sale of 2,693,549 shares of Common Stock
offered hereby at the initial public offering price and the sale of 806,451
shares of Common Stock offered hereby at a price per share equal to the
initial public offering price less the underwriting discounts and
commissions, and the application of the estimated net proceeds therefrom.
See "Use of Proceeds."

6
<PAGE>

RISK FACTORS

RISK FACTORS RELATED TO THE COMPANY'S OPERATIONS

LIMITED OPERATING HISTORY; ANTICIPATION OF CONTINUING LOSSES; ACCUMULATED
DEFICIT

The Company was incorporated in February 1994 and commercially introduced
its first Web site in August 1995. The Company first recognized revenue from
operations in the quarter ended September 30, 1995. Accordingly, the Company has
a limited operating history upon which an evaluation of the Company and its
prospects can be based. The Company's prospects must be considered in light of
the risks, uncertainties, expenses and difficulties frequently encountered by
companies in their early stage of development, particularly companies in the new
and rapidly evolving Internet-based advertising, information services and
commerce markets. To address these risks, the Company must, among other things,
provide compelling and original content to Internet users, maintain existing
relationships and effectively develop new relationships with advertisers, their
advertising agencies and other third parties, develop and upgrade its
technology, respond to competitive developments and attract, retain and motivate
qualified personnel. There can be no assurance that the Company will succeed in
addressing such risks, and the failure to do so could have a material adverse
effect on the Company's business, results of operations and financial condition.

Since its inception, the Company has incurred substantial costs to develop
and enhance its technology, to create, introduce and enhance its service
offerings, to acquire and develop content, to build traffic on its Web sites, to
acquire members, to establish marketing relationships and to build an
administrative organization. The Company intends to continue these efforts and,
in addition, to increase its spending for content development and acquisition
and for marketing. The Company has entered into various licensing, royalty and
consulting agreements with content providers, vendors, athletes and sports
organizations, which agreements provide for consideration in various forms,
including issuance of warrants to purchase Common Stock and payment of
royalties, bounties and certain other guaranteed amounts on a per member and/or
a minimum dollar amount basis over terms ranging from one to ten years.
Additionally, some of these agreements provide for a specified percentage of
advertising and merchandising revenue to be paid to the athlete or organization
from whose Web site the revenue is derived. As of September 30, 1997, the
minimum guaranteed payments required to be made by the Company under such
agreements were $11,295,000, including, in the case of one such agreement, up to
$600,000 per year, or $3,000,000 in the aggregate, if the proceeds realized upon
the sale of the Common Stock issued upon the exercise of the warrants granted
thereunder do not exceed $28.75 per share. The Company's minimum guaranteed
payments are subject to reduction in the case of certain agreements based upon
the appreciation of warrants issued, the value of stock received on exercise of
such warrants and the amount of profit sharing earned under the related
agreements. Also, the Company has recorded noncash expense of $5,484,000 for the
nine months ended September 30, 1997 related to the CBS agreement and will
record an additional $56,354,000 of noncash expense related to the CBS agreement
over the remaining term of that agreement. As a consequence of the foregoing,
the Company has incurred operating losses in each of its fiscal quarters and
years since inception and expects to continue to incur significant operating
losses for at least the next 24 to 30 months. As of September 30, 1997, the
Company had an accumulated deficit of $37,579,226.

The Company has achieved only limited revenue to date and its ability to
generate significant revenue is subject to substantial uncertainty. There can be
no assurance that the Company will ever generate sufficient revenue to meet its
expenses or achieve or maintain profitability and the failure to

<PAGE>

do so would have a material adverse effect on the Company's business, results of
operations and financial condition. Further, in view of the rapidly evolving
nature of the Company's business and its limited operating history, the Company
believes that period-to-period comparisons of its financial results are not
necessarily meaningful and should not be relied upon as an indication of future
performance. See "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and Notes 5 and 8 of
Notes to Financial Statements.

UNPREDICTABILITY OF FUTURE REVENUE; POTENTIAL FLUCTUATIONS IN QUARTERLY
OPERATING RESULTS; SEASONALITY

As a result of the Company's limited operating history and the emerging
nature of the markets in which it competes, the Company is unable to accurately
forecast its revenue. The Company expects in the future to derive revenue from a
mix of advertising, membership and premium service fees, merchandise sales,
content licensing, Web site development and syndication fees. Through September
30, 1997, transaction and site development revenue have not been significant,
and the Company had not received any syndication revenue. Because changes in
revenue from memberships and premium services are expected to occur over a
period of time while advertising revenue will be recognized when the
advertisements appear, fluctuations in quarterly revenue and operating results
are likely to be particularly affected by the level of advertising revenue
within each quarter. The Company's current and future expense levels are based
largely on its expectations concerning future revenue and are to a large extent
fixed. Accordingly, the Company may be unable to adjust spending in a timely
manner to compensate for any unexpected revenue shortfall, and a shortfall in
revenue in relation to the Company's expectations could have a material adverse
effect on the Company's business, results of operations and financial condition.
In addition, the Company currently intends to significantly increase its
operating expenses to develop and enhance its technology, to create, introduce
and enhance its service offerings, to acquire and develop content, to fund
increased sales and marketing expenses and to enter into new strategic
agreements. To the extent that such expenses precede or are not subsequently
followed by increased revenue, the Company's business, results of operations and
financial condition could be materially adversely affected.

The Company's quarterly operating results have fluctuated in the past and
are expected to continue to fluctuate in the future as a result of a variety of
factors, many of which are outside the Company's control. These factors include:
the level of usage of the Internet; the level of traffic on the Company's Web
sites; demand for Internet advertising; seasonal trends in both Internet usage
and advertising placements; the addition or loss of advertisers; the advertising
budgeting cycles of individual advertisers; the number of users that purchase
memberships, merchandise or premium services; the amount and timing of capital
expenditures and other costs relating to the expansion of the Company's
operations; the introduction of new sites and services by the Company or its
competitors; price competition or pricing changes in the industry; technical
difficulties or system downtime; general economic conditions; and economic
conditions specific to the Internet, electronic commerce and online media.

The Company expects that its revenue will be higher leading up to and
during major U.S. sport seasons and lower at other times of the year,
particularly during the summer months when the only major U.S. sports season in
progress is Major League Baseball. The Company believes that advertising sales
in traditional media, such as television, generally are lower in the first and
third calendar quarters of each year, and that advertising expenditures
fluctuate significantly with economic cycles. Depending on the extent to which
the Internet is accepted as an advertising medium, seasonality and cyclicality
in the level of Internet advertising expenditures could become more pronounced.
The foregoing factors could have a material adverse effect on the Company's
business, results of operations and financial condition.

Due to all of the foregoing factors, it is possible that the Company's
operating results will fall below the expectations of securities analysts or
investors in some future quarter. In such event, the trading price of the Common
Stock would likely be materially adversely affected. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

<PAGE>

DEPENDENCE ON CBS RELATIONSHIP

In March 1997, the Company entered into a five-year agreement with CBS,
pursuant to which the Company's flagship Web site was renamed
"cbs.sportsline.com." Over the term of the agreement, the Company has the right
to use certain CBS logos and television-related sports content and expects to
receive, among other things, at least $57 million of network television
advertising and on-air promotions. In connection therewith, the Company has
recorded noncash expense of $5,484,000 for the nine months ended September 30,
1997 related to the CBS agreement and will record an additional $56,354,000 of
noncash expense related to the CBS agreement over the remaining term of that
agreement. Such network television advertising and on-air promotions, as well as
the association of the Company's brand with CBS, are important elements of the
Company's strategy to increase awareness of the SportsLine brand and build
traffic on its Web sites. The CBS agreement provides that the Company shall (i)
maintain and operate the Company's flagship Website, cbs.sportsline.com, in
accordance with guidelines and restrictions developed from time to time by the
Company and CBS (which would prohibit, among other things, the Company from
providing on cbs.sportsline.com gambling information or content, that is
sexually explicit, contains profanity, is slanderous or libelous or that
denigrates a particular group based on gender, race, creed, religion, sexual
preference or handicap) and (ii) cease using any content on cbs.sportsline.com
which CBS determines conflicts, interferes with or is detrimental to CBS's
reputation or business or which becomes subject to any third party restriction
or claim which would prohibit, limit or restrict the use of such content on the
Internet. Under the agreement, CBS has the right to receive 60% of the Company's
advertising revenue sold on cbs.sportsline.com pages related to certain
"signature events" and 50% of the Company's advertising revenue sold on
cbs.sportsline.com pages containing other CBS television-related sports content.
CBS has the right to terminate the agreement upon the acquisition by a CBS
competitor of 40% or more of the voting power of the Company's outstanding
equity securities or in certain other circumstances, including if the Company
breaches a material term or condition of the agreement or becomes insolvent or
subject to bankruptcy or similar proceedings. There can be no assurance that CBS
will perform its obligations under the agreement, or that the agreement will
significantly increase consumer awareness of the Company's brand or build
traffic on its Web sites. Any failure of CBS to perform its material obligations
under the agreement, or the termination of the agreement prior to the end of the
term in accordance with its terms, would have a material adverse effect on the
Company's business, results of operations and financial condition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Certain Transactions--CBS Agreement" and Note 5 of Notes to
Financial Statements.

DEPENDENCE ON STRATEGIC RELATIONSHIPS

In addition to its relationship with CBS, the Company has entered into
other strategic relationships with sports superstars, personalities,
organizations and affinity groups, commercial online services, third party Web
sites and developers of browsers and other Internet-based products to increase
awareness of its brand among consumers, to create revenue opportunities and to
obtain content for its Web sites. There can be no assurance that any party to a
strategic agreement with the Company will perform its obligations as agreed or
that any such agreement would be specifically enforceable by the Company. Many
of the Company's agreements with its strategic partners may be terminated by
either party on short notice. The failure to maintain its existing strategic
relationships, to establish additional strategic relationships or to fully
capitalize on any such relationship could have a material adverse effect on the
Company's business, results of operations and financial condition. See
"Business--Strategic Relationships."

INTENSE COMPETITION

<PAGE>

directly and indirectly, for advertisers, viewers, members, content providers,
merchandise sales and rights to sports events with the following categories of
companies: (i) online services or Web sites targeted to sports enthusiasts
generally (such as ESPN SportsZone and CNN and Sports Illustrated's CNN/SI) or
to enthusiasts of particular sports (such as Web sites maintained by Major
League Baseball, the NFL, the NBA and the NHL); (ii) publishers and distributors
of traditional off-line media (such as television, radio and print), including
those targeted to sports enthusiasts, many of which have established or may
establish Web sites; (iii) general purpose consumer online services such as
America Online, CompuServe and Microsoft Network, each of which provides access
to sports-related content and services; (iv) vendors of sports information,
merchandise, products and services distributed through other means, including
retail stores, mail, facsimile and private bulletin board services; and (v) Web
search and retrieval services, such as Excite, InfoSeek, Lycos and Yahoo!, and
other high-traffic Web sites, such as those operated by C|NET and Netscape. The
Company anticipates that the number of its direct and indirect competitors will
increase in the future. Management believes that the Company's most significant
competitors are ESPN SportsZone and CNN/SI, Web sites which offer a variety of
sports content.

Many of the Company's current and potential competitors have longer
operating histories, significantly greater financial, technical and marketing
resources, significantly greater name recognition and substantially larger user
or membership bases than the Company and, therefore, have a significantly
greater ability to attract advertisers and users. In addition, many of these
competitors may be able to respond more quickly than the Company to new or
emerging technologies and changes in Internet user requirements and to devote
greater resources than the Company to the development, promotion and sale of
their services. There can be no assurance that the Company's current or
potential competitors will not develop products and services comparable or
superior to those developed by the Company or adapt more quickly than the
Company to new technologies, evolving industry trends or changing Internet user
preferences. Increased competition could result in price reductions, reduced
margins or loss of market share, any of which would materially and adversely
affect the Company's business, results of operations and financial condition. In
addition, as the Company expands internationally it may face new competition.
There can be no assurance that the Company will be able to compete successfully
against current and future competitors, or that competitive pressures faced by
the Company would not have a material adverse effect on its business, results of
operations and financial condition. See "Business--Competition."

DEPENDENCE ON CONTENT PROVIDERS; SIGNIFICANT PAYMENTS REQUIRED TO BE MADE TO
CONTENT PROVIDERS; RISK OF THIRD PARTY CLAIMS

The Company relies on independent content providers for sports news,
scores, statistics and other sports information. The Company's future success
depends, in significant part, on its ability to maintain its existing
relationships with such content providers and to build new relationships with
other content providers. The Company's agreements with content providers
generally are short-term and may be terminated by the content provider if the
Company fails to fulfill its obligations under the applicable agreement. Some of
the Company's content providers compete with one another and, to some extent,
with the Company for advertising and members. Termination of one or more
significant content provider agreements would decrease the availability of
sports news and information which the Company can offer its customers and could
have a material adverse effect on the Company's business, results of operations
and financial condition.

The Company's agreements with most of its content providers are
nonexclusive, and many of the Company's competitors offer, or could offer,
content that is similar or the same as that obtained by the Company from such
content providers. In addition, the growing reach and use of the Internet have
further intensified competition in this industry. Consumers have gained free
access to certain information provided directly on the Internet by certain
content providers. To the extent that content providers, including but not
limited to the Company's current suppliers, provide information to users at a
lower cost than the Company or at minimal or no cost, the Company's business,
results of operations and financial condition could be materially adversely
affected.

<PAGE>

Fees payable to content providers constitute a significant portion of the
Company's cost of revenue. There can be no assurance that the Company's content
providers will enter into prospective agreements with the Company on the same or
similar terms as those currently in effect. If the Company is required to
increase the fees payable to its content providers, such increased payments
could have a material adverse effect on the Company's business, results of
operations and financial condition. Moreover, the Company may in the future be
subject to third party claims, for defamation, negligence, copyright or
trademark infringement or other theories based on the nature and content of
information supplied by its content providers, and any such claims may have a
material adverse effect on the Company's business, results of operations and
financial condition. See "--Intellectual Property; Risk of Third Party Claims
for Infringement," "--Liability for Information Retrieved from the Internet" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

TRADEMARK LITIGATION

On March 25, 1997, Weatherline, Inc. ("Weatherline"), a company that
provides pre-recorded weather and sports information by telephone, filed a
complaint against the Company in the United States District Court for the
Eastern District of Missouri. Weatherline owns a United States trademark
registration for the mark "Sportsline" for use in promoting the goods and
services of others by making sports information available to customers of
participating businesses through the telephone, and claims to have used the mark
for this purpose since 1968. The complaint alleges that the Company's use of the
mark "SportsLine USA" and other marks utilizing the term "SportsLine" infringes
upon and otherwise violates Weatherline's rights under its registered trademark
and damages Weatherline's reputation. The complaint seeks a preliminary and
permanent injunction against the Company from using marks containing the term
"Sportsline" or any other similar name or mark which would be likely to cause
confusion with Weatherline's mark. The complaint also seeks actual and punitive
damages and attorneys' fees. The Company believes that its use of the
"SportsLine" mark and "SportsLine" derivative marks does not infringe upon or
otherwise violate Weatherline's trademark rights. The Company has filed an
answer in which it denied all material allegations of the complaint and asserted
several affirmative defenses. The action is still in the discovery stage, and
both parties have agreed to attempt to settle the action through court-ordered
mediation. In the event the Company is unable to obtain a favorable settlement,
the Company intends to vigorously defend itself against the action. The legal
costs that may be incurred by the Company in defending itself against this
action could be substantial, and the litigation could be protracted and result
in diversion of management and other resources of the Company. In a separate
matter, a request for an extension of time to oppose the Company's application
to register the current version of the SportsLine USA logo has been filed by
Weatherline with the United States Patent and Trademark Office ("USPTO"). There
can be no assurance that the Company will prevail in the lawsuit or any related
opposition proceeding at the USPTO, and an adverse decision in this lawsuit
could result in the Company being prohibited from further use and registration
of the "SportsLine" mark and "SportsLine" derivative marks and being ordered to
pay substantial damages and attorneys' fees to Weatherline, either of which
could have a material adverse effect on the Company's business, results of
operations and financial condition.

INTELLECTUAL PROPERTY; RISK OF THIRD PARTY CLAIMS FOR INFRINGEMENT

The Company's performance and ability to compete are dependent to a
significant degree on its internally developed content and technology. The
Company relies on a combination of copyright and trademark laws, trade secret
protection, confidentiality and non-disclosure agreements with its employees and
with third parties and contractual provisions to establish and protect its
proprietary rights. There can be no assurance that the steps taken by the
Company to protect its proprietary rights will be adequate, that the Company
will be able to secure trademark registrations for all of its marks in the
United States and/or foreign countries, or that third parties will not infringe
upon or misappropriate the Company's copyrights, trademarks, service marks and
similar proprietary rights. In addition, effective copyright and trademark
protection may be unenforceable or limited in certain foreign countries, and the
global nature of the Internet makes it impossible to control the ultimate
destination

<PAGE>

of the Company's services. In the future, litigation may be necessary to enforce
and protect the Company's trade secrets, copyrights and other intellectual
property rights.

There can be no assurance that third parties will not bring copyright or
trademark infringement claims against the Company in addition to the lawsuit
filed by Weatherline referred to above, or claim that the Company's use of
certain technologies violates a patent. If it is determined that the Company has
infringed upon a third party's proprietary rights, there can be no assurance
that any necessary licenses or rights could be obtained on terms satisfactory to
the Company, if at all. The inability to obtain any required license on
satisfactory terms could have a material adverse effect on the Company's
business, results of operations and financial condition. The Company may also be
subject to litigation to defend against claims of infringement of the rights of
others or to determine the scope and validity of the intellectual property
rights of others. If competitors of the Company prepare and file applications in
the United States that claim trademarks used or registered by the Company, the
Company may oppose those applications and have to participate in proceedings
before the USPTO to determine priority of rights to the trademark, which could
result in substantial costs to the Company, even if the eventual outcome is
favorable to the Company. An adverse outcome could require the Company to
license disputed rights from third parties or to cease using such trademark. Any
such litigation would be costly and divert management's attention, either of
which could have a material adverse effect on the Company's business, results of
operations and financial condition. Adverse determinations in such litigation
could result in the loss of certain of the Company's proprietary rights, subject
the Company to significant liabilities, require the Company to seek licenses
from third parties, and prevent the Company from selling its services, any one
of which could have a material adverse effect on the Company's business, results
of operations and financial condition. In addition, inasmuch as the Company
licenses a substantial portion of its content from third parties, its exposure
to copyright infringement actions may increase because the Company must rely
upon such third parties for information as to the origin and ownership of such
licensed content. The Company generally obtains representations as to the
origins and ownership of such licensed content and generally obtains
indemnification to cover any breach of any such representations; however, there
can be no assurance that such representations will be accurate or that such
indemnification will provide adequate compensation for any breach of such
representations.

In 1996, the Company was issued a United States trademark registration for
its former SportsLine USA logo. The Company has applied to register in the
United States its current SportsLine USA logo and a number of other marks,
several of which include the term "SportsLine." The Company has filed
applications to register "SportsLine" marks in Australia and the United Kingdom.
There can be no assurance that the Company will be able to secure adequate
protection for these trademarks in the United States or in foreign countries.
Many foreign countries have a "first-to-file" trademark registration system and
thus the Company may be prevented from registering its marks in certain
countries if third parties have previously filed applications to register or
have registered the same or similar marks. It is possible that competitors of
the Company or others will adopt product or service names similar to the
Company's, thereby impeding the Company's ability to build brand identity and
possibly leading to customer confusion. The inability of the Company to protect
its "SportsLine" and other marks adequately would have a material adverse effect
on the Company's business, results of operations and financial condition.

As part of its confidentiality procedures, the Company generally enters
into agreements with its employees and consultants and limits access to and
distribution of its software, documentation and other proprietary information.
There can be no assurance that the steps taken by the Company will prevent
misappropriation of its technology or that agreements entered into for that
purpose will be enforceable. Notwithstanding the precautions taken by the
Company, it might be possible for a third party to copy or otherwise obtain and
use the Company's software or other proprietary information without
authorization or to develop similar software independently. Policing
unauthorized use of the Company's technology is difficult, particularly because
the global nature of the Internet makes it difficult to control the ultimate
destination or security of software or other data transmitted. The laws of other
countries may afford the Company little or no effective protection of its
intellectual property.

<PAGE>

The Company also relies on a variety of technology that it licenses from
third parties, including its Internet server software, which is used in the
Company's Web sites to perform key functions. There can be no assurance that
these third party technology licenses will continue to be available to the
Company on commercially reasonable terms. The loss of or inability of the
Company to maintain or obtain upgrades to any of these technology licenses could
materially adversely affect the Company's business, results of operations and
financial condition.

MANAGEMENT OF GROWTH

The Company has rapidly and significantly expanded its operations and
anticipates that significant expansion of its operations will continue to be
required in order to address potential market opportunities. The Company
expanded from five employees at January 1, 1995 to 197 employees at September
30, 1997, and the Company expects to add additional key personnel in the near
future. Such growth has placed, and any future growth may continue to place,
substantial strain on the Company's management, operational and financial
resources and systems. To manage its growth, the Company must implement, improve
and effectively utilize its operational, management, marketing and financial
systems and train and manage its employees. In addition, it may become necessary
for the Company to increase the capacity of its software, hardware and
telecommunications systems on short notice. There can be no assurance that the
Company will be able to effectively manage the expansion of its operations or
that the Company's systems or procedures or controls will be adequate to support
the Company's operations. Any failure of management to effectively manage the
Company's growth would have a material adverse effect on the Company's business,
results of operations and financial condition.

RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION

The Company intends to expand internationally and expects that its
international operations will be subject to most of the risks inherent in its
business generally. In addition, there are certain risks inherent in doing
business in international markets, such as changes in regulatory requirements,
tariffs and other trade barriers, fluctuations in currency exchange rates,
potentially adverse tax consequences and difficulties in managing or overseeing
foreign operations, and there are likely to be different consumer preferences
and requirements in such markets. There can be no assurance that one or more of
such factors would not have a material adverse effect on the Company's current
or future international operations and, consequently, on the Company's business,
results of operations and financial condition.

RISK OF SYSTEM FAILURE, DELAYS AND INADEQUACY

The performance of the Company's Web sites is critical to its reputation
and ability to attract and retain users, advertisers and members. Services based
on sophisticated software and computer systems often encounter development
delays and the underlying software may contain undetected errors or failures
when introduced. Any system error or failure that causes interruption in
availability or an increase in response time could result in a loss of potential
or existing users, advertisers or members and, if sustained or repeated, could
reduce the attractiveness of the Company's Web sites to users and advertisers. A
sudden and significant increase in the number of users of the Company's Web
sites also could strain the capacity of the software, hardware or
telecommunications systems deployed by the Company, which could lead to slower
response time or system failures. In addition, if the number of Web pages or
users of the Company's Web sites increases substantially, there can be no
assurance that the Company's hardware and software infrastructure will be able
to adequately handle the increased demand. The Company's operations also are
dependent upon receipt of timely feeds and computer downloads from its content
providers, and any failure or delay in the transmission or receipt of such feeds
and downloads, whether on account of system failure of the Company, its content
providers, the public network or otherwise, could disrupt the Company's
operations. Any failure or delay that causes interruptions in the Company's
operations could have a material adverse effect on the Company's business,
results of operations and financial condition. The Company relies on private
third party providers to provide it with access to the Internet. Any disruption
in the Company's Internet access or

<PAGE>

any failure of the Company's third party provider to handle higher volumes of
users could have a material adverse effect on the Company's business, results of
operations and financial condition. The Company is also dependent upon Web
browsers and Internet service providers ("ISPs") and online service providers
("OSPs") to provide Internet users access to the Company's Web sites, and
members and users may experience difficulties accessing or using the Company's
Web sites due to system failures or delays unrelated to the Company's systems.

The Company's operations are dependent on its ability to maintain its
computer and telecommunications equipment in effective working order and to
protect its systems against damage from fire, hurricanes, power loss,
telecommunications failure, break-ins, computer viruses and other events beyond
the Company's control. Although the Company has developed an out-of-state
disaster recovery plan to respond to system failures and also maintains property
insurance for its equipment, there can be no assurance that the Company's
disaster recovery plan is capable of being implemented successfully, if at all,
or that such insurance will be adequate to compensate the Company for all losses
that may occur or to provide for costs associated with business interruption.
Any damage or failure that causes system disruptions or other significant
interruptions in the Company's operations could have a material adverse effect
on the Company's business, results of operations and financial condition.

DEPENDENCE ON KEY PERSONNEL

The Company's future success depends, in significant part, upon the
continued service of its senior management and other key personnel. The Company
maintains $2 million of key man life insurance covering Michael Levy, the
Company's President and Chief Executive Officer. However, the loss of the
services of Mr. Levy or one or more of the Company's other executive officers or
key employees could have a material adverse effect on the Company, and there can
be no assurance that the Company will be able to retain its key personnel.
See "Management--Executive Officers and Directors."

The Company's future success also depends on its continuing ability to
attract and retain highly qualified technical, editorial and managerial
personnel. Competition for such personnel is intense, and the Company has, at
times, experienced difficulties in attracting the desired number of such
individuals. There can be no assurance that the Company will be able to attract
or retain a sufficient number of highly qualified employees in the future. If
the Company is unable to hire and retain personnel in key positions, the
Company's business, results of operations and financial condition could be
materially adversely affected.

RISKS RELATED TO THE INTERNET INDUSTRY

EMERGING MARKET FOR THE COMPANY'S SERVICES

The Company operates in a market that is at a very early stage of
development, is rapidly evolving and is characterized by an increasing number of
market entrants who have introduced or developed competing products and
services. As is typical in the case of a new and rapidly evolving industry,
demand and market acceptance for recently introduced products and services are
subject to a high level of uncertainty and risk. Because the market for the
Company's Web sites is new and evolving, it is difficult to predict, with any
assurance, the size of this market and its growth rate, if any. In addition, it
is not known whether individuals will utilize the Internet to any significant
degree as a means of purchasing goods and services. The adoption of the Internet
for commerce, particularly by those individuals and companies which historically
have relied upon traditional means of commerce, will require a broad acceptance
of new methods of conducting business and exchanging information. There can be
no assurance that the market for the Company's Web sites will develop or that
demand for the Company's service will emerge or be sustainable. If the market
fails to develop, develops more slowly than expected or becomes saturated with
competitors, or if the Company's Web sites do not achieve or sustain market
acceptance, the Company's business, results of operations and financial
condition would be materially adversely affected.

<PAGE>

DEPENDENCE ON ADOPTION OF THE INTERNET AS AN ADVERTISING MEDIUM; RELIANCE ON
SHORT-TERM ADVERTISING CONTRACTS; COMPETITION FOR ADVERTISERS

The Company expects to derive a substantial portion of its revenue from the
sale of advertisements on its Web sites. The Company's ability to generate
advertising revenue will depend on, among other factors, the development of the
Internet as an advertising medium, the amount of traffic on and the membership
bases of the Company's Web sites and the Company's ability to achieve and
demonstrate user and member demographic characteristics that are attractive to
advertisers. Most potential advertisers and their advertising agencies have only
limited experience with the Internet as an advertising medium and have not
devoted a significant portion of their advertising expenditures to
Internet-based advertising. There can be no assurance that advertisers or
advertising agencies will be persuaded to allocate or continue to allocate
portions of their budgets to Internet-based advertising or, if so persuaded,
that they will find such advertising to be effective for promoting their
products and services relative to traditional print and broadcast media. No
standards have yet been widely accepted for the measurement of the effectiveness
of Internet-based advertising, and there can be no assurance that such standards
will develop sufficiently to support Internet-based advertising as a significant
advertising medium. In addition, the widespread adoption of technologies that
permit Internet users to selectively block out unwanted graphics, including
advertisements, attached to Web pages could adversely affect the growth of the
Internet as an advertising medium. Acceptance of the Internet among advertisers
and advertising agencies will also depend, to a large extent, on the level of
use of the Internet by consumers, which is highly uncertain, and upon growth in
the commercial use of the Internet. If widespread commercial use of the Internet
does not develop, or if the Internet does not develop as an effective and
measurable medium for advertising, the Company's business, results of operations
and financial condition would be materially adversely affected.

The Company's advertising revenue to date has been derived under short-term
contracts. Consequently, the Company's advertising customers can move their
advertising to competing Web sites or to other media quickly and without
penalty, thereby increasing the Company's exposure to competitive pressures.
There can be no assurance that the Company's current advertisers will continue
to purchase advertisements, or that the Company will be able to secure new
advertising contracts from existing or future customers at attractive rates or
at all. Any failure of the Company to achieve sufficient advertising revenue
would have a material adverse effect on the Company's business, results of
operations and financial condition.

There is intense competition for the sale of advertising on high-traffic
Web sites, which has resulted in a wide range of rates quoted by different
vendors for a variety of advertising services, making it difficult to project
levels of Internet advertising that will be realized generally or by any
specific company. Competition for advertisers among present and future Web
sites, as well as competition with other traditional media for advertising
placements, could result in significant price competition. Most of the Company's
advertisements to date have been sold on the basis of the number of
"impressions," or times that an advertisement appears in page views downloaded
by users, rather than on the number of "click-throughs," or user requests for
additional information made by clicking on the advertisement. There can be no
assurance that the Company's future advertising customers will continue to pay
on a per-impression basis rather than on a "click-through" basis. In addition,
there can be no assurance that the Company's advertising customers will accept
the internal and third-party measurements of impressions received by
advertisements on the Company's Web sites, or that such measurements will not
contain errors. The foregoing factors and uncertainties could have a material
adverse effect on the Company's business, results of operations and financial
condition. See "Business--Advertising and Sales."

DEPENDENCE ON CONTINUED GROWTH IN USE OF THE INTERNET

The Company's success is highly dependent upon continued growth in the use
of the Internet generally and, in particular, as a medium for advertising,
information services and commerce. Use of the Internet by consumers is at a very
early stage of development, and market acceptance of the Internet as

<PAGE>

a medium for advertising, information services and commerce is subject to a high
level of uncertainty. The rapid growth of global commerce and the exchange of
information on the Internet and other online services is new and evolving,
making it difficult to predict whether the Internet will prove to be a viable
commercial marketplace. The Company believes that its future success will
require the development and widespread acceptance of the Internet and online
services as a medium for advertising and commerce. In particular, the Company's
future financial success will be dependent on the sale of advertising on its Web
sites and its ability to attract and retain paying members and to sell
merchandise and premium services. There can be no assurance that the Internet
will be a successful commerce and information channel. The Internet may not
prove to be a viable commercial marketplace due to inadequate development of the
necessary infrastructure, such as reliable network backbones, or complementary
services, such as high speed modems and security procedures for financial
transactions. Consumer concern over Internet security has been, and could
continue to be, a barrier to commercial activities requiring consumers to send
their credit card information over the Internet. The Internet has experienced,
and is expected to continue to experience, significant growth in the number of
users and amount of traffic. There can be no assurance that the Internet
infrastructure will continue to be able to support the demands placed on it by
sustained growth.

RISKS ASSOCIATED WITH TECHNOLOGICAL CHANGE

The Internet industry is characterized by rapid technological developments,
evolving industry standards, changes in user and customer requirements, frequent
new service and product introductions and enhancements. The introduction of
services or products embodying new technologies or the emergence of new industry
standards and practices could render the Company's existing Web sites and
proprietary technology obsolete and unmarketable or require significant
unanticipated investments in product development. The Company's performance will
depend, in part, on its ability to license leading technologies, enhance its
existing services, develop new proprietary technologies that address the
increasingly sophisticated and varied needs of Web users and advertisers and
respond to technological advances and emerging industry standards and practices
on a timely and cost-effective basis. The development of Web sites and other
proprietary technologies entails significant technical and business risks. There
can be no assurance that the Company will be successful in using new
technologies effectively or adapting its Web sites and proprietary technologies
to customer requirements or emerging industry standards. If the Company is
unable, for technical, legal, financial or other reasons, to adapt in a timely
manner in response to technological developments, evolving industry standards,
changing market conditions or customer requirements, or if the Company's Web
sites do not achieve market acceptance, the Company's business, results of
operations and financial condition would be materially adversely affected.

INTERNET COMMERCE SECURITY RISKS

A significant barrier to electronic commerce and communications is the
secure transmission of confidential information over public networks. The
Company relies on encryption and authentication technology licensed from third
parties to provide the security and authentication necessary to effect secure
transmission of confidential information. There can be no assurance that
advances in computer capabilities, new discoveries in the field of cryptography
or other events or developments will not result in a compromise or breach of the
algorithms used by the Company to protect customer transaction data. If any such
compromise of the Company's security were to occur it could have a material
adverse effect on the Company's business, results of operations and financial
condition. A party who is able to circumvent the Company's security measures
could misappropriate proprietary information or cause interruptions in the
Company's operations. The Company may be required to expend significant capital
and other resources to protect against the threat of such security breaches or
to alleviate problems caused by such breaches. Concerns over the security of
Internet transactions and the privacy of users may also inhibit the growth of
the Internet generally, and the Web in particular, especially as a means of
conducting commercial transactions. To the extent that activities of the Company
or third party contractors involve the storage and transmission of proprietary
information, such as credit card numbers, security breaches could expose the
Company to a risk of loss or litigation and possible

<PAGE>

liability. There can be no assurance that the Company's security measures will
prevent security breaches or that failure to prevent such security breaches
would not have a material adverse effect on the Company's business, results of
operations and financial condition.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

The Company is subject to various laws and governmental regulations
applicable to businesses generally. The Company believes it is currently in
compliance with such laws and that such laws do not have a material impact on
its operations. In addition, although there are currently few laws or
regulations directly applicable to access to or commerce on the Internet, due to
the increasing popularity and use of the Internet, it is possible that more
stringent consumer protection laws and regulations may be adopted with respect
to the Internet, covering issues such as user privacy and expression, pricing,
intellectual property, information security, anti-competitive practices, the
convergence of traditional channels with Internet commerce, characteristics and
quality of products and services and the taxation of subscription fees or gross
receipts of ISPs. On June 26, 1997, the United States Supreme Court held
unconstitutional provisions of the Communications Decency Act of 1996, which,
among other things, imposed criminal penalties on anyone who distributes
obscene, lascivious or indecent communications over the Internet. The enactment
or enforcement of other federal or state laws or regulations in the future may
increase the Company's cost of doing business or decrease the growth of the
Internet and could in turn decrease the demand for the Company's products and
services, increase the Company's costs, or otherwise have an adverse effect on
the Company's business, results of operations and financial condition. Moreover,
the applicability to the Internet of existing laws in various jurisdictions
governing issues such as property ownership, libel and personal privacy is
uncertain, may take years to resolve and could expose the Company to substantial
liability for which the Company might not be indemnified by the content
providers or other third parties. Any such new legislation or regulation or the
application of existing laws and regulations to the Internet could have a
material adverse effect on the Company's business, results of operations and
financial condition.

The Company's contests and sweepstakes may be subject to state and federal
laws governing lotteries and gambling. The Company seeks to design its contest
and sweepstakes rules to fall within exemptions from such laws and restricts
participation to individuals over 18 years of age who reside in jurisdictions
within the United States and Canada in which the contests and sweepstakes are
lawful. There can be no assurance that the Company's contests and sweepstakes
will be exempt from such laws or that the applicability of such laws to the
Company would not have a material adverse effect on the Company's business,
results of operations and financial condition.

Tax authorities in a number of states are currently reviewing the
appropriate tax treatment of companies engaged in Internet commerce. New state
tax regulations may subject the Company to additional state sales and income
taxes. As the Company's service is available over the Internet in multiple
states and foreign countries, such jurisdictions may claim that the Company is
required to qualify to do business as a foreign corporation in each such state
and foreign country. The failure by the Company to qualify as a foreign
corporation in a jurisdiction where it is required to do so could subject the
Company to taxes and penalties for the failure to qualify. It is possible that
the governments of other states and foreign countries also might attempt to
regulate the Company's transmissions of content on its Web sites or prosecute
the Company for violations of their laws. There can be no assurance that
violations of local laws will not be alleged or charged by state or foreign
governments, that the Company might not unintentionally violate such law or that
such laws will not be modified, or new laws enacted, in the future.

In addition, several telecommunications carriers are seeking to have
telecommunications over the Internet regulated by the Federal Communications
Commission (the "FCC") in the same manner as other telecommunications services.
For example, America's Carriers Telecommunications Association has filed a
petition with the FCC for this purpose. In addition, because the growing
popularity and use of the Internet has burdened the existing telecommunications
infrastructure and many areas with high Internet use have begun to experience
interruptions in phone service, local telephone carriers, such as

<PAGE>

Pacific Bell, have petitioned the FCC to regulate ISPs and OSPs in a manner
similar to long distance telephone carriers and to impose access fees on the
ISPs and OSPs. If either of these petitions are granted, or the relief sought
therein is otherwise granted, the costs of communicating on the Internet could
increase substantially, potentially slowing the growth in use of the Internet.
Any such new legislation or regulation or application or interpretation of
existing laws could have a material adverse effect on the Company's business,
results of operations and financial condition.

LIABILITY FOR INFORMATION RETRIEVED FROM THE INTERNET

Due to the fact that materials may be downloaded from Web sites operated by
the Company and may be subsequently distributed to others, there is a potential
that claims will be made against the Company for defamation, negligence,
copyright or trademark infringement or other theories based on the nature and
content of such materials. Such claims have been brought, sometimes
successfully, against online services in the past. In addition, the Company
could be subject to liability with respect to content that may be accessible
through the Company's Web sites or third party Web sites linked from the
Company's Web sites. For example, claims could be made against the Company if
material deemed inappropriate for viewing by children could be accessed through
the Company's Web sites. Although the Company carries general liability
insurance, the Company's insurance may not cover potential claims of this type
or may not be adequate to cover all costs incurred in defense of potential
claims or to indemnify the Company for all liability that may be imposed. Any
costs or imposition of liability that is not covered by insurance or in excess
of insurance coverage could have a material adverse effect on the Company's
business, results of operations and financial condition.

RISKS RELATED TO THE OFFERING

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that an active public market for the Common
Stock will develop or be sustained after this offering. The initial public
offering price was determined by negotiation between the Company and the
representatives of the Underwriters based upon several factors and may not be
indicative of future market prices. See "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price. The
trading price of the Company's Common Stock could be subject to fluctuations in
response to quarterly variations in results of operations, announcements of
technological innovations or new services or products by the Company or its
competitors, changes in financial estimates by securities analysts, the
operating and stock price performance of other companies and other events or
factors. In addition, the stock market has experienced volatility that has
particularly affected the market prices of equity securities of companies within
certain industry groups such as technology companies generally and
Internet-related companies in particular, and that often has been unrelated to
the operating performance of such companies. These broad market fluctuations may
materially adversely affect the trading price of the Company's Common Stock.

CONTROL BY EXISTING SHAREHOLDERS

Upon completion of this offering, the Company's present directors and
executive officers, greater than 5% shareholders and their respective affiliates
will beneficially own approximately 50.6% of the outstanding Common Stock
(approximately 48.8% of the outstanding Common Stock assuming full exercise of
the Underwriters' overallotment option). As a result, these shareholders, if
they act as a group, will be able to control all matters requiring shareholder
approval, including the election of directors and approval of significant
corporate transactions. Such control may have the effect of delaying or
preventing a change in control of the Company. See "Management," "Principal
Shareholders" and "Description of Capital Stock."

<PAGE>

MANAGEMENT'S DISCRETION AS TO USE OF UNALLOCATED NET PROCEEDS

The Company has not designated any specific use for the net proceeds from
the sale by the Company of the Common Stock offered hereby. Rather, the Company
intends to use the net proceeds from this offering for working capital and other
general corporate purposes, including expansion of the Company's marketing and
advertising sales efforts, content development and licensing, international
expansion and capital expenditures. A portion of the net proceeds also may be
used for the acquisition of or investments in businesses, products and
technologies that are complementary to those of the Company. Consequently, the
Board of Directors and management of the Company will have significant
flexibility in applying the net proceeds of this offering. The failure of
management to apply such funds effectively could have a material adverse effect
on the Company's business, results of operations and financial condition. See
"Use of Proceeds."

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF DELAWARE LAW AND THE COMPANY'S
CHARTER AND BYLAWS

The Company is organized under the laws of the State of Delaware. Certain
provisions of Delaware law may have the effect of delaying, deferring or
preventing a change in control of the Company. In addition, certain provisions
of the Company's Amended and Restated Certificate of Incorporation (the
"Certificate") and Amended and Restated Bylaws (the "Bylaws") may be deemed to
have anti-takeover effects and may delay, defer or prevent a takeover attempt
that a shareholder might consider in its best interest. The Certificate will
authorize the Board to determine the rights, preferences, privileges and
restrictions of unissued series of preferred stock and to fix the number of
shares of any series of preferred stock and the designation of any such series,
without any vote or action by the Company's shareholders. Thus, the Board can
authorize and issue shares of preferred stock with voting or conversion rights
that could adversely affect the voting or other rights of holders of the
Company's Common Stock. In addition, the issuance of preferred stock may have
the effect of delaying, deferring or preventing a change of control of the
Company, since the terms of the preferred stock that might be issued could
potentially prohibit the Company's consummation of any merger, reorganization,
sale of substantially all of its assets, liquidation or other extraordinary
corporate transaction without the approval of the holders of the outstanding
shares of the Common Stock. Other provisions of the Certificate and Bylaws will
(i) divide the Company's Board of Directors into three classes, each of which
will serve for different three-year periods, (ii) provide that the shareholders
may not take action by written consent, but only at duly called annual or
special meetings of shareholders, (iii) provide that special meetings of the
shareholders may be called only by the Chairman of the Board of Directors or a
majority of the entire Board of Directors and (iv) establish certain advance
notice procedures for nomination of candidates for election as directors and for
shareholder proposals to be considered at annual shareholders' meetings. See
"Description of Capital Stock--Anti-takeover Effects of Certain Provisions of
Delaware Law and the Company's Certificate of Incorporation and Bylaws."

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS; FUTURE EQUITY ISSUANCES

Sales of substantial amounts of Common Stock in the public market following
this offering, or the perception that such sales will occur, could have a
material adverse effect on the market price of the Company's Common Stock. After
the completion of this offering, 13,632,523 shares of Common Stock will be
outstanding. Of such shares, only the 3,500,000 shares sold pursuant to this
offering will be tradable in the public market without restriction. The
remaining 10,132,523 shares of Common Stock to be outstanding after the offering
are "restricted securities" within the meaning of Rule 144 ("Rule 144") under
the Securities Act of 1933, as amended (the "Securities Act"), and may not be
publicly resold, except in compliance with the registration requirements of the
Securities Act or pursuant to an exemption from registration, including that
provided by Rule 144.

Beginning 90 days after the date of this Prospectus, 9,289,549 of these
remaining 10,132,523 shares will be eligible for resale in the public market,
subject to certain volume, timing and other requirements of Rule 144 and to the
lock-up agreements described below. The remaining 842,974 shares of currently
outstanding Common Stock and 2,204,000 shares issuable upon exercise of options
and warrants which

<PAGE>

will vest after such 90 day period will become eligible for resale pursuant to
Rule 144 and Rule 701 at various times within the next year, and some of such
shares could be sold earlier if the holders exercise their registration rights
described below. In addition, beginning 90 days after the date of this
Prospectus, an additional 754,980 shares issuable upon exercise of options and
warrants which will be vested at such time will be eligible for resale in the
public market, subject to compliance with Rule 144 and Rule 701 under the
Securities Act and to the lock-up agreements described below.

The Company and certain of its existing shareholders (holding an aggregate
of 10,041,822 shares of Common Stock), and Intel and Mitsubishi, have agreed not
to offer, sell or contract to sell or otherwise dispose of any Common Stock for
a period of 180 days after the date of this Prospectus without the prior written
consent of BancAmerica Robertson Stephens, subject to certain exceptions. In its
sole discretion, and at any time without notice, BancAmerica Robertson Stephens
may release all or any portion of the shares subject to such lock-ups.

The holders of 5,798,434 shares of Common Stock have the right in certain
circumstances to require the Company to register their shares under the
Securities Act for resale to the public. If such holders, by exercising their
demand registration rights, cause a large number of shares to be registered and
sold in the public market, such sales could have a material adverse effect on
the market price for the Company's Common Stock. If the Company were required to
include in a Company-initiated registration statement shares held by such
holders pursuant to the exercise of their piggyback registration rights, such
sales may have an adverse effect on the Company's ability to raise needed
capital. In addition, within approximately 180 days after the date of this
Prospectus, the Company expects to register under the Securities Act a total of
5,562,188 shares of Common Stock subject to outstanding stock options and
warrants or reserved for issuance under the Company's stock plans.

In connection with entering into strategic relationships, particularly with
athletes, the Company has issued and may continue to issue warrants to purchase
significant amounts of Common Stock. The issuance of significant amounts of
warrants in the future, particularly warrants with exercise prices below the
fair market value of the Common Stock at the time of issuance, could have a
material adverse effect on the Company's results of operations or financial
condition, or on the market price for the Company's Common Stock. See "Shares
Eligible for Future Sale."

IMMEDIATE AND SUBSTANTIAL DILUTION

Investors participating in the initial public offering will incur an
immediate, substantial dilution of $5.18 in the net tangible book value per
share of the Common Stock from the initial public offering price. To the extent
that the Company issues additional shares of Common Stock pursuant to its
agreement with CBS, or other outstanding options or warrants to purchase Common
Stock are exercised, there will be further dilution. See "Dilution."

<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 3,500,000 shares of
Common Stock offered by the Company hereby are estimated to be $24,988,000
($28,894,000 if the Underwriters' over-allotment option is exercised in full),
after deducting underwriting discounts and commissions, the fee paid to the
placement agents and estimated offering expenses payable by the Company.

The Company intends to use the net proceeds from this offering for working
capital and other general corporate purposes, including expansion of the
Company's marketing and advertising sales efforts, content development and
licensing, international expansion and capital expenditures. From time to time,
the Company expects to evaluate possible acquisitions of or investments in
businesses, products and technologies that are complementary to those of the
Company, for which a portion of the net proceeds of this offering may be used.
The Company presently has no commitments or understandings for any such
acquisitions, and is not presently engaged in any negotiations for any such
acquisitions, and no portion of the net proceeds has been allocated for any
specific acquisition. Pending such uses, the Company intends to invest the net
proceeds from this offering in investment-grade, interest-bearing securities.

DIVIDEND POLICY

The Company has never paid any cash dividends on its Common Stock and does
not anticipate paying any cash dividends in the foreseeable future. The Company
currently intends to retain future earnings, if any, to fund the development and
growth of its business. In addition, the Company's equipment line of credit
contains covenants that restrict the Company from paying dividends in excess of
$750,000 without the lender's prior written consent. See Note 5 of Notes to
Financial Statements.

<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
September 30, 1997 (i) on an actual basis, and (ii) on a pro forma as adjusted
basis to reflect the conversion into Common Stock of all of the Company's
outstanding preferred stock upon the completion of this offering, the sale of
2,693,549 shares of Common Stock offered hereby at the initial public offering
price and 806,451 shares of Common Stock offered hereby at a price per share
equal to the initial public offering price less underwriting discounts and
commissions, and the application of the estimated net proceeds therefrom. See
"Use of Proceeds." This table should be read in conjunction with the Company's
Financial Statements and Notes thereto appearing elsewhere in this Prospectus.

SEPTEMBER 30, 1997
---------------------------
PRO FORMA
ACTUAL AS ADJUSTED
------------ ------------
(Unaudited)
(In thousands)
<S> <C> <C>
Long-term obligations, net of current maturities ........................... $ 390 $ 390
--------- ---------
Shareholders' equity (1):
Preferred stock, $0.01 par value; no shares authorized, issued or outstanding
actual; 1,000,000 shares authorized, none issued and outstanding pro
forma as adjusted ...................................................... -- --
Convertible preferred stock, $0.01 par value; issued in series; 3,000,000
Series A shares authorized, issued and outstanding actual; 6,162,776 Series B
shares authorized, issued and outstanding actual; 5,333,333 Series C shares
authorized, issued and outstanding actual; none
authorized, issued or outstanding pro forma as adjusted .................. 145 --
Common stock, $0.01 par value; 50,000,000 shares authorized, 4,334,089
shares issued and outstanding, actual; 13,632,523 shares issued and
outstanding pro forma as adjusted ....................................... 43 136
Additional paid-in capital ................................................ 50,785 75,825
Accumulated deficit ...................................................... (37,579) (37,579)
--------- ---------
Total shareholders' equity ................................................ 13,394 38,382
--------- ---------
Total capitalization ................................................... $ 13,784 $ 38,772
========= =========
</TABLE>

- ----------------
(1) Excludes 1,096,792 shares of Common Stock issuable pursuant to stock options
outstanding as of September 30, 1997 (of which options to purchase
approximately 280,300 shares were exercisable) with a weighted average
exercise price of $4.69 per share and 1,862,188 shares of Common Stock
issuable upon the exercise of warrants outstanding as of September 30, 1997
(of which warrants to purchase approximately 1,432,200 shares were
exercisable) with a weighted average exercise price of $6.93 per share. See
"Management--Stock Plans" and "Description of Capital Stock--Options and
Warrants." Also excludes 3,867,727 shares of Common Stock issuable pursuant
to the Company's agreement with CBS (including 1,520,000 shares issuable
upon the exercise of warrants to be granted to CBS). See "Certain
Transactions--CBS Agreement."

<PAGE>

DILUTION

The pro forma net tangible book value of the Company as of September 30,
1997, after giving effect to the conversion of all outstanding shares of
preferred stock into Common Stock, was $13,394,325, or $1.32 per share of Common
Stock. Pro forma net tangible book value per share is equal to the Company's
total tangible assets less total liabilities, divided by the total pro forma
number of shares of Common Stock outstanding. After giving effect to the sale of
2,693,549 shares of Common Stock offered hereby at the initial public offering
price and 806,451 shares of Common Stock offered hereby at a price per share
equal to the initial public offering price less underwriting discounts and
commissions, and the application of the estimated net proceeds therefrom, the
pro forma net tangible book value of the Company as of September 30, 1997 would
have been $38,382,712, or $2.82 per share. This represents an immediate increase
in such pro forma net tangible book value of $1.50 per share to existing
stockholders and an immediate dilution of $5.18 per share to new investors
purchasing shares in this offering. The following table summarizes, on a pro
forma basis as of September 30, 1997, this per share dilution:

<TABLE>

<S> <C> <C>
Assumed initial public offering price per share .................................... $ 8.00
Pro forma net tangible book value per share as of September 30, 1997 ............ $ 1.32
Increase in net tangible book value per share attributable to new investors ...... 1.50
-------
Pro forma net tangible book value per share as of September 30, 1997 after offering 2.82
-------
Dilution per share to investors ................................................... $ 5.18
=======
</TABLE>

The following table summarizes on a pro forma basis as of September 30,
1997, the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company and the average price paid per share by
existing stockholders and by the anticipated purchasers of the shares of Common
Stock offered hereby, and before deducting underwriting discounts and
commissions, the fee paid to the placement agents and estimated offering
expenses payable by the Company:

SHARES PURCHASED TOTAL CONSIDERATION (1)
------------------------ ------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ --------- ------------- --------- --------------
<S> <C> <C> <C> <C> <C>
Existing shareholders ...... 10,132,523 74.3% $48,247,795 63.7% $4.76
Intel and Mitsubishi ......... 806,451 5.9 5,999,995 7.9 7.44
Other investors ............ 2,693,549 19.8 21,548,392 28.4 8.00
----------- ------ ------------ ------
Total ..................... 13,632,523 100.0% $75,796,182 100.0%
=========== ====== ============ ======
</TABLE>

- ----------------
(1) See Note 5 of Notes to Financial Statements for a discussion of certain
non-cash consideration received by the Company in exchange for the issuance
of shares of Common Stock.

The above computations exclude (i) 1,096,792 shares of Common Stock
issuable pursuant to stock options outstanding as of September 30, 1997 (of
which options to purchase approximately 280,300 shares were exercisable) with a
weighted average exercise price of $4.69 per share and (ii) 1,862,188 shares of
Common Stock issuable upon the exercise of warrants outstanding as of September
30, 1997 (of which warrants to purchase approximately 1,432,200 shares were
exercisable) with a weighted average exercise price of $6.93 per share. The
above computations also exclude 3,867,727 shares of Common Stock issuable
pursuant to the Company's agreement with CBS (including 1,520,000 shares
issuable upon the exercise of warrants to be granted to CBS). To the extent that
any of the foregoing options or warrants are exercised, or additional shares are
issued to CBS there will be further dilution to new investors. In addition, in
April 1997, the Company's Board of Directors approved the 1997 Incentive
Compensation Plan (the "Incentive Plan") under which an additional 2,000,000
shares of Common Stock have been reserved for issuance and the 1997 Employee
Stock Purchase Plan, under which an additional 500,000 shares of Common Stock
have been reserved for issuance. Furthermore, under the Incentive Plan an
additional number of options may be granted equal to the number of shares of
Common Stock with respect to awards previously granted under the Incentive Plan
that terminate without being exercised, expire, are forfeited or canceled, and

<PAGE>

the number of shares of Common Stock that are surrendered in payment of any
awards or any tax withholding requirements. See "Certain Transactions--CBS
Agreement," "Management--Stock Plans" and "Description of Capital Stock--Options
and Warrants."

<PAGE>

SELECTED FINANCIAL DATA

The selected balance sheet data set forth below as of December 31, 1995 and
1996, and the selected statement of operations data for the period from February
23, 1994 (Inception) through December 31, 1994 and the years ended December 31,
1995 and December 31, 1996 have been derived from the Company's audited
financial statements, which statements have been audited by Arthur Andersen LLP,
independent certified public accountants, and appear elsewhere in this
Prospectus. The selected balance sheet data as of September 30, 1997 and the
selected statements of operations data for the nine months ended September 30,
1996 and 1997 have been derived from the unaudited financial statements of the
Company which, in the opinion of management, include all adjustments (consisting
of only normal recurring adjustments) necessary for a fair presentation of the
information set forth therein. The results of operations for the nine months
ended September 30, 1997 are not necessarily indicative of the results for the
full year. The following data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's Financial Statements and Notes thereto included elsewhere in this
Prospectus.

<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue .............................. $ -- $ 52 $ 2,437 $ 1,173 $ 5,867
Cost of revenue ..................... -- 757 3,395 2,165 4,858
---------- ---------- ---------- ---------- ----------
Gross margin (deficit) ............... -- (705) (958) (992) 1,009
Operating expenses:
Product development ............... 58 633 939 728 941
Sales and marketing .................. 59 1,179 5,568 3,431 6,956
General and administrative ......... 309 2,662 4,795 3,059 5,163
Depreciation and amortization ...... 16 193 824 502 7,436
---------- ---------- ---------- ---------- ----------
Total operating expenses ......... 442 4,667 12,126 7,720 20,496
---------- ---------- ---------- ---------- ----------
Loss from operations ............... (442) (5,372) (13,084) (8,712) (19,487)
Interest expense ..................... -- (50) (136) (99) (51)
Interest and other income, net ...... 38 92 365 156 548
---------- ---------- ---------- ---------- ----------
Net loss ........................... $ (404) $ (5,330) $ (12,855) $ (8,655) $ (18,990)
========== ========== ========== ========== ==========
Net loss per share (1)(2) ............ $ (0.19) $ (1.42) $ (1.92) $ (1.44) $ (1.92)
========== ========== ========== ========== ==========
Weighted average common and
common equivalent shares
outstanding (1)(2) .................. 2,071,869 3,748,241 6,681,043 6,019,951 9,867,677
========== ========== ========== ========== ==========
</TABLE>

DECEMBER 31,
---------------------------------- SEPTEMBER 30,
1994 1995 1996 1997
-------- ----------- --------- --------------
(Unaudited)
(In thousands)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .............................. $1,666 $ 184 $13,994 $ 8,115
Working capital (deficit) .............................. 1,656 (1,944) 11,779 9,279
Total assets .......................................... 1,962 2,496 17,850 18,761
Long-term obligations, net of current maturities ...... -- 684 409 390
Total shareholders' equity (deficit) .................. 1,910 (452) 14,273 13,394
</TABLE>

- ----------------
(1) See Note 2 of Notes to Financial Statements for an explanation of the
determination of the weighted average common and common equivalent shares
used to compute net loss per share.
<PAGE>

(2) Gives effect to the conversion of all outstanding shares of the Company's
preferred stock into 5,798,434 shares of Common Stock upon completion of
this offering.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE
RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN
THIS PROSPECTUS. THE FOLLOWING DISCUSSION ALSO SHOULD BE READ IN CONJUNCTION
WITH THE FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS
PROSPECTUS.

OVERVIEW

SportsLine USA is a leading Internet-based sports media company that
provides branded, interactive information and programming as well as merchandise
to sports enthusiasts worldwide. Traffic on the Company's Web sites has
increased significantly since the commercial launch of sportsline.com in August
1995, to an average of 2,270,000 page views and 352,000 visits per day during
September 1997, increases of 210% and 271%, respectively, from December 31, 1996
to September 30, 1997, and the Company's Web sites had approximately 45,700
paying members as of September 30, 1997.

The Company's activities during the period from February 23, 1994
(inception) through December 31, 1994 and the year ended December 31, 1995
primarily related to recruiting personnel, licensing and creating content,
developing and enhancing its software and hardware infrastructure, negotiating
relationships with sports superstars, personalities, organizations and affinity
groups, and raising capital. Although most of the content on the Company's Web
sites is free, users of the Company's Web sites can purchase memberships and
premium content and products. Prior to March 1996, substantially all of the
Company's revenue was derived from membership subscriptions and fees for premium
services. The Company first recognized advertising revenue in March 1996.
Advertising revenue and fees from memberships and premium services constituted
approximately 64% and 36%, respectively, of the Company's total revenue in 1996.
In addition to revenue from advertising, memberships and premium content, the
Company derives revenue from content licensing and from transactions on the
Company's Web sites, including sales of limited edition memorabilia, licensed
apparel and other sports related products. In the future, the Company also
expects to syndicate its content in other media, such as radio, and development
of Web sites for third parties. Through September 30, 1997, transaction and site
development revenue had not been significant and the Company had not received
any syndication revenue.

Advertising revenue is recognized in the period in which the advertisement
is displayed, provided that no significant obligations remain and collection of
the resulting receivable is probable. Company obligations typically include
guarantees of a minimum number of "impressions," or times that advertisements
appear in page views downloaded by users. Revenue relating to monthly
memberships is recognized in the month the service is provided. Revenue relating
to annual memberships and seasonal sports contests is recognized ratably over
the life of the membership agreement or contest period. Accordingly, amounts
received for which services have not yet been provided are recorded as deferred
revenue on the Company's balance sheets. Content licensing revenue is recognized
over the period of the license agreement as the Company delivers its content.

RESULTS OF OPERATIONS

REVENUE

Total revenue for the nine months ended September 30, 1997 was $5,867,000
compared to $1,173,000 for the nine months ended September 30, 1996. Total
revenue for the year ended December 31, 1996 was $2,437,000 compared to $52,000
for the year ended December 31, 1995. The Company had no revenue during the
period from February 23, 1994 (inception) to December 31, 1994. The increase in

<PAGE>

revenue in each period was due to increased advertising sales, as well as
increased revenue from memberships and premium service fees and content
licensing. Advertising revenue for the nine months ended September 30, 1997 and
1996 and the years ended December 31, 1996 and 1995 accounted for approximately
52%, 65%, 64% and 0%, respectively, of total revenue. As of September 30, 1997,
the Company had deferred revenue of $1,318,000 relating to cash received for
which services had not yet been provided.

Barter transactions, in which the Company received advertising or other
services or goods in exchange for content or advertising on its Web sites,
accounted for approximately 17%, 30% and 21% of total revenue for the nine
months ended September 30, 1997 and 1996 and for the year ended December 31,
1996, respectively. In future periods, management intends to maximize cash
advertising revenue, although the Company will continue to enter into barter
advertising relationships as appropriate.

COST OF REVENUE

Cost of revenue consists primarily of content and royalty fees, payroll and
related expenses for the Company's editorial and operations staff,
telecommunications and computer related expenses for the support and delivery of
the Company's services and prizes awarded to contestants in the Company's
various contests. Royalty payments are paid to certain content providers and
technology and marketing partners based on membership levels subject, in certain
instances, to specified minimum amounts.

Cost of revenue for the nine months ended September 30, 1997 was $4,858,000
compared to $2,165,000 for the nine months ended September 30, 1996. Cost of
revenue was $3,320,000 for the year ended December 31, 1996 compared to $757,000
for the year ended December 31, 1995. There was no cost of revenue for the
period from February 23, 1994 (inception) through December 31, 1994, as no
revenue was recognized. The Company's operating expenses have increased
significantly since inception, which reflects the costs associated with building
an infrastructure to support the operation of its Web sites and commercializing
its services. The increase in cost of revenue for the nine months ended
September 30, 1997 compared to the nine months ended September 30, 1996 and for
the year ended December 31, 1996 compared to the year ended December 31, 1995
was primarily the result of content and royalty fees incurred for increased
content, growth in the Company's editorial and operations staff and
telecommunications costs. The Company anticipates that cost of revenue will grow
as it increases staffing to expand its services, increases its merchandising
efforts, incurs higher content and royalty fees and as the Company requires more
bandwidth from its ISPs.

OPERATING EXPENSES

PRODUCT DEVELOPMENT. Product development expense consists primarily of
consulting and employee compensation and related expenses required to support
the development of existing and new service offerings and proprietary content.
The Company capitalizes certain software development costs subsequent to the
establishment of technological feasibility. Based on the Company's product
development process, technological feasibility is established upon completion of
a working model. Costs incurred by the Company between completion of a working
model and the time when the product is ready for general release have not been
significant.

Product development expense for the nine months ended September 30, 1997
was $941,000 compared to $728,000 for the nine months ended September 30, 1996.
Product development expense for the year ended December 31, 1996 was $939,000
compared to $633,000 for the year ended December 31, 1995 and $58,000 for the
period from inception (February 23, 1994) to December 31, 1994. The increase in
product development expense in each period was primarily attributable to
increases in personnel and associated costs relating to developing the features
and functionality of the Company's Web sites. The Company believes that
significant investments in product development are required to remain
competitive. As a consequence, the Company intends to continue to invest
significant resources in product development.

<PAGE>

SALES AND MARKETING. Sales and marketing expense consists of salaries and
related expenses, advertising, marketing, business development and public
relations expenses and member acquisition costs. Member acquisition costs
consist primarily of the direct costs of member solicitation, including
advertising on other Web sites, printing, production and shipping of member
kits, and the cost of obtaining qualified prospects from direct marketing
programs and from third parties. The Company expenses member acquisition costs
as incurred.

Sales and marketing expense for the nine months ended September 30, 1997
was $6,956,000 compared to $3,431,000 for the nine months ended September 30,
1996. Sales and marketing expense was $5,568,000 for the year ended December 31,
1996 compared to $1,179,000 for the year ended December 31, 1995 and $59,000 for
the period from inception (February 23, 1994) to December 31, 1994. Barter
transactions accounted for approximately 15%, 10% and 9% of sales and marketing
expense for the nine months ended September 30, 1997 and 1996 and the year ended
December 31, 1996, respectively. The increase in sales and marketing expense in
each period was a result of growth in the number of personnel and related costs,
member acquisition costs, public relations activities and participation in
conferences and trade shows.

GENERAL AND ADMINISTRATIVE. General and administrative expense consists of
salary and related costs for executive, finance and accounting, technical and
customer support, human resources and administrative functions as well as
professional service fees. General and administrative expense for the nine
months ended September 30, 1997 was $5,163,000 compared to $3,059,000 for the
nine months ended September 30, 1996. General and administrative expense was
$4,795,000 for the year ended December 31, 1996 compared to $2,662,000 for the
year ended December 31, 1995 and $309,000 for the period from February 23, 1994
(inception) to December 31, 1994. The increase in general and administrative
expense in each period was primarily attributable to salary and related expenses
for additional personnel, higher professional fees and recruitment expenses. The
Company increased general and administrative expense in each period to develop
and maintain the administrative infrastructure necessary to support the growth
of its business. The Company anticipates that it will incur additional general
and administrative expense as a result of becoming a public company.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
consists of the depreciation of property and equipment, amortization of costs
associated with consulting agreements and, beginning in March 1997, the
amortization of deferred advertising and content costs relating to the CBS
agreement. Depreciation and amortization expense for the nine months ended
September 30, 1997 was $7,436,000 compared to $502,000 for the nine months ended
September 30, 1996. Depreciation and amortization expense was $824,000 for the
year ended December 31, 1996 compared to $193,000 for the year ended December
31, 1995 and $16,000 for the period from inception (February 23, 1994) to
December 31, 1994. The increase in depreciation and amortization expense in each
period was primarily attributable to increases in property and equipment and,
for the nine months ended September 30, 1997, to amortization related to the CBS
agreement.

Under the Company's agreement with CBS, the Company will issue at the
beginning of each contract year shares of Common Stock and warrants to purchase
Common Stock in consideration of CBS's advertising and promotional efforts and
its license to the Company of the right to use certain CBS logos and
television-related sports content. The value of the advertising and content will
be recorded annually in the balance sheet as deferred advertising and content
costs and amortized to depreciation and amortization over each related contract
year. See Note 5 of Notes to Financial Statements. Total annual expense under
the CBS agreement will be $7,834,000 in 1997, $12,001,000 in 1998, $12,001,000
in 1999, $15,001,000 in 2000 and $15,001,000 in 2001.

INTEREST EXPENSE. Interest expense consists primarily of interest paid on
the Company's existing equipment line of credit, on capital lease obligations
and on short-term loans that have been repaid. Interest expense was $51,000 for
the nine months ended September 30, 1997 compared to $99,000 for the nine months
ended September 30, 1996. Interest expense was $136,000 for the year ended
December 31, 1996 compared to $50,000 for the year ended December 31, 1995.
There was no interest expense for the period from February 23, 1994 (inception)
to December 31, 1994.

<PAGE>

INTEREST AND OTHER INCOME, NET. Interest and other income, net primarily
represents interest earned on cash and cash equivalents. Interest and other
income, net for the nine months ended September 30, 1997 was $548,000 compared
to $156,000 for the nine months ended September 30, 1996. Interest and other
income, net was $365,000 for the year ended December 31, 1996 compared to
$92,000 for the year ended December 31, 1995 and $38,000 for the period from
inception (February 23, 1994) to December 31, 1994. The increase in interest and
other income, net in each period was primarily attributable to higher average
investments in cash and cash equivalents. The Company anticipates that interest
income will increase in future periods as a result of the investment of the net
proceeds from this offering pending other uses.

INCOME TAXES. No provision for federal and state income taxes has been
recorded as the Company incurred net operating losses through September 30,
1997. As of December 31, 1996, the Company had approximately $18,000,000 of net
operating loss carryforwards for Federal income tax purposes, expiring from 2009
to 2011, available to offset future taxable income. Given the Company's limited
operating history, losses incurred to date and the difficulty in accurately
forecasting the Company's future results, management does not believe that the
realization of the related deferred income tax assets meets the criteria
required by generally accepted accounting principles and, accordingly, a full
100% valuation allowance has been recorded to reduce the deferred income tax
assets to $0. See Note 7 of Notes to Financial Statements.

SELECTED UNAUDITED QUARTERLY RESULTS OF OPERATIONS

The following table sets forth selected unaudited quarterly statement of
operations data for each of the seven quarters in the period ended September 30,
1997. The selected statement of operations data has been prepared substantially
on the same basis as the financial statements appearing elsewhere in this
Prospectus and, in the opinion of management, includes all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of the information set forth therein. The results of operations for
any quarter are not necessarily indicative of results to be expected in any
future period.

QUARTER ENDED
-------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1996 1996 1996 1996 1997 1997 1997
----------- ---------- ----------- ---------- ----------- ---------- ----------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Advertising ............... $ 30 $ 312 $ 426 $ 783 $ 715 $ 930 $ 1,420
Membership and premium
services ............... 66 127 212 478 520 537 672
Other ..................... -- -- -- 3 18 82 973
-------- -------- -------- -------- -------- -------- --------
Total revenue ............ 96 439 638 1,264 1,253 1,549 3,065
Loss from operations ...... (2,334) (2,766) (3,613) (4,371) (4,754) (6,716) (8,017)
Net loss .................. (2,374) (2,696) (3,585) (4,200) (4,603) (6,513) (7,874)
Net loss per share ......... $ (0.50) $ (0.41) $ (0.54) $ (0.49) $ (0.52) $ (0.63) $ (0.76)
</TABLE>

The Company's revenue has increased sequentially in each quarter during
1996 and 1997, with the exception of the first quarter of 1997, in which revenue
declined as compared to the previous quarter. The Company believes that this
decrease in revenue is largely the result of seasonality in its business (see
"--Seasonality"). The beneficial impact of the first full quarter of the CBS
agreement is reflected in revenue from advertising and membership and premium
services in the second quarter of 1997. Revenue from memberships and premium
service fees increased sequentially in each of the quarters presented. The
impact of the AOL agreement is reflected in the increase in other revenue in the
third quarter of 1997.

<PAGE>

As a result of the Company's limited operating history and the emerging
nature of the markets in which it competes, the Company is unable to accurately
forecast its revenue. The Company's current and future expense levels are based
largely on its estimates of future revenue and are to a large extent fixed.
Accordingly, the Company may be unable to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall, and a shortfall in revenue in
relation to the Company's expectations could have a material adverse effect on
the Company's business, results of operations and financial condition. In
addition, the Company currently intends to significantly increase its operating
expenses to develop and enhance its technology, to create, introduce and enhance
its service offerings, to acquire and develop content, to fund increased sales
and marketing expenses and to enter into new strategic agreements. To the extent
that such expenses precede or are not subsequently followed by increased
revenue, the Company's business, results of operations and financial condition
could be materially adversely affected.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 1997, the Company's primary source of liquidity
consisted of $8,115,000 in cash and cash equivalents. The Company has financed
its operations primarily through private placements of common stock and
convertible preferred stock.

As of September 30, 1997, the Company owed $337,000 under an equipment line
of credit which is payable in 33 equal monthly installments beginning in July
1996. The borrowings under the equipment line carry interest at the prime rate
plus 1.5% (10.0% as of September 30, 1997) and are secured by substantially all
of the Company's assets. In addition, the Company is required to comply with
certain restrictive covenants which include, among other items, maintenance of
certain financial ratios and a cash balance equal to the amount of the
outstanding balance of the line of credit.

In July 1997, the Company obtained a $2,500,000 revolving credit facility
that provides for the lease financing of computers and other equipment
purchases. As of September 30, 1997, the Company owed $415,000 under this
facility.

As of September 30, 1997, deferred advertising and content costs totaled
$2,445,000, which represented costs related to the CBS agreement to be amortized
to depreciation and amortization expense during the remainder of 1997. Accrued
liabilities totaled $2,104,000 as of September 30, 1997, an increase of $772,000
from December 31, 1996, primarily due to increases in accruals for advertising,
software royalties and consulting fees.

Net cash used in operating activities was $11,645,000 and $7,603,000 for
the nine months ended September 30, 1997 and 1996, respectively. Net cash used
in operating activities was $10,915,000, $4,390,000 and $389,000 for the years
ended December 31, 1996 and 1995 and the period from inception (February 23,
1994) to December 31, 1994, respectively. The principal uses of cash for all
periods were to fund the Company's net losses from operations, partially offset
by increases in deferred revenue, accounts payable and depreciation and
amortization and other noncash charges.

Net cash used in investing activities was $1,808,000 and $592,000 for the
nine months ended September 30, 1997 and 1996, respectively. Net cash used in
investing activities was $1,183,000, $1,446,000 and $42,000 for the years ended
December 31, 1996 and 1995 and the period from inception (February 23, 1994) to
December 31, 1994, respectively. The principal uses for all periods were
purchases of property and equipment, except for the Company's purchase in March
1996 of a restricted certificate of deposit (which subsequently matured).

Net cash provided by financing activities was $7,573,000 and $24,684,000
for the nine months ended September 30, 1997 and 1996, respectively. Net cash
provided by financing activities was $25,908,000, $4,353,000 and $2,098,000 for
the years ended December 31, 1996 and 1995 and the period from inception
(February 23, 1994) to December 31, 1994, respectively. Financing activities
consisted principally of the issuance of equity securities and draws on a term
loan with a bank in December 1995 and January 1996 (which was subsequently
repaid in March 1996).

<PAGE>

The Company has entered into various licensing, royalty and consulting
agreements with content providers, vendors, athletes and sports organizations,
which agreements provide for consideration in various forms, including issuance
of warrants to purchase Common Stock and payment of royalties, bounties and
certain other guaranteed amounts on a per member and/or a minimum dollar amount
basis over terms ranging from one to ten years. Additionally, some of these
agreements provide for a specified percentage of advertising and merchandising
revenue to be paid to the athlete or organization from whose Web site the
revenue is derived. As of September 30, 1997, the minimum guaranteed payments
required to be made by the Company under such agreements were $11,295,000,
including, in the case of one such agreement, up to $600,000 per year, or
$3,000,000 in the aggregate, if the proceeds realized upon the sale of the
Common Stock issued upon the exercise of the warrants granted thereunder do not
exceed $28.75 per share. The Company's minimum guaranteed payments are subject
to reduction in the case of certain agreements based upon the appreciation of
warrants issued, the value of stock received on exercise of such warrants and
the amount of profit sharing earned under the related agreements.

The Company intends to use the net proceeds from this offering for working
capital and other general corporate purposes, including expansion of the
Company's marketing and advertising sales efforts, content development and
licensing, international expansion and for capital expenditures. Although the
Company has no material commitments for capital expenditures, it anticipates
purchasing approximately $3,000,000 of property and equipment in 1998, primarily
computer equipment and furniture and fixtures. From time to time, the Company
expects to evaluate possible acquisitions of or investments in businesses,
services and technologies that are complementary to those of the Company, for
which a portion of the net proceeds of this offering may be used. The Company
presently has no commitments or understandings for any such acquisitions, and is
not presently engaged in any discussions or negotiations for any such
acquisitions, and no portion of the net proceeds has been allocated for any
specific acquisition. Pending such uses, the Company intends to invest the net
proceeds from this offering in investment-grade, interest-bearing securities.

The Company believes that the net proceeds from this offering and current
cash balances will be sufficient to fund its working capital and capital
expenditure requirements for at least the next 12 to 18 months. However, the
Company expects to continue to incur significant operating losses for at least
the next 24 to 30 months. To the extent the Company requires additional funds to
support its operations or the expansion of its business, the Company may sell
additional equity, issue debt or convertible securities or obtain credit
facilities through financial institutions. The sale of additional equity or
convertible securities will result in additional dilution to the Company's
shareholders. There can be no assurance that additional financing, if required,
will be available to the Company in amounts or on terms acceptable to the
Company.

SEASONALITY

The Company expects that its revenue will be higher leading up to and
during major U.S. sports seasons and lower at other times of the year,
particularly during the summer months when the only major U.S. sports season in
progress is Major League Baseball. The Company believes that advertising sales
in traditional media, such as television, generally are lower in the first and
third calendar quarters of each year, and that advertising expenditures
fluctuate significantly with economic cycles. Depending on the extent to which
the Internet is accepted as an advertising medium, seasonality and cyclicality
in the level of Internet advertising expenditures could become more pronounced.
The foregoing factors could have a material adverse affect on the Company's
business, results of operations and financial condition.

NEW ACCOUNTING PRONOUNCEMENTS

<PAGE>

such plans using the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES." The Company has elected to continue to use the intrinsic value based
method. Accordingly, pro forma disclosures required to be presented by SFAS No.
123 for companies continuing to utilize the intrinsic value based method are
presented in Note 6 of Notes to Financial Statements and have been determined as
if the Company had accounted for its stock-based compensation plans under the
fair value method.

In February 1997, SFAS No. 128, EARNINGS PER SHARE, was issued. SFAS No.
128 simplifies the methodology of computing earnings per share, and requires the
presentation of basic and diluted earnings per share. The Company's basic and
diluted earnings per share are the same, as the Company's common stock
equivalents are antidilutive. In addition, the Company's basic and diluted
earnings per share are the same as that computed under APB No. 15, EARNINGS PER
SHARE, as presented in the accompanying Statements of Operations. SFAS No. 128
must be adopted for periods ending after December 15, 1997 and be retroactively
reflected in the financial statements.

<PAGE>

BUSINESS

THE FOLLOWING BUSINESS SECTION CONTAINS FORWARD-LOOKING STATEMENTS WHICH
INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A
RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" AND
ELSEWHERE IN THIS PROSPECTUS.

SportsLine USA is a leading Internet-based sports media company that
provides branded, interactive information and programming as well as merchandise
to sports enthusiasts worldwide. The Company produces and distributes original,
interactive sports content, including editorials and analyses, radio shows,
contests, games, fantasy league products and fan clubs. The Company also
distributes a broad range of up-to-date news, scores, player and team statistics
and standings, photos, audio clips and video clips obtained from leading sports
news organizations and the Company's superstar athletes, as well as instant odds
and picks. Traffic on the Company's Web sites has increased significantly since
the commercial launch of sportsline.com in August 1995, to an average of
2,270,000 page views and 352,000 visits per day during September 1997, increases
of 210% and 271%, respectively, from December 31, 1996 to September 30, 1997,
and the Company's Web sites had approximately 45,700 paying members as of
September 30, 1997.

The Company has established a number of important strategic relationships
to increase awareness of the SportsLine brand, build traffic on its Web sites
and develop proprietary programming. In March 1997, the Company entered into a
strategic alliance with CBS pursuant to which the Company's flagship Web site
was renamed "cbs.sportsline.com." The CBS agreement provides for
cbs.sportsline.com to receive at least $57 million of advertising and on-air
promotion during the term of the agreement, primarily during CBS sports event
broadcasts such as the 1998 Winter Olympics, the NCAA Men's Basketball
Tournament, NCAA Football, PGA Tour events, U.S. Open tennis and the Daytona
500. The Company also receives television and radio promotion through strategic
media relationships with The Golf Channel and Sports Byline USA, the nation's
largest syndicated sports radio network, and on numerous sports talk radio
stations around the country. In July 1997, the Company entered into a strategic
programming and distribution agreement with AOL, pursuant to which
cbs.sportsline.com became the first "anchor tenant" on AOL's Sports Channel,
which allows AOL's more than 9 million subscribers to access the Company's Web
sites from within the AOL service. The AOL agreement also provides the Company
the opportunity to market memberships, premium services and merchandise to AOL's
subscribers and to integrate its sports content and programming into all major
sports areas of the AOL service. The Company also recently entered into an
agreement with Microsoft under which cbs.sportsline.com will be integrated into
Microsoft's "Active Desktop" as part of Microsoft's forthcoming release of IE4
and Windows 98. cbs.sportsline.com is also featured as a default content
"channel" in the Channel Finder of Netscape's recently released Netcaster
software, which utilizes "push" delivery to give users the ability to subscribe
to dynamic Web content and to browse these channels and Web sites offline from
their desktop. In addition, the Company has established strategic relationships
with sports superstars, personalities, organizations and affinity groups.

INDUSTRY BACKGROUND

THE U.S. SPORTS MARKET

Participatory and spectator sports are among the leading pastimes of
Americans as demonstrated by the popularity of sports media and by the time and
money consumers spend on sports events, products and services. Based on industry
sources, the Company estimates that attendance at Major League Baseball, NFL,
NBA and NHL games during the 1995-1996 season was approximately 120 million,
generating gate receipts of over $3 billion. Sports television programming also
consistently draws large audiences, with sports broadcasts comprising eight of
the top ten most widely viewed television programs in 1996 according to Nielsen
Media Research. The popularity of sports is also demonstrated by the success of
sports publications, the top five of which had a paid weekly circulation of 8.9
million and generated over $800 million in advertising revenue in 1996,
according to Advertising

<PAGE>

Age. In addition, the U.S. retail market for licensed sports merchandise and
apparel was approximately $14 billion in 1996, according to the Sporting Goods
Manufacturers Association. Due to the popularity of sports among males between
the ages of 18 and 49, advertisers consider sports events and media as
attractive venues to reach this audience. Based on industry sources, the Company
estimates that approximately $4.7 billion was spent on sports television
advertising and approximately $5.4 billion was spent on sponsorships of sports
events in 1996.

THE WEB AS A NEW MEDIUM FOR ADVERTISING AND COMMERCE

The rapidly increasing number of Web users and ubiquitous access to the
Internet, both in the United States and internationally, have resulted in the
emergence of the Web as a new mass medium. International Data Corporation
("IDC") estimates that the number of individual users worldwide with access to
the Web at the end of 1996 was 28 million, growing to 175 million by the end of
2001.

The Web is an attractive medium for advertising because of its
interactivity, flexibility, targetability and measurability. The interactive
nature of the Web enables advertisers to establish dialogues and meaningful
relationships with potential customers. The flexible nature of a digital medium
like the Web enables advertisers to change their messages frequently in response
to real world events and consumer feedback. The Web also enables advertisers to
reach broad audiences and to target advertisements to users with similar
demographic characteristics, specific regional populations, affinity groups or
selected individuals. The Web is a measurable medium because impression levels
and demographic information concerning users can be tracked and reported to
advertisers. Jupiter Communications estimates that the dollar value of online
advertising will increase from $314 million in 1996 to $7.1 billion in 2001.

The Web is emerging as a medium for global commerce. A growing number of
consumers have begun to transact business over the Web, such as paying bills,
booking airline tickets, trading securities and purchasing consumer goods.
Moreover, online transactions can be faster, less expensive and more convenient
than transactions conducted via human interaction. Internet retailers can offer
convenience and value to their customers and simultaneously display in-depth
information concerning products or services selected by users according to their
preferences using a combination of text, video and sound. IDC estimates that the
total value of goods and services purchased on the Web will increase from $2.6
billion in 1996 to $220 billion in 2001.

THE SPORTSLINE OPPORTUNITY

The Company seeks to capitalize on the market opportunities created by the
worldwide popularity of sports, the emergence of the Web as a communications and
commerce medium and the appealing demographics of sports fans on the Web. By
offering comprehensive and compelling sports programming that is continually
updated on a real-time basis, and by utilizing the Web's graphical and
interactive capabilities to add entertainment value to its content, the Company
is targeting sports enthusiasts worldwide to develop the SportsLine brand. The
Company believes that it can leverage its brand recognition and its other media
properties, such as its sports radio programming, in the pursuit of multiple
revenue opportunities, including advertising, memberships, merchandising,
content and programming syndication and Web site development.

STRATEGY

The Company's objective is to become the leading Internet sports media
company and to create a global sports brand. Key elements of the Company's
strategy include the following:

FOCUS EXCLUSIVELY ON SPORTS

SportsLine USA focuses exclusively on providing sports information,
programming and sports-related merchandise 24 hours a day, seven days a week.
The Company distinguishes itself by offering broader and more in-depth sports
coverage on its Web sites than is available from any other single

<PAGE>

source of media, including television, radio or print publications. The Company
differentiates its Web sites by (i) providing comprehensive and innovative
sports programming, including news and scores, editorials, sports radio shows,
contests, games and fantasy league products; (ii) utilizing its editorial and
technical resources to package proprietary and third-party content in a
compelling and entertaining format; (iii) offering exclusive content related to
its sports superstar relationships and real-time odds and extensive matchup
analyses through its vegasinsider.com Web site; (iv) producing original video
programming surrounding major sports events, such as live interviews and
"cybercasts" over the Internet; (v) providing local sports coverage through its
relationships with more than 30 specialty publications and expanded coverage
through its relationship with CBS affiliate and owned and operated stations; and
(vi) providing a monitored, 24 hours a day, seven day a week sports chat
community. The Company seeks to capitalize on its technical resources to
maximize user satisfaction by (i) optimizing the speed of delivery of its
content and (ii) utilizing interactive multimedia software tools such as Active
X, Java, RealMedia (streaming audio and video), Shockwave and QuickTime Virtual
Reality to add entertainment value to its programming.

LEVERAGE STRATEGIC RELATIONSHIPS TO ENHANCE BRAND AND BUILD TRAFFIC

The Company has established strategic relationships to increase consumer
awareness of the SportsLine brand and build traffic to its Web sites. The
Company believes that its relationship with CBS, in particular the branding of
its flagship Web site as "cbs.sportsline.com" and the promotion it will receive
on CBS television sports broadcasts, will facilitate the establishment of
SportsLine as a broadly recognized consumer brand. The Company also believes
that its strategic agreements with AOL and Microsoft and its ongoing
relationship with Netscape will further enhance its brand, generate traffic to
the Company's Web sites and provide additional opportunities to market
memberships, premium services and merchandise to millions of Web users. In
addition, the Company has established strategic relationships with sports
superstars, personalities, organizations and affinity groups, and operators of
other Web sites to increase traffic to the Company's Web sites, to attract new
advertisers and members and to create additional revenue opportunities.

CAPITALIZE ON MULTIPLE REVENUE OPPORTUNITIES

The Company is pursuing multiple revenue opportunities for future growth.
The Company believes that advertising, membership and premium service fees,
merchandising, content syndication and third party Web site development
represent key revenue opportunities. The Company believes that the demographics
of its audience are consistent with those of the sports industry generally and
are attractive to advertisers seeking to reach these consumers. Although most of
the content on the Company's Web site is free, the Company charges membership
fees for access to exclusive editorials, matchup analysis and other exclusive
content such as proprietary contests, fantasy league packages, instant odds and
picks. The Company also expects to increase its revenue from merchandising,
including sales of limited edition memorabilia, licensed apparel and other
sports products, as well as by developing Web sites and fan clubs for sports
superstars, personalities, organizations and affinity groups.

DEVELOP MULTIPLE DISTRIBUTION CHANNELS

The Company intends to extend the SportsLine brand and leverage its sports
content by syndicating its programming and distributing its proprietary content
through a variety of media, including radio, third party and CBS affiliate Web
sites, online services, news wire services, publications and e-mail. The Company
currently produces the only all-sports radio programming broadcast exclusively
over the Internet. The Company recently entered into an agreement to syndicate
certain of its radio programming nationally to traditional over-the-air sports
talk radio stations. The Company also intends to capitalize on the experience of
its management and its relationships with sports superstars, personalities and
journalists to develop sports-oriented television programming.

PURSUE INTERNATIONAL GROWTH OPPORTUNITIES AND EXPAND GLOBAL REACH

Given the global nature of sports, the Company is pursuing opportunities to
leverage the SportsLine brand internationally. The Company intends to establish
foreign news bureaus to create

<PAGE>

global sports coverage and to establish strategic relationships that will enable
it to more effectively obtain and deliver local sports content. The Company does
not currently have any overseas operations or arrangements, but is pursuing
opportunities to build Web sites targeted to the Australian, European and
Pacific Rim markets.

SPORTS INFORMATION, PROGRAMMING AND DISTRIBUTION

The Company offers a broad range of sports-related information and
programming, which it delivers through its network of Web sites and other
distribution channels.

INFORMATION AND PROGRAMMING

<TABLE>

<S> <C>

NEWS AND EDITORIALS The Company's news organization provides up-to-date general
sports news and information for all major professional and
college sports 24 hours a day, seven days a week, including
previews, game summaries, audio and video clips and color
photographs, obtained from strategic partners and a variety of
leading sports news organizations such as The Associated
Press, CBS, Reuters, Pro Sports Exchange and SportsTicker.
The Company also publishes exclusive editorials and analyses
from its in-house staff of 30 writers and editors and more than
45 freelance sports journalists.

SCORES, STATISTICS AND ODDS The Company delivers continuously updated, real-time scores,
schedules, standings, player and team statistics and odds for
all major professional and college sports from data providers
including The Associated Press, Computer Sports World, Data
Broadcasting Corporation, Elias Sports Bureau and SportsTicker.

FANTASY LEAGUES AND CONTESTS Fantasy league enthusiasts can participate in SportsLine
leagues or form their own leagues with customized rules,
scoring and reporting. The Company administers player
transactions (for example, drafts, trades, starting lineup
selection and disabled list and minor league moves) and
provides summaries of scoring, standings and roster
transactions. Proprietary contests feature cash prizes, limited
edition sports memorabilia and other awards based on the
results of weekly, season-long or special event related games
of skill. Regular sweepstakes and "giveaways" feature cash
prizes, sports memorabilia, event tickets and other
merchandise.
LOCAL AND PERSONALIZED CONTENT The Company packages its information and programming to
enable users to follow local or regional team and event
coverage, including weekly stories from college sports
publications and team coverage from Pro Sports Exchange.
Members can personalize the information and programming
they receive through the Company's "Personal SportsPage"
and "Personal SportsMail," which are delivered over the Web
or by e-mail.
</TABLE>

<PAGE>

COMMUNITY CONTENT The Company hosts monitored interactive chat
sessions with sports superstars and personalities, and
experts on subjects such as sports memorabilia and
fantasy leagues. The Company also hosts bulletin boards
and newsgroups devoted to sports-related topics.

LIVE RADIO! The Company's radio studio produces over 60 hours of
original, live programming each week, including interviews
with superstars and notable sports personalities and regular
commentary from leading sports analysts. The Company also
"cybercasts" syndicated radio shows from Sports Byline USA,
Sports Overnight America and various experts on sports-
related topics.

VIDEO The Company produces original video programming
surrounding major sports events and live video interviews and
"cybercasts" such as the Company's exclusive live Internet
coverage of the Special Olympics All Star Cafe Celebrity
Auction. The Company's Super Bowl XXXI coverage included
live video interviews and daily video clips covering the event
and sports celebrities.
</TABLE>

WEB SITES

CBS.SPORTSLINE.COM, the Company's flagship Web site, features
comprehensive, in-depth coverage of all major professional and college sports on
a domestic and international basis, including the following:

<TABLE>

<S> <C>

Baseball Football
Major League Baseball National Football League
Minor League Baseball Canadian Football League
College College
Hockey Basketball
National Hockey League National Basketball Association
International Hockey League Women's National Basketball Association
American Hockey League Continental Basketball Association
College American Basketball League
Auto Racing College
Boxing Olympic Sports
Cricket Rugby
Cycling Skiing
Golf Soccer
Health and Fitness Tennis
Horse Racing Volleyball
</TABLE>

cbs.sportsline.com won numerous awards during 1996, including the Internet
Services Association's "Outstanding Innovation" award for Baseball LIVE!; a
"Gold Medal" for Outstanding Olympic Coverage from THE WALL STREET JOURNAL; a
"Members' Choice" designation from AOL; and NETGUIDE'S "Platinum Award" as one
of the best sites on the Web. During the first nine months of 1997,
cbs.sportsline.com won, among other awards, NetGuide's "Platinum Award" for
overall site excellence and "Editor's Choice" from UK Plus, and was one of PC
Magazine's top 25 sites on the Web.

cbs.sportsline.com's comprehensive approach is exemplified by its coverage
of Major League Baseball. In addition to up-to-date news, scores, standings,
rosters, transaction reports and exclusive editorial commentary,
cbs.sportsline.com features Baseball LIVE!, an online "stadium" that utilizes
Shockwave technology to enable users to view a graphical depiction of real-time
play-by-play action of

<PAGE>

Major League Baseball games in progress. Additional baseball coverage includes
player and team statistics that are sortable by position, team and standing;
chat rooms and baseball newsgroup links and contests. Fantasy league enthusiasts
also can purchase SportsLine's fantasy league products, which include Fantasy
Baseball and Commissioner. Fantasy Baseball enables participants to manage their
own fantasy- or rotisserie-style baseball league in season-long and playoff
competitions. Participants form leagues of up to 20 teams and utilize
cbs.sportsline.com to administer all player transactions (for example, drafts,
trades, starting lineup selection, disabled list and minor league moves) and
obtain weekly summaries of scoring, standings and roster transactions.
cbs.sportsline.com also offers Fantasy Baseball participants the ability to
communicate in specially reserved chat rooms. Commissioner provides fantasy and
rotisserie league participants a fully configurable interface to manage their
own leagues, including customizing rules, scoring and reporting to their own
preferences.

VEGASINSIDER.COM, launched as a separate Web site in March 1997, provides
sports gaming information and features electronic odds on all major sports
events from the Las Vegas casinos, including the Stardust, the Flamingo Hilton,
the MGM Grand and Bally's, plus lines from nationally recognized oddsmakers
"Roxy" Roxborough and Russ Culver. Handicapping information includes commentary,
matchup analysis and picks from some of the nation's leading sports
handicappers. The site's news reporting is focused on a gaming perspective and
provides detailed statistical and matchup analysis tools, including
"against-the-spread" and "straight-up" records, team and player statistics and
injury and weather reports. Live scoreboards provide breaking news and scores,
updates, recaps and boxscores. Most of the content on vegasinsider.com is
available only to paying members.

WEB SITES FOR SPORTS SUPERSTARS AND PERSONALITIES. The Company has created
and maintains Web sites for 15 sports superstars and personalities, including
Joe Namath, Shaquille O'Neal (shaq.com), Wayne Gretzky (gretzky.com), Jerry
Rice, Cal Ripken, Jr. (2131.com), Pete Sampras (sampras.com), Gabrielle Reece
(gabbyreece.com), Arnold Palmer (arnoldpalmer.com), Emerson Fittipaldi
(emmo.com), Mike Schmidt, Bill Walton, John Daly (gripitandripit.com) and
Keyshawn Johnson (keyshawn.com). The Company also has entered into exclusive
agreements to create Web sites for Michael Jordan, Tiger Woods and Joe Montana,
all of which are expected to be launched during 1997. The Company has packaged
these Web sites in a unique and entertaining site that includes all of
SportsLine's athlete spokespersons. The superstar athlete site will include
daily features and insights from athletes, the opportunity to belong to fan
clubs, as well as radio interviews and chat sessions from active and retired
athletes from around the world of sports.

OTHER WEB SITES. The Company has created and maintains Web sites for sports
organizations and major sports events, including the San Francisco Forty Niners
NFL franchise (sf49ers.com), The Golf Channel (thegolfchannel.com), Bollettieri
Tennis and Sports Academy (bollettieri.sportsline.com), the FedEx Orange Bowl
(orangebowl.org), the Ironman Triathlon (ironman.sportsline.com), the Women's
Professional Volleyball Association (wpva.com), the United States Ski Team
(usskiteam.com) and Golf Holidays (golfholidays.com).

The Company is responsible for the technical development, production and
maintenance of the Web sites it creates for athletes and sports organizations,
as well as customer service, technical support and billing associated with the
sale of premium features or merchandise. The Company's third party Web site
agreements are for terms ranging from one to ten years and generally provide the
Company the exclusive right to create a Web site for a sports superstar,
personality, organization or affinity group, as well as to receive certain
content for the Web site to use the athlete or organization's name, logos and
other materials to promote the Company's business and products. In consideration
for the rights granted under its third party Web site agreements, the Company
has issued warrants to purchase Common Stock and, in certain instances, agreed
to make cash payments. The Company generally is entitled to receive a percentage
of the sponsorship, advertising and other revenue generated from third party Web
sites it develops, although to date revenue from this source has been
insignificant. The Company intends to capitalize on its Web site production
capabilities and generate incremental revenue by building Web sites for other
sports superstars, personalities, organizations and affinity groups that seek to
establish a Web presence.

<PAGE>

OTHER DISTRIBUTION CHANNELS

The inclusion of cbs.sportsline.com in the AOL service and the integration
of cbs.sportsline.com into Microsoft's IE4 and Netscape's Netcaster Web browsers
make the Company's sports content and programming readily accessible to the
millions of Web users that access the Internet via these platforms. The Company
also distributes its sports content and programming through relationships with
other commercial online services (Prodigy), third party Web sites (Delta
Airlines, Excite and Talk City), high speed modems and television-based products
(@Home, Media One and Netchannel), and other Internet-based products (C|NET's
Snap!, Pointcast, Air Media Live!, WaveTop and Audible Words). The Company
believes that its original sports radio shows have broad appeal and has recently
entered into an agreement to syndicate certain of its radio programming, both on
the Internet and nationally to over-the-air sports talk radio stations.
Currently, one of the Company's sports talk radio shows is being broadcast on
over 30 of the SportsFan Radio Network's affiliate stations. The Company also
intends to develop distribution and revenue opportunities in other media,
including news wire services, publications and e-mail.

ADVERTISING AND SALES

The Company believes that the demographics of its audience are similar to
the traditional sports advertisers' target market. Based on Company sponsored
market research, users of the Company's Web sites are predominantly male, 95%
are between the ages of 18 to 54, 48% have college degrees and 34% have an
annual income greater than $75,000.

The Company currently derives, and expects to continue to derive, a
substantial portion of its revenue from advertising on its Web sites. The
Company sells "banner" advertisements that let interested readers link directly
to the advertisers' own Web sites or to promotional sites created by the
Company. The Company also offers sponsorship opportunities that enable
advertisers to associate their corporate messages with the Company's coverage of
athletes and marquee events (such as the World Series, the Super Bowl, the
Olympics, the NBA Playoffs and the Stanley Cup Playoffs), special features of
the Company's Web sites (including ScoreCenters or Baseball LIVE!) and special
promotions, contests and events. The Company targets traditional sports
advertisers, such as consumer product and service companies, sporting goods
manufacturers and automobile companies, as advertisers on its Web sites.

Advertising revenue has been derived principally from short-term
advertising contracts on a per impression basis or for a fixed fee based on a
minimum number of impressions. The Company's advertising rates generally range
from $20.00 to $50.00 per thousand impressions. To enable advertisers to verify
the number of impressions received by their advertisements and monitor their
advertisements' effectiveness, the Company provides its advertisers with third
party audit reports showing data on impressions received by their
advertisements.

The Company's in-house sales staff develops and implements its advertising
strategies, including identifying strategic accounts and developing
presentations and promotional materials. The Company has sales personnel located
in Fort Lauderdale, New York, Chicago and San Francisco. The Company also plans
to open a sales office in Detroit. The Company also capitalizes on its
cross-marketing relationships with sports superstars, personalities,
organizations and affinity groups by seeking sponsorships and advertisements
from their sponsors. Pursuant to the CBS agreement, the Company and CBS's
television network advertising sales personnel will coordinate advertising sales
efforts for cbs.sportsline.com.

<PAGE>

During the period from March 1, 1996 (when the Company began generating
advertising revenue) through September 30, 1997, more than 100 organizations
from various industries advertised on the Company's Web sites, including the
following representative advertisers, each of which placed more than $10,000 of
advertising during this period:

<TABLE>

<S> <C>

AUTOMOTIVE PUBLISHING AND ENTERTAINMENT
Acura Air Media
Ford DirecTV
General Motors E-Pub
Honda Electronic Arts
Oldsmobile Men's Health & Fitness
Toyota Paramount Pictures
Volvo TECHNOLOGY
CONSUMER AOL
American Greetings Digital Equipment Corporation
Bausch & Lomb Excite
Clearasil IBM
Coca-Cola Intel
JC Penney Microsoft
Kodak Netscape
Pepsi PointCast
Perry Ellis RealNetworks
Selsun Blue Sun Microsystems
Smirnoff Toshiba
Texaco U.S. Robotics
1-800-Flowers TELECOMMUNICATIONS
FINANCIAL AT&T
AIG Bell South
Block Financial MCI
Chase Manhattan Bank Sprint
E*Trade US WEST
MBNA
VISA

</TABLE>

No advertiser accounted for more than 8% of the Company's revenue during
1996 or for the nine months ended September 30, 1997.

<PAGE>

MEMBERSHIPS AND PREMIUM OFFERINGS

Although most of the content on the Company's Web sites is free, users can
purchase memberships and premium content and products. The Company also believes
that it will be able to charge fees for access to "pay-per-view" content such as
exclusive interviews, chat sessions or special coverage of major sports events.
In addition, the Company expects to sell online fan clubs in connection with
some of its planned superstar athlete Web sites and has the exclusive right to
create the "offline" fan club for Tiger Woods.

The following table sets forth certain information, as of September 30,
1997, concerning the Company's membership and premium service offerings:

MEMBERSHIPS DESCRIPTION PRICE RANGE
- ----------- ----------- -----------
<S> <C> <C>
TEAM SPORTSLINE PERSONAL SPORTSPAGE. Member-configured Web pages to follow selected
teams and sports.
PERSONAL SPORTSMAIL. Information on members' favorite teams and sports
delivered daily to their personal e-mail addresses.
ELECTRONIC ODDS. Fifteen minute delayed odds from premier Las Vegas
casinos.
NATIONAL AND REGIONAL NEWS. Breaking news, photos and audio clips from
the Associated Press and exclusive stories from the Company's in-house $4.95 monthly
editorial staff. $39.95 annually
CONTESTS. Sports specific contests with travel, memorabilia and cash prizes.
SPECIAL EDITORIAL CONTENT. Sports birthdays, Playboy's Classic Sports
Interviews and access to a sports almanac.
SPORTS RADIO. Access to archived radio broadcasts.
CHAT ROOMS. Private chat rooms available only to members.
DISCOUNTS. Members receive discounts on merchandise, travel,
entertainment and fantasy league products and services.

VEGAS INSIDER ELECTRONIC ODDS. Fifteen minute delayed odds from premier Las Vegas
casinos.
DETAILED MATCH-UP ANALYSIS. Game logs, "against-the-spread" and "straight-
up" records, team and player statistics, injury and weather reports and $19.95 monthly
detailed write-ups from Computer Sports World. $129.95 annually
HANDICAPPING EXPERTS. Picks, match-up analysis and editorial commentary.
LIVE SCOREBOARDS. Breaking scores, odds, updates, recaps, box scores and
breaking news.

PREMIUM SERVICES
- ----------------
FANTASY LEAGUES CHALLENGE GAME. Multi-player leagues featuring overall, conference, league
AND FANTASY TOOLS and weekly prizes.
$19.95 - $49.95
FANTASY SOFTWARE/TOOLS. Team and league management, including sortable
stats, Fantasy Scoring Center, Stats Projector and Trends Analysis.

ODDS AND PICKS ELECTRONIC ODDS. Instant odds from premier Las Vegas casinos. $79.95 monthly
$599.95 annually

PICK PACKS. Expert picks for college and professional games from well-known $14.95 to $24.95
handicappers. per pick pack

PUBLICATIONS ONLINE SUBSCRIPTIONS. Ten professional and more than 25 college sports
publications $5.95 - $59.95

</TABLE>

The Company offers potential members a 30-day free trial period. As is
typical in the online services industry, a portion of the users who access the
Company's service on a trial basis do not become members, and each month a
portion of the Company's members terminate their memberships. The Company
believes that its conversion and retention rates are consistent with industry
averages for online and similar services.

<PAGE>

MERCHANDISE

The Company recently began offering a variety of branded sports
merchandise, books, videos and unique memorabilia on its Web sites, including
(i) merchandise from recognized sporting goods manufacturers, such as K-Swiss
and Wilson (ii) licensed apparel from Russell Athletics and Pro-Line (iii)
league, event and team merchandise branded by organizations such as the NFL,
MLB, NCAA, Women's Professional Volleyball Association and the FedEx Orange
Bowl, (iv) unique sports superstar memorabilia, including items branded by
Michael Jordan, Joe Namath, Emerson Fittipaldi, Gabrielle Reece, Cal Ripken and
Wayne Gretzky, (v) CBS SportsLine branded merchandise from Champion and Nicole
Miller, (vi) sports books, (vii) collectibles, trading cards and autographed
memorabilia from Upper Deck, Pinnacle, Scoreboard and Mounted Memories and
(viii) sports related art. The Company continues to establish relationships with
vendors and licensors to enable it to offer, through third-party distributors, a
branded selection of sports-related merchandise, including books and other
sports publications, licensed apparel and other sports products, videos,
specialty products and limited edition memorabilia and collectors items. To
date, merchandise revenue has not been significant.

STRATEGIC RELATIONSHIPS

The Company has established strategic relationships to provide marketing
and cross promotional opportunities, to increase consumer awareness of the
SportsLine brand, to build traffic on its Web sites and to obtain exclusive
sports content for its Web sites.

CBS. In March 1997, the Company entered into a five-year agreement with CBS
pursuant to which CBS acquired a minority ownership interest in the Company and
the Company's flagship Web site was renamed "cbs.sportsline.com". The agreement
provides for cbs.sportsline.com to receive, among other things, at least $57
million of network television advertising and on-air promotion during the term
of the agreement, primarily during CBS television sports broadcasts such as the
1998 Winter Olympics, the NCAA Men's Basketball Tournament, NCAA Football, PGA
Tour events, U.S. Open tennis and the Daytona 500. In addition, the Company has
the right to use certain CBS logos and television-related sports content on
cbs.sportsline.com and in connection with the operation and promotion of that
Web site. CBS and the Company will seek to maximize revenue through a joint
advertising sales effort and by creating merchandising opportunities. The
agreement also provides the Company access to certain CBS television-related
sports content and the potential to create distribution and revenue
opportunities with more than 200 CBS affiliates throughout the United States. In
addition, under the terms of the agreement, the Company and CBS will share
advertising revenue on pages of cbs.sportsline.com that relate to certain CBS
broadcast sports events or that contain CBS content. See "Certain
Transactions--CBS Agreement."

AOL. cbs.sportsline.com was the first Web site to become an "anchor tenant"
on AOL's Sports Channel. Under its one-year agreement with AOL, the Company has
secured until July 1998 a continuous position on the Main Sports Screen of the
AOL Service as well as a programming presence on every other major sports screen
within the AOL Service. In addition, the Company will have the opportunity to
sell its merchandise and memorabilia to AOL's subscribers through online
marketing and promotional campaigns. The Company is entitled to receive
"bounties" for new AOL subscribers acquired through disk distribution campaigns
conducted by the Company in association with AOL. In consideration of the
advertising impressions cbs.sportsline.com will receive on the Main Sports
Screen and other areas of the AOL service, the Company will pay AOL cash and
other consideration, including exclusive content, integrated on-air/online
programming within CBS sports events and promotion of AOL and provision of
advertising on the Company's Web sites.

MICROSOFT. The Company recently entered into a strategic marketing and
content distribution agreement with Microsoft under which Microsoft will promote
the Company's service in conjunction with the commercial release of IE4 and
Windows 98 as a "Platinum Channel Partner." The Company will be one of 25
content providers to be permanently bundled into the "Active Desktop," thereby
becoming an integrated component of every copy of IE4 and Windows 98 distributed
by Microsoft within the United States over the term of the agreement.

<PAGE>

SPORTS SUPERSTARS AND PERSONALITIES. The Company has established strategic
relationships with sports superstars and personalities, including Michael
Jordan, Tiger Woods, Joe Namath, Shaquille O'Neal, Wayne Gretzky, Jerry Rice,
Joe Montana, Cal Ripken, Jr., Pete Sampras, Arnold Palmer, Gabrielle Reece, Mike
Schmidt, Emerson Fittipaldi, John Daly, Keyshawn Johnson and Bill Walton, and
advisory agreements with Mark McCormack (Chairman of International Management
Group) and Edward DeBartolo, Jr. and Carmen Policy (the owner and President,
respectively, of the San Francisco Forty Niners). Each of these individuals has
agreed to serve as a spokesperson for the Company, to permit the Company to use
his or her name, likeness and photographs on promotional materials and to be
available to the Company to provide input on business and marketing strategies.

SPORTS ORGANIZATIONS AND AFFINITY GROUPS. cbs.sportsline.com has been
designated the "Official Online Service of the National Football League Players"
by Players, Inc., the for-profit licensing subsidiary of the National Football
League Players Association, and has also entered into strategic relationships
with the San Francisco Forty Niners, the United States Ski Team, the Ironman
Triathlon and the Women's Professional Volleyball Association. The Company
engages in cross promotional activities with these organizations and uses these
relationships to increase its access to the organizations' individual athlete
members, some of whom have participated in exclusive chat sessions on the
Company's Web sites. The Company also maintains cross promotional relationships
with other sports organizations and affinity groups for which it has created Web
sites, including Bollettieri Tennis and Sports Academies, the FedEx Orange Bowl
and Sports Careers, a career consulting and placement service.

IMG. In June 1995, the Company entered into a consulting agreement with
International Merchandising Corporation ("IMG") which provided for IMG to
provide certain services to the Company on an exclusive basis, including acting
as the Company's representative and marketing agent in negotiations for the
acquisition of rights to programs and events, access to IMG clients as content
providers as well as implementing marketing plans for obtaining subscribers and
sponsors. In June 1996, the Company and IMG entered into an amended agreement
under which IMG also agreed to act as the Company's agent in negotiations with
television broadcasters, athletes and strategic corporate partners. In April
1997, the Company and IMG agreed to expand, on a global basis, the services IMG
provides to the Company.

OTHER MEDIA RELATIONSHIPS. In addition to promotion on CBS television
sports broadcasts, SportsLine receives television and radio promotion through
its strategic media relationships with The Golf Channel and Sports Byline USA,
the nation's largest syndicated sports radio network, including on-air
commercials and live endorsements by Ron Barr, Sports Byline USA's Emmy Award
winning host. The Company has developed similar cross promotional relationships
with leading sports talk radio stations in several major metropolitan markets
throughout the United States. The Company also receives promotional space within
the print version of each of the publications it distributes through its Web
sites.

INTERNET AND ONLINE RELATIONSHIPS. Through a variety of strategic
relationships, the Company receives broad exposure by distributing its
proprietary sports content and programming through commercial online services
(AOL and Prodigy), browsers and products (Microsoft's "Active Desktop",
Netscape's "NetTop Channel Finder", Pointcast, Audible Words, WaveTop, Air Media
Live!, C|NET's Snap!), third party Web sites, (Delta Airlines, Excite and
TalkCity), high speed modems and television-based products (@Home, Media One and
Netchannel), and other Internet-based products (Pointcast, Air Media Live!,
Wavetop and Audible Words).

MARKETING

The Company employs a variety of methods to promote the SportsLine brand
and attract traffic and new members to its Web sites. In addition to on-air
promotion on CBS television sports broadcasts, The Golf Channel and Sports
Byline USA, the Company advertises on other Web sites, in targeted publications
and on sports talk radio stations, distributes promotional materials at selected
sports events

<PAGE>

and engages in an ongoing public relations campaign. The Company is involved in
a variety of promotions where links to its Web sites or coupons offering free
trial memberships are bundled into software products distributed online or
through other retail channels. The Company also has conducted limited direct
mail campaigns targeting online or sports-oriented consumers. Whenever possible,
the Company utilizes cross promotional arrangements to secure advertising and
other promotional considerations.

The Company's agreement with CBS provides for cbs.sportsline.com to
receive, among other things, at least $57 million of network television
advertising and on-air promotion during the term of the agreement, primarily
during CBS television sports broadcasts such as the 1998 Winter Olympics, the
NCAA Men's Basketball Tournament, NCAA Football, PGA Tour events, U.S. Open
tennis and the Daytona 500. The Company also receives on-air promotion on The
Golf Channel's cable television programming, on Sports Byline USA's nationally
syndicated radio broadcasts and on sports talk and other radio stations in
several major metropolitan markets.

To date, the most effective source of advertising for the Company has been
Web advertising. The Company has advertised on a number of leading Web sites,
including Excite, InfoSeek, Magellan, Microsoft Network, Netscape, the San Jose
Mercury News, USA Today, WebCrawler and Yahoo! The Company also actively pursues
links to its Web sites from other popular Web sites, and the Company's Web sites
are listed in the directories of most major search engine sites, including
Excite, InfoSeek, Lycos and Yahoo!

The Company's print marketing has consisted primarily of advertisements in
targeted sports publications, including BASEBALL AMERICA, FANTASY BASEBALL,
LINDY'S professional and college football publications, PRO FOOTBALL WEEKLY, THE
SPORTING NEWS, STREET & SMITH and USA TODAY-BASEBALL WEEKLY, and online
publications, including NETGUIDE, HOME PC, ONLINE ACCESS and MULTIMEDIA ONLINE.
The Company's print advertisements also appear regularly in THE INSIDER-DALLAS
COWBOYS EDITION and more than 25 college sports publications. Most of the
Company's print advertisements are the result of barter or "per inquiry"
agreements where no initial cash payments to the publication are required.

The Company's agreements with sports organizations and affinity groups
typically provide for the Company to receive exposure in any print, television
and marketing vehicles utilized by the organizations or affinity groups to
promote themselves or their products or services and for the distribution of the
Company's promotional materials at events or industry shows in which they
participate.

MEMBER SERVICE AND SUPPORT

The Company believes that member service and support are important to its
ability to attract and retain members. The Company's member support staff
provides toll free telephone support, responds to customer requests concerning
technical aspects of the Company's Web sites or certain third party software and
conducts inbound and outbound telemarketing on an 18 hour a day, seven day a
week basis. The Company does not charge for service and support.

COMPETITION

The market for Internet services and products is relatively new, intensely
competitive and rapidly changing. Since the Internet's commercialization in the
early 1990's, the number of Web sites on the Internet competing for consumers'
attention and spending has proliferated with no substantial barriers to entry,
and the Company expects that competition will continue to intensify. The Company
competes, directly and indirectly, for advertisers, viewers, members, content
providers, merchandise sales and rights to sports events with the following
categories of companies: (i) Web sites targeted to sports enthusiasts generally
(such as ESPN SportsZone and CNN and Sports Illustrated's CNN/SI) or to
enthusiasts of particular sports (such as Web sites maintained by Major League
Baseball, the NFL, the NBA and the NHL); (ii) publishers and distributors of
traditional off-line media (such as television, radio and print), including
those targeted to sports enthusiasts, many of which have established or may
establish Web sites; (iii) general purpose consumer online services such as
America Online,

<PAGE>

CompuServe and Microsoft Network, each of which provides access to
sports-related content and services; (iv) vendors of sports information,
merchandise, products and services distributed through other means, including
retail stores, mail, facsimile and private bulletin board services; and (v) Web
search and retrieval services, such as Excite, InfoSeek, Lycos and Yahoo!, and
other high-traffic Web sites, such as those operated by C|NET and Netscape. The
Company anticipates that the number of its direct and indirect competitors will
increase in the future. Management believes that the Company's most significant
competitors are ESPN SportsZone and CNN/SI, Web sites which offer a variety of
sports content.

The Company believes that the principal competitive factors in attracting
and retaining users and members are the depth, breadth and timeliness of
content, the ability to offer compelling and entertaining content and brand
recognition. Other important factors in attracting and retaining users include
ease of use, service quality and cost. The Company believes that the principal
competitive factor in attracting and retaining content providers and
merchandisers is the Company's ability to offer sufficient incremental revenue
from licensing fees, bounties and online sales of product or services. The
Company believes that the principal competitive factors in attracting
advertisers include the number of users and members of the Company's Web sites,
the demographics of the Company's user and membership bases, price and the
creative implementation of advertisement placements. There can be no assurance
that the Company will be able to compete favorably with respect to these
factors.

Many of the Company's current and potential competitors have longer
operating histories, significantly greater financial, technical and marketing
resources, significantly greater name recognition and substantially larger user
or membership bases than the Company and, therefore, have a significantly
greater ability to attract advertisers and users. In addition, many of these
competitors may be able to respond more quickly than the Company to new or
emerging technologies and changes in Internet user requirements and to devote
greater resources than the Company to the development, promotion and sale of
their services. There can be no assurance that the Company's current or
potential competitors will not develop products and services comparable or
superior to those developed by the Company or adapt more quickly than the
Company to new technologies, evolving industry trends or changing Internet user
preferences. Increased competition could result in price reductions, reduced
margins or loss of market share, any of which would materially and adversely
affect the Company's business, results of operations and financial condition. In
addition, as the Company expands internationally, it may face new competition.
There can be no assurance that the Company will be able to compete successfully
against current and future competitors, or that competitive pressures faced by
the Company would not have a material adverse effect on its business, results of
operations and financial condition.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

The Company is subject, both directly and indirectly, to various laws and
governmental regulations relating to its business. There are currently few laws
or regulations directly applicable to access to or commerce on commercial online
services or the Internet. However, due to the increasing popularity and use of
commercial online services and the Internet, it is possible that a number of
laws and regulations may be adopted with respect to commercial online services
and the Internet. Such laws and regulations may cover issues such as user
privacy, pricing and characteristics and quality of products and services. On
June 26, 1997, the United States Supreme Court held unconstitutional certain
provisions of the Communications Decency Act of 1996, which, among other things,
imposed criminal penalties for transmission of or allowing access to certain
obscene communications over the Internet and other computer services, intended
to protect minors. The adoption of similar laws or regulations in the future may
decrease the growth of commercial online services and the Internet, which could
in turn decrease the demand for the Company's services and products and increase
the Company's costs of doing business or otherwise have an adverse effect on the
Company's business, operating results and financial condition. Moreover, the
applicability to commercial online services and the Internet of existing laws
governing issues such as property ownership, libel and personal privacy is
uncertain and could expose the Company to substantial liability, for which the
Company might not be indemnified by content providers.

<PAGE>

INTELLECTUAL PROPERTY

On March 25, 1997, Weatherline, a company that provides pre-recorded
weather and sports information by telephone, filed a complaint against the
Company in the United States District Court for the Eastern District of
Missouri. Weatherline owns a United States trademark registration for the mark
"Sportsline" for use in promoting the goods and services of others by making
sports information available to customers of participating businesses through
the telephone, and claims to have used the mark for this purpose since 1968. The
complaint alleges that the Company's use of the mark "SportsLine USA" and other
marks utilizing the term "SportsLine" infringes upon and otherwise violates
Weatherline's rights under its registered trademark and damages Weatherline's
reputation. The complaint seeks a preliminary and permanent injunction against
the Company from using marks containing the term "Sportsline" or any other
similar name or mark which would be likely to cause confusion with Weatherline's
mark. The complaint also seeks actual and punitive damages and attorneys' fees.
The Company believes that its use of the "SportsLine" mark and "SportsLine"
derivative marks does not infringe upon or otherwise violate Weatherline's
trademark rights. The Company has filed an answer in which it denied all
material allegations of the complaint and asserted several affirmative defenses.
The action is still in the discovery stage, and both parties have agreed to
attempt to settle the action through court-ordered mediation. In the event the
Company is unable to obtain a favorable settlement, the Company intends to
vigorously defend itself against the action. The legal costs that may be
incurred by the Company in defending itself against this action could be
substantial, and the litigation could be protracted and result in diversion of
management and other resources of the Company. In a separate matter, a request
for an extension of time to oppose the Company's application to register the
current version of the SportsLine USA logo has been filed by Weatherline with
the USPTO. There can be no assurance that the Company will prevail in the
lawsuit or any related opposition proceeding at the USPTO, and an adverse
decision in this lawsuit could result in the Company being prohibited from
further use and registration of the "SportsLine" mark and "SportsLine"
derivative marks and being ordered to pay substantial damages and attorneys'
fees to Weatherline, either of which could have a material adverse effect on the
Company's business, results of operations and financial condition.

<PAGE>

licenses or rights could be obtained on terms satisfactory to the Company, if at
all. The inability to obtain any required license on satisfactory terms could
have a material adverse effect on the Company's business, results of operations
and financial condition. The Company may also be subject to litigation to defend
against claims of infringement of the rights of others or to determine the scope
and validity of the intellectual property rights of others. If competitors of
the Company prepare and file applications in the United States that claim
trademarks used or registered by the Company, the Company may oppose those
applications and have to participate in proceedings before the USPTO to
determine priority of rights to the trademark, which could result in substantial
costs to the Company, even if the eventual outcome is favorable to the Company.
An adverse outcome could require the Company to license disputed rights from
third parties or to cease using such trademarks. Any such litigation would be
costly and divert management's attention, either of which could have a material
adverse effect on the Company's business, results of operations and financial
condition. Adverse determinations in such litigation could result in the loss of
certain of the Company's proprietary rights, subject the Company to significant
liabilities, require the Company to seek licenses from third parties, or prevent
the Company from selling its services, any one of which could have a material
adverse effect on the Company's business, results of operations and financial
condition. In addition, inasmuch as the Company licenses a substantial portion
of its content from third parties, its exposure to copyright infringement
actions may increase; because the Company must rely upon such third parties for
information as to the origin and ownership of such licensed content. The Company
generally obtains representations as to the origins and ownership of such
licensed content and generally obtains indemnification to cover any breach of
any such representations; however, there can be no assurance that such
representations will be accurate or that such indemnification will provide
adequate compensation for any breach of such representations.

In 1996, the Company was issued a United States trademark registration for
its former SportsLine USA logo. The Company has applied to register in the
United States its current SportsLine USA logo and a number of other marks,
several of which include the term "SportsLine." The Company has filed
applications to register "SportsLine" marks in Australia and the United Kingdom.
There can be no assurance that the Company will be able to secure adequate
protection for these trademarks in the United States or in foreign countries.
Many foreign countries have a "first-to-file" trademark registration system; and
thus the Company may be prevented from registering its marks in certain
countries if third parties have previously filed applications to register or
have registered the same or similar marks. It is possible that competitors of
the Company or others will adopt product or service names similar to the
Company's, thereby impeding the Company's ability to build brand identity and
possibly leading to customer confusion. The inability of the Company to protect
its "SportsLine" mark and other marks adequately could have a material adverse
effect on the Company's business, results of operations and financial condition.

The Company grants users of cbs.sportsline.com a license to use the
Company's service under an agreement that prohibits the unauthorized
reproduction or distribution of the Company's licensed and proprietary content.
Despite the Company's efforts to protect its proprietary rights, unauthorized
parties may attempt to copy aspects of the Company's service or to obtain and
use information that the Company or its content providers regard as proprietary.
There can be no assurance that the steps taken by the Company to protect its
proprietary rights will be adequate or that third parties will not infringe or
misappropriate the Company's copyrights, trademarks, service marks and similar
proprietary rights.

EMPLOYEES

The Company had 197 full-time employees as of September 30, 1997, of which
71 were in editorial and operations, 62 were in technical and product
development, 43 were in sales and marketing, and 21 were in finance and
administration. The Company's future success depends in large part upon its
ability to attract and retain highly qualified employees. Competition for such
personnel is intense, and there can be no assurance that the Company will be
able to retain its senior management or other key employees or that it will be
able to attract and retain additional qualified personnel in the future. The
Company's employees are not represented by any collective bargaining
organization, and the Company considers its relations with its employees to be
good.

<PAGE>

INFRASTRUCTURE, OPERATIONS AND TECHNOLOGY

The Company makes its Web sites available through multiple servers,
primarily Sun Microsystems models Ultra 2 (18), Ultra 4000 (2) and Sparc 1000E
(4), as well as two Silicon Graphics and eight IBM-compatible PC servers. The
Company's servers run on Sun Solaris, Microsoft Windows and Microsoft NT
operating systems. The Company uses the Netscape family of Commercial
Applications Software for its Web servers, publishing systems, merchandise
systems and secure credit card capture and billing. The Company has worked
closely with Netscape in the implementation of the Company's Web sites.
Capabilities in place include bulletin boards, mail, chat (including regular
text based chat as well as Virtual Reality worlds with integrated chat), news
groups, merchandising, streaming audio and video, and interactive Java and
Shockwave applications.

The Company maintains all of its computer systems at its Fort Lauderdale,
Florida corporate headquarters. The Company's operations are dependent upon its
ability to protect its systems against damage from fire, hurricanes, power loss,
telecommunications failure, break-ins, computer viruses and other events beyond
the Company's control. The Company maintains access to the Internet through
three third-party providers, each of which maintains a DS3 connection running at
45 megabits per second connected to three routers in the Company's facility.
Redundant fiber optic cables from the Company's building connect with each local
Internet provider's fiber network. The Company's Internet connections are fully
redundant, so that if a failure in the network or equipment of one service
provider occurs, traffic is automatically routed through to the other provider.
All of the Company's computer equipment is powered by an uninterruptible power
supply ("UPS"), which is backed up by a diesel generator designed to provide
power to the UPS within seconds of a power outage. In addition, all of the
Company's production systems are copied to backup tapes each night and stored at
a third party, off-site storage facility. All of the Company's computer
equipment is insured at replacement cost and the Company has developed a
comprehensive, out-of-state disaster recovery plan to respond to system
failures. The Company has an arrangement with Comdisco Disaster Recovery
Services ("CDRS") which provides that in the event the Company's facility cannot
provide service for any reason, the Company's backup tapes would be shipped to
Comdisco's New Jersey facility where they will be loaded to replicate and
restore the Company's service. Moreover, the Company has leased space in CDRS's
Business Recovery Center in Atlanta, Georgia. In the event of a system failure,
the Company's engineering and content production staff would have access to
hardware and software in Atlanta similar to that used at the Company's facility.
The equipment in Atlanta is connected to the production systems in New Jersey
via Comdisco's private high speed network. Notwithstanding the precautions taken
by the Company, any disruption in the Company's Internet access, failure of the
Company's third party providers to handle higher volumes of users or damage or
failure that causes system disruptions or other significant interruptions in the
Company's operations could have a material adverse effect on the Company's
business, results of operations and financial condition.

FACILITIES

The Company's corporate headquarters are located in Fort Lauderdale,
Florida. The Company leases approximately 20,000 square feet in two adjacent
buildings under two leases, which expire in June 2000 and September 2001,
respectively, with an option to extend the latter lease for a five-year term.
The Company currently is seeking additional facilities for its operations, and
believes that it will be able to obtain additional space on commercially
reasonable terms.

LEGAL PROCEEDINGS

On March 25, 1997, a lawsuit alleging various trademark infringement
claims was filed against the Company. See "--Intellectual Property."

From time to time, the Company may be involved in other litigation relating
to claims arising out of its operations in the normal course of business. The
Company is not currently a party to any other legal proceedings, the adverse
outcome of which, individually or in the aggregate, would have a material
adverse effect on the Company's financial position or results of operations.

<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Michael Levy ............... 50 Chairman of the Board, President and
Chief Executive Officer
Kenneth W. Sanders ...... 40 Chief Financial Officer
Mark J. Mariani ......... 40 Executive Vice President, Sales
G. Kenneth Dotson ......... 36 Vice President, Marketing
Thomas C. Eastwood ...... 42 Chief Technology Officer
Andrew S. Sturner ......... 32 Vice President, Business Development
Ross Levinsohn ............ 34 Vice President, Programming and Enterprises
Thomas Wargo ............ 42 Vice President, Vegas Insider
Thomas Jessiman ......... 37 Vice President, International
Dan Leichtenschlag ......... 36 Vice President, Engineering
Thomas Cullen ............ 38 Director
Stephen Fleming ......... 35 Director
Gerry Hogan ............... 51 Director
Richard B. Horrow ......... 42 Director
Joseph Lacob ............ 41 Director
Sean McManus ............ 42 Director
Andrew Nibley ............ 46 Director
Liesl Pike ............... 31 Director
Derek Reisfield ......... 34 Director
James C. Walsh ............ 56 Director
Michael P. Schulhof ...... 54 Director Nominee
</TABLE>

MICHAEL LEVY has served as the President, Chief Executive Officer and
Chairman of the Board of the Company since its inception in February 1994. From
February 1978 through March 1993, Mr. Levy served as President, Chief Executive
Officer and as a director of Lexicon Corporation, a high technology company
specializing in data communications and signal processing technology. From
January 1988 to June 1993, Mr. Levy also served as Chairman of the Board and
Chief Executive Officer of Sports-Tech International, Inc., a company engaged in
the development, acquisition, integration and sale of computer software,
equipment and computer-aided video systems used by professional, collegiate and
high school sports programs. Between June 1993 and February 1994, Mr. Levy was a
private investor.

KENNETH W. SANDERS has served as the Chief Financial Officer of the Company
since September 2, 1997. From January 1996 to August 1997, Mr. Sanders served as
Senior Vice President, Chief Financial Officer of Paging Network, Inc., the
world's largest paging company. From May 1993 to December 1995, Mr. Sanders
served as Executive Vice President, Chief Financial Officer and a director of
Cellstar Corporation, an integrated wholesaler and retailer of cellular phones
and related products. Between July 1979 and April 1993, Mr. Sanders was with
KPMG Peat Marwick, most recently as an Audit Partner from July 1990 to April
1993.

MARK J. MARIANI has served as the Company's Executive Vice President,
Sales since April 1996. From August 1991 to March 1996, Mr. Mariani served as
Executive Vice President of Sports Sales for

<PAGE>

Turner Broadcasting Sales, Inc. From June 1990 to August 1991, Mr. Mariani
served as Senior Vice President and National Sales Manager for CNN in New York,
and from May 1986 to June 1990, Mr. Mariani served as Vice President for CNN
Sales Midwest. Prior to joining Turner Broadcasting, Mr. Mariani served as an
Account Executive for WBBM, an owned and operated CBS television station in
Chicago, Illinois.

G. KENNETH DOTSON has served as the Company's Vice President, Marketing
since its inception in February 1994. From March 1992 to May 1993, Mr. Dotson
served as Regional Marketing Manager for the Smart Corporation, a software and
information management services company. From February 1991 to March 1992, Mr.
Dotson served as a strategic marketing planning consultant for Personal Blood
Storage of America, an FDA licensed blood products laboratory and storage
center. Between May 1993 and February 1994, Mr. Dotson was a consultant.

THOMAS C. EASTWOOD has served as the Company's Chief Technology Officer
since December 1994. From January 1992 to December 1994, Mr. Eastwood served as
Advanced Concepts Development Manager in the Online Services Division of Apple
Computer Company. From January 1981 to January 1992, Mr. Eastwood served in
various management capacities in the Information Services Division of General
Electric Corporation.

ANDREW S. STURNER has served as the Company's Vice President, Business
Development since June 1995. From May 1994 to June 1995, Mr. Sturner served as
Vice President of Business Development for MovieFone, Inc., an interactive
telephone service company. From March 1993 to May 1994, Mr. Sturner served as
President of Interactive Services, an interactive audiotext development company
which he co-founded in 1992. From August 1990 to March 1993, Mr. Sturner was a
bankruptcy associate at the law firm of Stroock & Stroock & Lavan.

ROSS LEVINSOHN has served as the Company's Vice President, Programming and
Enterprises since May 1996. From August 1990 to May 1996, Mr. Levinsohn served
as Director of Production and Marketing Enterprises for Home Box Office ("HBO"),
and from September 1990 to September 1992, Mr. Levinsohn served as HBO's Manager
of Sports Marketing and Worldwide Public Relations.

THOMAS WARGO has served as the Company's Vice President, Vegas Insider
since July 1997. Mr. Wargo served as the Company's Vice President, Program
Management from September 1995 to June 1997. Mr. Wargo served as the Company's
Director of Program Management from March 1995 to August 1995. From April 1993
to May 1994, Mr. Wargo served as Director of Process Automation for Computer
Products, Inc. an industrial automation company. From November 1989 to March
1993, Mr. Wargo served as a Senior Products Manager for Computer Products.
Between May 1994 and March 1995, Mr. Wargo was a consultant.

THOMAS JESSIMAN has served as the Company's Vice President, International
since March 1997. From November 1995 to March 1997, Mr. Jessiman served as the
Director of Business Development for US WEST Media Group's Interactive Services
Division and from September 1994 to November 1995, Mr. Jessiman served as
Director of Business Development in the US WEST Multimedia Group. From January
1992 to September 1994, Mr. Jessiman served as Manager in IBM's Multimedia
Group.

DAN LEICHTENSCHLAG has served as the Company's Vice President, Engineering
since July 1997 and served as the Company's Director of Operations from May 1995
to June 1997. From January 1987 to April 1995, Mr. Leichtenschlag served in
various technical and management capacities including Manager, Genie Systems
Development, General Electric's on-line service, and Manager, UNIX Software
Development.

THOMAS CULLEN, appointed a director of the Company in April 1997, has
served as President of US WEST Media Group's Interactive Services Division since
April 1997. Prior thereto, Mr. Cullen held various positions with US WEST since
1981, including Vice President, Business Development for Interactive Services
Group from April 1992 to April 1997. Mr. Cullen serves as a member of

the Board of Directors of Better Business Online.

<PAGE>

STEPHEN FLEMING, appointed a director of the Company in March 1996, has
served as a General Partner of Alliance Technology Ventures, L.P. since January
1995. From January 1993 to January 1995, Mr. Fleming served as Associate Vice
President of Global Marketing for the Broadband Networks Group of Northern
Telecom. From June 1991 to January 1993, Mr. Fleming served as Director of
Headquarters Staff for the Strategic Marketing Division of Northern Telecom and
from August 1989 to June 1991, Mr. Fleming served as Eastern Region Director of
the Technology Marketing Division of Northern Telecom.

GERRY HOGAN, appointed a director of the Company in November 1996, served
as President and Chief Executive Officer of the Home Shopping Network from
February 1993 to August 1995. Prior thereto, Mr. Hogan served as vice chairman
of Whittle Communications, L.P. from October 1990 to February 1993. From October
1971 to September 1987, Mr. Hogan held various positions at Turner Entertainment
Networks and most recently served as President. Mr. Hogan serves as a member of
the Board of Directors of the Hard Rock Hotel & Casinos and London Fog
Industries, Inc., and as a member of the Board of Trustees of Eckerd College.

RICHARD B. HORROW, appointed a director of the Company in September 1994,
is an attorney and sports development consultant and has served as President of
Horrow Sports Ventures, Inc., a sports consulting firm, since its inception in
May 1988. Since July 1994, Mr. Horrow has been the host of the weekly television
show "The Sports Business Report," which is distributed nationally through Prime
Network/Sports Channel/New Sport affiliates, and has also hosted the weekly
radio show "The Sports Professor," aired nationally on Prime Radio. Mr. Horrow
also currently serves as a consultant for various sports-related matters to The
City of Oklahoma City, the National Football League, the Ladies Professional
Golf Association, the Baltimore Orioles and the National Association of
Professional Baseball Leagues. From March 1991 to March 1992, Mr. Horrow served
as the Executive Director of Golden Bear Sports Management, a sports management
firm.

JOSEPH LACOB, appointed a director of the Company in May 1995, has served
as a general partner of Kleiner Perkins Caufield & Byers, an investment firm,
since May 1987. Mr. Lacob also serves as the Chairman of the Board of CellPro,
Inc., a cell therapy device company, and Microcide Pharmaceuticals, Inc. a
anti-microbial drug manufacturer.

SEAN MCMANUS, appointed a director of the Company in March 1997, has served
as President of CBS Sports since December 1996. From October 1987 to December
1996, Mr. McManus was Senior Vice President U.S. Television Sales and
Programming at Trans World International, the television division of
International Management Group. From August 1981 to October 1987, Mr. McManus
was Vice President Planning and Development at NBC Sports. From September 1979
to August 1981, Mr. McManus served as Associate Producer and Producer at NBC
Sports and from August 1977 to September 1979 he was a Production Assistant to
the Associate Producer at ABC Sports.

ANDREW NIBLEY, appointed a director of the Company in March 1996, has
served as a director and as the Editor and Executive Vice President of Reuters
NewMedia, Inc. since January 1994. From January 1989 to January 1994, Mr.
Nibley was the Editor, America for Reuters America, Inc. He was also named the
Senior Vice President, News and Television of Reuters America, Inc. in July
1993.

LIESL PIKE, appointed a director of the Company in September 1996, has
served as Vice President of TCI Interactive, a venture investment group for TCI
Internet Services, Inc. and Vice President of TCI Music, Inc., a division of TCI
that focuses on the delivery of audio services through cable distribution since
March 1995. From June 1993 to February 1995, Ms. Pike served as Director of
Business Development for US WEST Multimedia Communications Group. From September
1991 to June 1993, Ms. Pike attended Harvard Business School and graduated with
a Master of Business Administration. From June 1987 to June 1991, Ms. Pike was
an Account Executive for MCI.

DEREK REISFIELD, appointed a director of the Company in March 1997, has
served as Vice President of Business Development at CBS since May 1997 and was
Director of Strategic Management of

<PAGE>

Westinghouse Electric Corporation from April 1996 to April 1997. Prior thereto,
Mr. Reisfield held various positions at Mitchell Madison Group, a management
consulting firm, and most recently as a Partner of the firm's Media and
Communications Practice, the Consumer Marketing Practice and Mitchell Madison's
Venture Capital Group from June 1995 to April 1996. From August 1987 to June
1995, Mr. Reisfield held various positions, most recently as a Senior Manager at
McKinsey & Company, a management consulting firm.

JAMES C. WALSH, appointed a director of the Company in August 1994, is an
attorney who has been engaged in the private practice of law since 1968. Mr.
Walsh has also served as the President of Namanco Productions, Inc., a sports
marketing and management firm, since 1969. Namanco Productions, Inc. is the
agent and manager of NFL Hall of Fame quarterback Joe Namath.

MICHAEL P. SCHULHOF has been nominated and has agreed to become a director
of the Company upon the completion of this offering. Currently, Mr. Schulhof is
a private investor. From June 1979 to January 1997, Mr. Schulhof held various
positions at Sony Corporation of America, Inc. and most recently served as
President and Chief Executive Officer from June 1993 to January 1996. Mr.
Schulhof is a trustee of the Museum of Television and Radio, Brandeis
University, Lincoln Center for the Performing Arts, Inc., New York University
Medical Center and the Brookings Institute, serves on the Board of Directors of
the Center on Addiction and Substance Abuse at Columbia University, is a member
of the Council on Foreign Relations and a member of the Investment and Services
Policy Advisory Committee to the U.S. Trade Representative.

Messrs. Fleming, Lacob, Nibley and Cullen and Ms. Pike were elected to the
Board of Directors pursuant to a voting agreement among the Company and the
holders of its outstanding Common Stock and preferred stock, which will
terminate upon completion of this offering. Messrs. McManus and Reisfield were
elected to the Board of Directors pursuant to an agreement between the Company
and CBS, certain provisions of which, including CBS's right to appoint directors
to the Company's Board of Directors, will terminate upon completion of this
offering.

Upon completion of this offering, the Board of Directors will be divided
into three classes, and each director will serve for a staggered three-year
term, or until successors of such class have been elected and qualified. Messrs.
Fleming, Nibley and Walsh and Ms. Pike will initially serve as Class I directors
until the annual meeting of shareholders held in 1998, or until their respective
successors have been elected and qualified. Messrs. Cullen, Lacob, Horrow and
Reisfield will initially serve as Class II directors until the annual meeting of
shareholders held in 1999, or until their respective successors have been
elected and qualified. Messrs. Hogan, Levy, McManus and Schulhof will initially
serve as Class III directors until the annual meeting of shareholders held in
2000, or until their respective successors have been elected and qualified. At
each annual meeting of shareholders, a class of directors will be elected for a
three-year term to succeed the directors or director of the same class whose
terms are then expiring. To the extent there is an increase in the number of
directors, additional directorships resulting therefrom will be distributed
among the three classes so that, as nearly as possible, each class will consist
of an equal number of directors.

Executive officers of the Company are elected by the Board of Directors on
an annual basis and serve until the next annual meeting of shareholders and
until their successors have been duly elected and qualified. There are no family
relationships among any of the executive officers or directors of the Company.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors intends to establish, immediately after
the completion of this offering, an Audit Committee which will be composed of
three non-employee directors. The Audit Committee will be responsible for
reviewing audit functions, including accounting and financial reporting
practices of the Company, the adequacy of the Company's system of internal
accounting control, the quality and integrity of the Company's financial
statements and relations with independent

<PAGE>

auditors. The Company also plans to establish, immediately after the completion
of this offering, a Compensation Committee which will be responsible for
establishing the compensation of the Company's directors, officers and
employees, including salaries, bonuses, commission, and benefit plans, and
administering the Company's stock plans and other forms of or matters relating
to compensation.

DIRECTOR COMPENSATION

The Company will reimburse its directors for out-of-pocket expenses
incurred in connection with their rendering of services as directors. The
Company currently does not intend to pay cash fees to its directors for
attendance at meetings. Non-employee directors will be eligible to receive
options under the Company's 1997 Incentive Compensation Plan. See "--Stock
Plans."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to the formation of the Compensation Committee, the Board of
Directors made all determinations with respect to executive officer
compensation.

EXECUTIVE COMPENSATION

The following table sets forth all compensation awarded to, earned by or
paid for services rendered to the Company in all capacities during the year
ended December 31, 1996 by the Company's Chief Executive Officer and its other
four most highly compensated executive officers (the "Named Executive
Officers").

SUMMARY COMPENSATION TABLE

ANNUAL LONG-TERM
COMPENSATION (1) COMPENSATION AWARDS
---------------------- SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS UNDERLYING OPTIONS COMPENSATION
- --------------------------- ---------------------- ------------------- ------------
<S> <C> <C> <C> <C>
Michael Levy,
President and Chief Executive Officer ...... $167,887 $50,000 -- $ 22,922 (2)

Mark J. Mariani,
Executive Vice President, Sales ............ 112,243 10,000 80,000 8,205 (3)

G. Kenneth Dotson,
Vice President, Marketing .................. 132,125 10,000 -- --

Thomas C. Eastwood,
Chief Technology Officer .................. 110,500 20,000 10,000 --

Andrew S. Sturner,
Vice President, Business Development ...... 101,934 10,000 -- --
</TABLE>

- ----------------
(1) The column for "Other Annual Compensation" has been omitted because there is
no compensation required to be reported in such column. The aggregate amount
of perquisites and other personal benefits provided to each Named Executive
Officer is less than 10% of the total annual salary and bonus of such
officer.

(2) Represents premiums paid for life and disability insurance policies for the
benefit of Mr. Levy.

(3) Represents reimbursement of moving expenses.

<PAGE>

The following table sets forth certain information concerning grants of
stock options made during 1996 to each Named Executive Officer.

OPTION GRANTS IN FISCAL YEAR 1996

POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK
SECURITIES % OF TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED FOR OPTION TERM (2)
OPTIONS TO EMPLOYEES EXERCISE PRICE ----------------------
NAME GRANTED (1) IN FISCAL YEAR PER SHARE EXPIRATION DATE 5% 10%
- ---- ------------- ---------------- --------------- ---------------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Michael Levy ............ -- -- $ -- -- $ -- $ --
Mark J. Mariani ......... 80,000 23.0 0.63 4/21/2006 31,445 79,687
G. Kenneth Dotson ...... -- -- -- -- -- --
Thomas C. Eastwood . 10,000 2.9 0.63 5/13/2006 3,931 9,961
Andrew S. Sturner ...... -- -- -- -- -- --
</TABLE>

- ----------------
(1) All such options were granted under the Company's 1995 Stock Option Plan and
become exercisable in installments over a period of four years. Under the
1995 Stock Option Plan, these options will become immediately exercisable in
the event of certain change of control transactions involving the Company.
See "--Stock Plans."

(2) In accordance with the rules of the Commission, the potential realizable
values for such options shown in the table are based on assumed rates of
stock price appreciation of 5% and 10% compounded annually from the date the
respective options were granted to their expiration date. These assumed
rates of appreciation do not represent the Company's estimate or projection
of the appreciation of shares of Common Stock of the Company.

The following table sets forth information concerning exercisable and
unexercisable stock options held as of December 31, 1996 by each of the Named
Executive Officers. No options were exercised by the Named Executive Officers in
1996.

FISCAL YEAR END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1996 (1) DECEMBER 31, 1996 (2)
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Michael Levy ............ -- -- $ -- $ --
Mark J. Mariani ......... -- 80,000 -- 350,000
G. Kenneth Dotson ...... 30,208 19,792 132,160 86,590
Thomas C. Eastwood ...... 10,000 40,000 43,750 175,000
Andrew S. Sturner ......... 15,000 25,000 65,625 109,375
</TABLE>

- ----------------
(1) Exercisable in accordance with the provisions described in Note (1) to the
table entitled "Option Grants in Fiscal Year 1996."

(2) The fair market value of the Company's Common Stock at December 31, 1996 is
estimated to have been approximately $5.00 per share.

EMPLOYMENT AGREEMENTS

The Company has entered into a three-year employment agreement with Kenneth
W. Sanders, pursuant to which he will serve as Chief Financial Officer. Mr.
Sanders will receive an annual base salary of $210,000 and such bonuses as may
be awarded from time to time by the Board or any compensation committee thereof.
Upon commencement of his employment, the Company granted Mr. Sanders options to
purchase 80,000 shares of Common Stock at an exercise price of $10.00 per share.
If the agreement is terminated by the Company other than by reason of death,
Disability (as defined) or Cause (as defined), or by Mr. Sanders for Good Reason

<PAGE>

(generally defined as a material breach by the Company of the agreement), the
Company will continue to pay Mr. Sanders for a period of six months his base
salary plus, an additional amount not to exceed $105,000 depending on the value

<PAGE>

during such six-month period of the stock options granted to him. The agreement
prohibits Mr. Sanders from competing with the Company during his employment and
for a period of two years after termination of his employment.

STOCK PLANS

1995 STOCK OPTION PLAN. The Company's 1995 Stock Option Plan (the "1995
Plan") was adopted by the Board of Directors in August 1995 and approved by the
Company's stockholders in March 1996. The 1995 Plan provides for the grant of
"incentive stock options," within the meaning of the Internal Revenue Code, to
employees and officers of the Company, and non-qualified stock options to
employees, consultants, directors and officers of the Company. Up to 1,200,000
shares of Common Stock are authorized for issuance under the 1995 Plan. As of
September 30, 1997, options to purchase a total of 1,096,792 shares of Common
Stock at a weighted average exercise price of $4.69 were outstanding under the
1995 Plan (of which options to purchase approximately 280,300 shares were then
exercisable). Upon commencement of this offering, the Company intends to amend
approximately 341,000 of the stock options outstanding under the 1995 Plan to
lower the exercise prices thereof to $8.00 per share.

The 1995 Plan is administered by the Board of Directors, which has the
authority to select the optionees and determine the terms of the options
granted, including (i) the number of shares subject to each option, (ii) option
exercise terms, (iii) the exercise price of the option (which in the case of an
incentive stock option cannot be less that the fair market value of the Common
Stock as of the date of grant), (iv) the duration of the option, and (v) the
time, manner and form of payment upon exercise of an option. An option is not
transferable by the optionholder except by will or by the laws of descent and
distribution. Generally, no incentive stock option may be exercised more than
three months following termination of employment, unless the termination is due
to death or disability, in which case the option is exercisable for a maximum of
twelve months after such termination or unless the termination is due to the
employee's misconduct, in which case the option shall terminate immediately.

1997 INCENTIVE COMPENSATION PLAN. The Company has adopted, effective upon
completion of this offering, the Incentive Plan which is designed to assist the
Company in attracting, motivating, retaining and rewarding high-quality
executives and other employees, officers, directors and independent contractors
(collectively, the "Participants") by enabling the Participants to acquire or
increase a proprietary interest in the Company, as well as providing the
Participants with annual and long term performance incentives to expend their
maximum efforts in the creation of shareholder value. Pursuant to the Incentive
Plan, the Company may grant Participants stock options, stock appreciation
rights, restricted stock, deferred stock, other stock-related awards and
performance or annual incentive awards that may be settled in cash, stock or
other property (collectively, "Awards"). A committee comprised of at least two
non-employee directors (the "Committee"), or in the absence thereof the Board of
Directors, administers and interprets the Incentive Plan and is authorized to
grant Awards to all eligible Participants.

The total number of shares of Common Stock that may be subject to the
granting of Awards under the Incentive Plan shall be equal to: (i) 2,000,000
shares, plus (ii) the number of shares with respect to Awards previously granted
under the Incentive Plan that terminate without being exercised, expire, are
forfeited or canceled, and the number of shares of Common Stock that are
surrendered in payment of any Awards or any tax withholding requirements. No
Awards have been granted under the Incentive Plan.

The following is a description of the types of Awards that may be granted
under the Incentive Plan:

STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. The Committee is authorized to
grant stock options, including incentive and non-qualified stock options, and
stock appreciation rights ("SARs") entitling the Participant to receive the
amount by which the fair market value of a share of Common Stock on the date
of exercise exceeds the grant price of the SAR. The exercise price

<PAGE>

per share subject to an option and the grant price of a SAR are determined by
the Committee, but must not be less than the fair market value of a share of
Common Stock on the date of grant. Each option is exercisable after the
period or periods specified in the related option agreement, but no option
may be exercised after the expiration of ten years from the date of grant.
Options granted to an individual who owns (or is deemed to own) at least 10%
of the total combined voting power of all classes of stock of the Company
must have an exercise price of at least 110% of the fair market value of the
Common Stock on the date of grant and a term of no more than five years.
Options may be exercised by payment of the exercise price in cash, shares of
Common Stock, outstanding Awards or other property having a fair market value
equal to the exercise price, as the Committee may determine from time to
time.

RESTRICTED AND DEFERRED STOCK. The Committee is authorized to grant
restricted stock and deferred stock. Restricted stock is a grant of shares of
Common Stock which may not be sold or disposed of, and which may be forfeited
in the event of certain terminations of employment, prior to the end of a
restricted period specified by the Committee. A Participant granted
restricted stock generally has all the rights of a shareholder of the
Company, unless otherwise determined by the Committee. An Award of deferred
stock confers upon the Participant the right to receive shares of Common
Stock at the end of a specified deferral period, subject to possible
forfeiture of the Award in the event of certain terminations of employment
prior to the end of a specified restricted period. Prior to settlement, an
Award of deferred stock carries no voting or dividend rights. The restricted
or deferral period for restricted stock or deferred stock Awards may not be
less than three years unless the Award is subject to performance conditions,
in which case the period will not be less than one year.

BONUS STOCK AND AWARDS IN LIEU OF CASH OBLIGATIONS--The Committee is
authorized to grant shares of Common Stock as a bonus, free of restrictions,
or to grant shares of Common Stock or other Awards in lieu of cash under the
Incentive Plan, subject to such terms as the Committee may specify.

OTHER STOCK-BASED AWARDS--The Committee is authorized to grant Awards that
are denominated or payable in, valued by reference to, or otherwise based on
or related to shares of Common Stock. Such Awards might include convertible
or exchangeable debt securities, other rights convertible or exchangeable
into shares of Common Stock, purchase rights for shares of Common Stock,
Awards with value and payment contingent upon performance by the Company or
any other factors designated by the Committee, and Awards valued by reference
to the book value of shares of Common Stock or the value of securities of or
the performance of specified subsidiaries or business units. The Committee
determines the terms and conditions of such Awards.

The right of a Participant to exercise or receive a grant or settlement of
an Award, and the timing thereof, may be subject to such performance conditions
(including subjective individual goals) as may be specified by the Committee. In
addition, the Incentive Plan authorizes specific annual incentive Awards, which
represent a conditional right to receive cash, shares of Common Stock or other
Awards upon achievement of certain pre-established performance goals and
subjective individual goals during a specified fiscal year.

Awards may be settled in the form of cash, shares of Common Stock, other
Awards or other property in the discretion of the Committee. The Committee may
condition any payment relating to an Award on the withholding of taxes and may
provide that a portion of any shares of Common Stock or other property to be
distributed will be withheld (or previously acquired shares of Common Stock or
other property surrendered by the Participant) to satisfy withholding and other
tax obligations. Awards granted under the Incentive Plan generally may not be
pledged or otherwise encumbered and are not transferable except by will or by
the laws of descent and distribution, or to a designated beneficiary upon the
Participant's death, except that the Committee may, in its discretion, permit
transfers for estate planning or other purposes subject to any applicable
restrictions.

The Incentive Plan also provides that each non-employee director who is not
affiliated with or a designee of a beneficial owner of more than 5% of the
Common Stock will automatically receive (i) for

<PAGE>

those directors elected or appointed after the completion of the offering, an
option to purchase 12,000 shares of Common Stock on the date of his or her
election or appointment and (ii) for all directors, on the date of the Company's
annual meeting of shareholders, an option to purchase 3,000 shares of Common
Stock. Such options have a term of 10 years and become exercisable at the rate
of 25% per year commencing on the first anniversary of the date of grant;
provided, however, that the options shall be fully exercisable in the event
that, while serving as a director, the non-employee director dies, suffers a
"disability," or "retires" (within the meaning of such terms as defined in the
Incentive Plan). The per share exercise price of options granted to non-employee
directors will be equal to the fair market value of a share of Common Stock on
the date such option is granted. Unless otherwise extended in the sole
discretion of the Compensation Committee, the unexercised portion of any formula
option grant will become null and void (i) three months after the date on which
the non-employee director ceases to be a director for any reason other than the
non-employee director's willful misconduct or negligence, disability, death or
retirement, (ii) immediately in the event of the non-employee director's willful
misconduct or negligence, (iii) at the expiration of its original term if the
non-employee ceases to be a director by reason or his or her retirement, or (iv)
one year after the non-employee director ceases to be a director by reason of
his or her disability or death.

EMPLOYEE STOCK PURCHASE PLAN. The Company has reserved for issuance 500,000
shares of Common Stock under the Company's 1997 Employee Stock Purchase Plan
(the "Purchase Plan"), which will become effective upon completion of the
offering. All eligible employees (as defined therein), other than holders of
stock or options to purchase 5% or more of the Company's Common Stock, employed
by the Company from time to time may elect to participate in the Purchase Plan.
Under the Purchase Plan, participants are granted a purchase right to acquire
shares of Common Stock at semi-annual intervals, during 12-month offering
periods, with the exception of the first period, which will commence on the date
of this Prospectus and end on December 31, 1998. The purchase price for the
shares under the Purchase Plan will be paid by the employee through periodic
payroll deductions and/or lump sum payments not to exceed 25% of the
participant's total annual compensation. The purchase price per share will be
equal to 85% of the lower of (i) the fair market value of the Common Stock at
the beginning of the offering period (which, in the case of the first offering
period, would equal the initial public offering price of the Common Stock) or,
if greater, the fair market value of the Common Stock on the date the
participant enrolls in the Purchase Plan, or (ii) the fair market value per
share of the Common Stock on the purchase date. In no event may a participant
purchase more than $25,000 of Common Stock pursuant to the Purchase Plan in any
calendar year.

401(K) PLAN

The Company maintains a 401(k) retirement savings plan (the "401(k) Plan").
All employees of the Company, meeting certain minimum eligibility requirements,
are eligible to participate in the 401(k) Plan. The 401(k) Plan provides that
each participant may contribute up to 15% of his or her pre-tax gross
compensation (but not greater than a statutorily prescribed annual limit). The
percentage elected by certain highly compensated participants may be required to
be lower. The 401(k) Plan permits, but does not require, additional
contributions to the 401(k) Plan by the Company. All amounts contributed by
employee participants in conformance with plan requirements and earnings on such
contributions are fully vested at all times.

<PAGE>

CERTAIN TRANSACTIONS

CBS AGREEMENT

On March 5, 1997, the Company entered into a five-year agreement with CBS,
pursuant to which, among other things, the Company's flagship Internet site was
renamed "cbs.sportsline.com." The term of the CBS agreement expires on December
31, 2001. The CBS agreement provides for cbs.sportsline.com to receive certain
minimum amounts of advertising and on-air promotion, including at least $7
million of advertising and promotion during the remainder of 1997, at least $11
million during 1998 and 1999 and at least $14 million during 2000 and 2001. The
Company has the right to use certain CBS logos and television-related sports
content on cbs.sportsline.com and in connection with the operation and promotion
of that Web site.

In consideration of CBS's advertising and promotional efforts and its
license to the Company of the right to use certain CBS logos and
television-related sports content, CBS will receive 3,100,000 shares of Common
Stock over the term of the CBS agreement (752,273, 735,802, 558,988, 567,579 and
485,358 shares in 1997, 1998, 1999, 2000 and 2001, respectively). CBS will also
have the right to receive 60% of the Company's advertising revenue on
cbs.sportsline.com pages related to certain "signature events" (such as the NCAA
Men's Basketball Tournament, the 1998 Winter Olympics, U.S. Open tennis, PGA
Tour events and the Daytona 500) and 50% of the Company's advertising revenue on
cbs.sportsline.com pages containing other CBS television-related sports content.
The CBS agreement also provides that the Company shall issue to CBS on the first
business day of each contract year warrants to purchase 380,000 shares of Common
Stock at per share exercise prices ranging from $10.00 in 1997 to $30.00 in
2001. Such warrants are exercisable at any time during the contract year in
which they are granted.

US WEST AGREEMENT

In connection with its September 1996 investment in Series C Preferred
Stock, US WEST Interactive Services, Inc. ("US WEST") and the Company entered
into a two-year agreement that provides for the Company and US WEST to (i)
establish hypertext links and certain cross promotional pages between the
Company's Web sites and US WEST's "Dive In" local Internet sites, (ii) jointly
develop original local sports content for the "Dive In" service and (iii) engage
in certain joint promotional activities. The Company also agreed to offer US
WEST the right of first refusal to provide any "yellow page" offering that the
Company considers launching during the term of the agreement. The agreement also
provides for the Company to pay US WEST royalties based on the number of
customers referred from US WEST's Web sites who purchase memberships on the
Company's Web sites. The Company also issued US WEST warrants to purchase
960,000 shares of Common Stock at an exercise price of $8.25 per share. Such
warrants were exercised in March 1997.

REUTERS NEWMEDIA AGREEMENT

In March 1996, the Company and Reuters NewMedia, Inc. ("Reuters NewMedia")
entered into an agreement pursuant to which the Company agreed to provide
Reuters NewMedia a 60-day exclusive negotiation period with respect to (i) the
provision of non-U.S. sports news and information for any Internet, wireless or
other proprietary online service marketed to foreign countries or regions that
the Company considers launching, (ii) the branding of such service and (iii) an
investment in such service. The Company also agreed to provide Reuters NewMedia
a reasonable opportunity to match the terms for such an agreement offered by
another party if such terms are equivalent or less favorable to the Company than
those offered by Reuters NewMedia. The Company also agreed (i) subject to
technological feasibility, to negotiate an agreement to develop a customized
version of cbs.sportsline.com available only to Reuters NewMedia subscribers
through a Reuters NewMedia product, (ii) to grant Reuters NewMedia the exclusive
right to redistribute the Company's news and information content within a
Reuters NewMedia product as part of a sports news service, subject to
negotiation of royalties and the agreement of the Company's third party content
providers and (iii) to provide Reuters NewMedia an opportunity to license to the
Company content specifically related to

<PAGE>

sports outside the United States, if such content is already owned, licensed or
produced by Reuters NewMedia, and to license such content from Reuters NewMedia
if its proposal is equivalent to or better than proposals received from third
parties.

KLEINER PERKINS CAUFIELD & BYERS GUARANTY

In December 1995, Kleiner Perkins Caufield & Byers VII ("KPCB VII")
guaranteed a $1,500,000 loan the Company received from Silicon Valley Bank. In
return for executing the guaranty, the Company issued KPCB VII warrants to
purchase 30,000 shares of Common Stock, which are exercisable until December 13,
2000 at a price of $2.50 per share.

HORROW CONSULTING AGREEMENT

In September 1994, the Company and Horrow Sports Ventures, an entity owned
by Richard Horrow, a director of the Company, entered into a consulting
agreement that, among other things, provides for Horrow Sports Ventures and Mr.
Horrow to assist the Company in obtaining access to representatives of
professional sports leagues, college sports associations and television networks
and developing strategic, promotional and marketing plans. In consideration of
the services rendered pursuant to the agreement, Mr. Horrow received warrants to
purchase 10,000 shares of Common Stock at an exercise price of $5.00 per share
in August 1994 and received warrants to purchase an additional 10,000 shares of
Common Stock at an exercise price of $5.00 per share in January 1997. Horrow
Sports Ventures currently receives a consulting fee of $5,000 per month.

SCHULHOF CONSULTING AGREEMENT

In June 1996, the Company and Michael P. Schulhof entered into a two year
consulting agreement that provides for Mr. Schulhof to consult with and advise
the Company from time to time with respect to corporate, business and marketing
strategy. In consideration of the services to be rendered pursuant to the
agreement, Mr. Schulhof received warrants to purchase 40,000 shares of Common
Stock at an exercise price of $5.00 per share.

PLANNED LICENSING AGREEMENT

In August 1994, the Company and Planned Licensing, Inc., a wholly owned
subsidiary of Namanco Productions, Inc. ("Planned Licensing"), entered into a
five-year agreement pursuant to which Planned Licensing agreed to cause Joe
Namath to provide certain services for the Company, including endorsements of
the Company's products. James C. Walsh, a director of the Company, is the
president and sole stockholder of Namanco Productions, Inc. The Company has the
right to renew the agreement for three additional five-year terms. Under the
agreement, the Company is obligated to pay Planned Licensing royalties equal to
$0.15 per month for each individual who becomes a member during the term of the
agreement and remains a member for three months, plus, during each renewal term,
an additional $0.05 per month per member if the total royalties during the last
calendar year prior to the renewal term were less than $500,000. The royalties
paid to Planned Licensing for the period from inception (February 23, 1994) to
December 31, 1994, the years ended December 31, 1995 and 1996 and the nine
months ended September 30, 1997 were $0, $932, $18,645 and $40,913,
respectively.

<PAGE>

PRINCIPAL SHAREHOLDERS

The following table sets forth information with respect to the beneficial
ownership of the Company's outstanding Common Stock as of September 30, 1997,
and as adjusted to reflect the sale of the Common Stock offered hereby, by (i)
each person or entity known by the Company to be the beneficial owner of more
than 5% of the outstanding shares of Common Stock, (ii) each director, director
nominee and Named Executive Officer of the Company and (iii) all directors and
executive officers of the Company as a group.

SHARES BENEFICIALLY
OWNED SHARES BENEFICIALLY
PRIOR TO THE OFFERING OWNED
(2) AFTER THE OFFERING (2)
----------------------- ----------------------
NAME OF BENEFICIAL OWNER (1) NUMBER PERCENT NUMBER PERCENT
- ---------------------------- ----------- --------- ----------- --------
<S> <C> <C> <C> <C>
US WEST Interactive Services, Inc. ......... 1,995,852 19.7% 1,995,852 14.6%
Kleiner Perkins Caufield & Byers (3) ...... 1,952,221 18.7 1,952,221 14.0
Michael Levy .............................. 1,520,000 15.0 1,520,000 11.1
CBS Inc. (4) .............................. 1,132,273 10.8 1,132,273 8.1
Estate of Burk Zanft (5) .................. 1,000,000 9.7 1,000,000 7.2
Reuters NewMedia, Inc. ..................... 845,672 8.3 845,672 6.2
TCI Online Sports Holdings, Inc. (6) ...... 666,666 6.6 666,666 4.9
Mark J. Mariani (7) ........................ 31,667 * 31,667 *
G. Kenneth Dotson (8) ..................... 81,667 * 81,667 *
Thomas C. Eastwood (9) ..................... 22,917 * 22,917 *
Andrew S. Sturner (10) ..................... 24,167 * 24,167 *
Thomas Cullen (11) ........................ 1,995,852 19.7 1,995,852 14.6
Stephen Fleming (12) ..................... 481,363 4.8 481,363 3.5
Gerry Hogan (13) ........................... -- * --
Richard B. Horrow (14) ..................... 10,000 * 10,000 *
Joseph Lacob (15) ........................... 1,952,221 18.7 1,952,221 14.0
Andrew Nibley (16) ........................ 845,672 8.3 845,672 6.2
Sean McManus .............................. -- * -- *
Liesl Pike ................................. -- * -- *
Derek Reisfield ........................... -- * -- *
James C. Walsh (17) ........................ 200,000 2.0 200,000 1.5
Michael P. Schulhof (18) .................. -- * --
All directors and executive officers
as a group (21 persons) (19) ............ 7,199,441 67.1 7,199,441 50.6
</TABLE>

- ----------------
* Less than 1% of the outstanding Common Stock.

(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is c/o SportsLine USA, Inc., 6340 N.W. 5th Way, Fort Lauderdale,
Florida 33309. Except as otherwise indicated, such beneficial owners have
sole voting and investment power with respect to all shares of Common Stock
owned by them, except to the extent such power may be shared with a spouse.

(2) The number of shares of Common Stock deemed outstanding prior to this
offering includes (i) 4,334,089 shares of Common Stock outstanding as of
September 30, 1997, (ii) an aggregate of 5,798,434 shares of Common Stock
issuable upon conversion of all outstanding shares of preferred stock and
(iii) shares issuable pursuant to options and warrants held by the
respective person or group which may be exercised within 60 days after
September 30, 1997 ("presently exercisable stock options" and "presently
exercisable warrants," respectively), as set forth below. Pursuant to the
rules of the Securities and Exchange Commission, presently exercisable
stock options and presently exercisable warrants are deemed to be
outstanding and to be beneficially owned by the person or group holding
such options or warrants for the purpose of computing the percentage
ownership of such person or group, but are not treated as outstanding for
the purpose of computing the percentage ownership of any other person or
group.

<PAGE>

(3) Reflects (i) 1,581,666 shares held of record and 322,500 shares subject to
presently exercisable warrants held by Kleiner Perkins Caufield & Byers VII
and (ii) 40,555 shares held of record and 7,500 shares subject to presently
exercisable warrants held by KPCB Information Sciences Zaibatsu Fund II.
The address of Kleiner Perkins Caufield & Byers is 2750 Sand Hill Road,
Menlo Park, California 94025.

(4) Reflects (i) 752,273 shares held of record and (ii) 380,000 shares subject
to presently exercisable warrants. Does not include any additional shares
of Common Stock and warrants to purchase Common Stock to be issued to CBS
after March 31, 1997 pursuant to the CBS agreement. See "Certain
Transactions--CBS Agreement." The address of CBS is 51 West 52nd Street,
New York, New York 10019.

(5) Reflects (i) 800,000 shares held of record and (ii) 200,000 shares subject
to presently exercisable warrants. The address of the Estate of Burk Zanft
is 745 Downing Street, Teaneck, New Jersey 07666.

(6) The address of TCI Online Sports Holdings, Inc. is 5619 DTC Parkway,
Englewood, Colorado 80111.

(7) Includes 31,667 shares subject to presently exercisable stock options.
Excludes 56,333 shares issuable upon exercise of stock options held by Mr.
Mariani not exercisable within 60 days.

(8) Reflects (i) 40,000 shares held of record and (ii) 41,667 shares subject to
presently exercisable stock options. Excludes 14,333 shares issuable upon
exercise of stock options held by Mr. Dotson not exercisable within 60
days.

(9) Includes 22,917 shares subject to presently exercisable stock options.
Excludes 27,083 shares issuable upon exercise of stock options held by Mr.
Eastwood that are not exercisable within 60 days.

(10) Includes 24,167 shares subject to presently exercisable stock options.
Excludes 31,833 shares issuable upon exercise of stock options held by Mr.
Sturner that are not exercisable within 60 days.

(11) Reflects shares held of record by US WEST of which Mr. Cullen is
President. Mr. Cullen disclaims beneficial ownership of such shares except
to the extent of his pecuniary interest therein. The address of US WEST
and Mr. Cullen is 9000 East Nichols, Englewood, Colorado 80122.

(12) Reflects shares held of record by Alliance Technology Ventures, L.P. and
ATV/MFJ Parallel Fund, L.P. of which Mr. Fleming is a general partner of
both of these entities. Mr. Fleming disclaims beneficial ownership of such
shares, except to the extent of his pecuniary interest therein.

(13) Excludes 40,000 shares issuable upon exercise of warrants held by Mr. Hogan
that are not exercisable within 60 days.

(14) Includes 10,000 shares subject to presently exercisable warrants. Excludes
10,000 shares issuable upon exercise of warrants held by Mr. Horrow that
are not exercisable within 60 days.

(15) Reflects shares held of record and shares subject to presently exercisable
warrants held by various funds associated with Kleiner Perkins Caufield &
Byers of which Mr. Lacob is a general partner. Mr. Lacob disclaims
beneficial ownership of such shares except to the extent of his pecuniary
interest therein. See note (3) above. The address of Mr. Lacob is 2750 Sand
Hill Road, Menlo Park, California 94025.

(16) Reflects shares held of record by Reuters NewMedia of which Mr. Nibley is a
director, the Editor and Executive Vice President. Mr. Nibley disclaims
beneficial ownership of such shares except to the extent of his pecuniary
interest therein. The address of Reuters NewMedia and Mr. Nibley is 1700
Broadway, New York, New York 10019.

(17) Reflects (i) 100,000 shares held of record and (ii) 100,000 shares subject
to presently exercisable warrants.

(18) Excludes 40,000 shares issuable upon exercise of warrants held by Mr.
Schulhof that are not exercisable within 60 days.

(19) Includes the information in the notes above, as applicable. Reflects (i)
6,605,108 shares held of record, (ii) 153,333 shares subject to presently
exercisable stock options and (iii) 440,000 shares subject to presently
exercisable warrants. Excludes (i) 319,667 shares issuable upon exercise of
stock options and (ii) 90,000 shares issuable upon exercise of warrants not
exercisable within 60 days.

<PAGE>

DESCRIPTION OF CAPITAL STOCK

Effective upon the completion of this offering, the authorized capital
stock of the Company will consist of 50,000,000 shares of Common Stock, $0.01
par value per share, and 1,000,000 shares of preferred stock, $0.01 par value
per share.

COMMON STOCK

As of September 30, 1997, there were 10,132,523 shares of Common Stock
outstanding and held of record by 31 stockholders, after giving effect to the
conversion of all outstanding shares of preferred stock upon the closing of this
offering. Based upon the number of shares outstanding as of that date and giving
effect to the issuance of the 3,500,000 shares of Common Stock offered hereby,
there will be 13,632,523 shares of Common Stock outstanding upon the completion
of this offering.

Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be declared by the Board of Directors out of
funds legally available therefor, subject to any preferential dividend rights of
outstanding preferred stock. Upon the liquidation, dissolution or winding up of
the Company, the holders of Common Stock are entitled to receive ratably the net
assets of the Company available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding preferred stock.
Holders of the Common Stock have no preemptive, subscription, redemption or
conversion rights. The outstanding shares of Common Stock are, and the shares
offered by the Company in this offering will be, when issued and paid for, fully
paid and nonassessable. The rights, preferences and privileges of holders of
Common Stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock which the Company may
designate and issue in the future. Upon the completion of this offering, there
will be no shares of preferred stock outstanding.

PREFERRED STOCK

As of the date of this Prospectus, there are outstanding 3,000,000 shares
of Series A Preferred Stock, 6,162,766 shares of Series B Preferred Stock and
5,333,333 shares of Series C Preferred Stock. All outstanding shares of
preferred stock will be converted into an aggregate of 5,798,434 shares of
Common Stock upon the completion of this offering and such shares of preferred
stock will no longer be authorized, issued or outstanding.

Upon the completion of this offering, the Board of Directors will be
authorized, without further shareholder approval, to issue from time to time up
to an aggregate of 1,000,000 shares of preferred stock in one or more series and
to fix or alter the designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each such series thereof, including
the dividend rights, dividend rates, conversion rights, voting rights, terms of
redemption (including sinking fund provisions), redemption price or prices,
liquidation preferences and the number of shares constituting any series or
designations of such series. See "--Anti-takeover Effects of Certain Provisions
of Delaware Law and the Company's Certificate of Incorporation and Bylaws." The
Company has no present plans to issue any shares of preferred stock.

OPTIONS AND WARRANTS

As of September 30, 1997, options to purchase a total of 1,096,792 shares
("Option Shares") of Common Stock were outstanding; approximately 474,000 of the
Option Shares are subject to lock-up agreements. Beginning 90 days after the
date of this Prospectus, approximately 622,800 Option Shares which are not
subject to lock-up agreements will be eligible for sale in reliance on Rule 701.
The total number of shares of Common Stock that may be subject to the granting
of Awards under the Incentive Plan shall be equal to: (i) 2,000,000 shares, plus
(ii) the number of shares with respect to Awards

<PAGE>

previously granted under the Incentive Plan that terminate without being
exercised, expire, are forfeited or canceled, and the number of shares of
Common Stock that are surrendered in payment of any Awards or any tax
withholding requirements. No Awards have been granted under the Incentive Plan.
See "Management--Stock Plans" and "Shares Eligible for Future Sale."

As of September 30, 1997, warrants to purchase a total of 1,862,188 shares
("Warrant Shares") of Common Stock were outstanding; approximately 1,730,000 of
the Warrant Shares are subject to lock-up agreements. Approximately 132,200
Warrant Shares which are not subject to lock-up agreements will be eligible for
immediate sale in reliance on Rule 144 or Rule 701, beginning 90 days after the
date of this Prospectus. See "Shares Eligible for Future Sale."

REGISTRATION RIGHTS

Upon the completion of this offering, certain securityholders of the
Company (the "Rightsholders") will be entitled to require the Company to
register under the Securities Act up to a total of 5,798,434 shares (the
"Registrable Shares") of outstanding Common Stock pursuant to the terms of an
Amended and Restated Investors' Rights Agreement (the "Investors' Rights
Agreement"). The Investors' Rights Agreement provides that in the event the
Company proposes to register any of its securities under the Securities Act at
any time or times, the Rightsholders, subject to certain exceptions, shall be
entitled to include Registrable Shares in such registration. However, the
managing underwriter of any such offering may exclude for marketing reasons some
of such Registrable Shares from such registration. In addition, certain
Rightsholders have additional rights, subject to certain conditions and
limitations, to require the Company to prepare and file a registration statement
under the Securities Act with respect to their Registrable Shares. The Company
is generally required to bear the expenses of all such registrations, except
underwriting discounts and commissions. The Company has also granted CBS
registration rights for all shares issuable to CBS pursuant to the CBS agreement
(or upon the exercise of warrants granted pursuant to the CBS agreement) on
terms and conditions similar to the registration rights held by the
Rightsholders under the Investors' Rights Agreement.

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF DELAWARE LAW AND THE COMPANY'S
CERTIFICATE OF INCORPORATION AND BYLAWS

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law (the "DGCL"). Subject to certain exceptions, Section 203
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the interested stockholder attained such status with the
approval of the Board of Directors or unless the business combination is
approved in a prescribed manner. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person who, together with affiliates and associates, owns, or
within three years did own, 15% or more of the corporation's voting stock. This
statute could prohibit or delay the accomplishment of mergers or other takeover
or change in control attempts with respect to the Company and, accordingly, may
discourage attempts to acquire the Company.

In addition, certain provisions of the Certificate and Bylaws, which will
be in effect upon completion of this offering and are summarized in the
following paragraphs, may be deemed to have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a shareholder
might consider in its best interest, including those attempts that might result
in a premium over the market price for the shares held by shareholders.

CLASSIFIED BOARD OF DIRECTORS. The Company's Board of Directors will be
divided into three classes of directors serving staggered three-year terms. As a
result, approximately one-third of the Board of Directors will be elected each
year. These provisions, when coupled with the provision of the Certificate
authorizing only the Board of Directors to fill vacant directorships or increase
the size of the Board, may deter a shareholder from removing incumbent directors
and simultaneously gaining control of the Board of Directors by filling the
vacancies created by such removal with its own nominees.

<PAGE>

SHAREHOLDER ACTION; SPECIAL MEETING OF SHAREHOLDERS. The Certificate
provides that shareholders may not take action by written consent, but only at
duly called annual or special meetings of shareholders. The Certificate further
provides that special meetings of shareholders of the Company may be called only
by the Chairman of the Board of Directors or a majority of the Board of
Directors.

ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS. The Bylaws provide that shareholders seeking to bring business
before an annual meeting of shareholders, or to nominate candidates for election
as directors at an annual meeting of shareholders, must provide timely notice
thereof in writing. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Company, not less
than 120 days nor more than 150 days prior to the first anniversary of the date
of the Company's notice of annual meeting provided with respect to the previous
year's annual meeting; provided, that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed to be more than
30 calendar days earlier than or 60 calendar days after such anniversary, notice
by the stockholder, to be timely, must be so received not more than 90 days nor
later than the later of (i) 60 days prior to the annual meeting or (ii) the
close of business on the 10th day following the date on which notice of the date
of the meeting is given to stockholders or made public, whichever first occurs.
The Bylaws also specify certain requirements for a shareholder's notice to be in
proper written form. These provisions may preclude shareholders from bringing
matters before the shareholders at an annual meeting or from making nominations
for directors at an annual meeting.

AUTHORIZED BUT UNISSUED SHARES. The authorized but unissued shares of
Common Stock and preferred stock are available for future issuance without
shareholder approval. These additional shares may be utilized for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans. The existence of
authorized but unissued and unreserved Common Stock and preferred stock may
enable the Board of Directors to issue shares to persons friendly to current
management which could render more difficult or discourage an attempt to obtain
control of the Company by means of a proxy contest, tender offer, merger or
otherwise, and thereby protect the continuity of the Company's management.

The DGCL provides generally that the affirmative vote of a majority of the
shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or bylaws, unless a corporation's certificate of
incorporation or bylaws, as the case may be, requires a greater percentage

The Certificate requires the affirmative vote of the holders of at least
80% of the combined voting power of the outstanding shares of capital stock of
the Company entitled to vote for the election of directors to amend or repeal
any of the foregoing Certificate provisions. Such 80% shareholder vote is also
required to amend or repeal any of the foregoing Bylaws provisions, although
such Bylaws provisions may also be amended or repealed by a majority vote of the
entire Board of Directors. Such 80% shareholder vote would be in addition to any
separate class vote that might in the future be required pursuant to the terms
of any preferred stock that might be outstanding at the time any such amendments
are submitted to stockholders.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Certificate contains certain provisions permitted under the DGCL
relating to the liability of directors. These provisions eliminate a director's
liability for monetary damages for a breach of fiduciary duty, except in certain
circumstances involving certain wrongful acts, such as the breach of a
director's duty of loyalty or acts or omissions which involve intentional
misconduct or a knowing violation of law. The Certificate also contains
provisions indemnifying the directors and officers of the Company to the fullest
extent permitted by the DGCL. The Company believes that these provisions will
assist the Company in attracting and retaining qualified individuals to serve as
directors.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.

<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 13,632,523 shares
of Common Stock outstanding (assuming no exercise of outstanding options or
warrants). Of these shares, the 3,500,000 shares sold in this offering will be
freely tradable without restriction or further registration under the Securities
Act, except that any shares purchased by an "affiliate" of the Company, as that
term is defined in Rule 144 ("Rule 144") under the Securities Act (an
"Affiliate"), may generally be sold only in compliance with Rule 144 as
described below.

The remaining 10,132,523 shares of Common Stock will be "restricted
securities" as that term is defined under Rule 144 (the "Restricted Shares").
Most of the Restricted Shares will be subject to lock-up agreements as described
below. Upon expiration of these agreements 180 days after the date of this
Prospectus, 9,289,549 of the Restricted Shares will be available for sale in the
public market, subject to the provisions of Rule 144 under the Securities Act.
The balance of the Restricted Shares will become eligible for sale in the public
market, commencing in March 1998. The holders of 5,798,434 of the Restricted
Shares are entitled to registration rights. Sales of Restricted Shares in the
public market, or the availability of such shares for sale, could adversely
affect the market price of the Common Stock. See "Description of Capital
Stock--Registration Rights."

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including an Affiliate, who has beneficially owned
Restricted Shares for at least one year is entitled to sell, within any
three-month period, a number of such shares that does not exceed the greater of
(i) one percent of the then outstanding shares of Common Stock (approximately
136,325 shares immediately after this offering) or (ii) the average weekly
trading volume in the Common Stock in the Nasdaq National Market during the four
calendar weeks preceding the date on which notice of such sale is filed with the
Securities and Exchange Commission. Such sales under Rule 144 are also subject
to certain manner of sale provisions and notice requirements and to the
availability of current public information about the Company. In addition, a
person who is not an Affiliate and has not been an Affiliate for at least three
months prior to the sale and who has beneficially owned Restricted Shares for at
least two years may resell such shares without regard to the requirements
described above. The Company is unable to estimate accurately the number of
Restricted Shares that ultimately will be sold under Rule 144 because the number
of shares will depend in part on the market price for the Common Stock, the
personal circumstances of the sellers and other factors. See "Risk
Factors--Shares Eligible for Future Sale" and "Risk Factors--No Prior Public
Market; Possible Volatility of Stock Price."

Rule 701 permits resales of shares in reliance upon Rule 144 but without
compliance with certain restrictions, including the holding period requirement,
of Rule 144. Any employee, officer or director of or consultant or adviser to
the Company who purchased shares pursuant to a written compensatory plan or
contract may be entitled to rely on the resale provisions of Rule 701. Rule 701
permits affiliates to sell their Rule 701 shares under Rule 144 without
complying with the holding period requirements of Rule 144. Rule 701 further
provides that non-affiliates may sell such shares in reliance on Rule 144
without having to comply with the holding period, public information, volume
limitation or notice provisions of Rule 144. All holders of Rule 701 shares are
required to wait until 90 days after the date of this Prospectus before selling
such shares.

Beginning 90 days after the date of this Prospectus, approximately 622,800
Option Shares and approximately 132,200 Warrant Shares which are not subject to
lock-up agreements will be eligible for sale in reliance on Rule 701. See
"Description of Capital Stock--Options and Warrants."

The Company intends to file a registration statement under the Securities
Act on Form S-8 to register all shares of Common Stock subject to outstanding
stock options and Common Stock issuable pursuant to the Company's stock plans,
promptly upon expiration of the 180-day lock-up period described below.
Following the filing of the Form S-8, shares issued under the Company's stock
plans will be eligible for sale in the public markets upon vesting and exercise
of options or awards, subject to the Rule 144 volume restrictions applicable to
affiliates.

<PAGE>

All executive officers and directors of the Company and certain of the
Company's shareholders, who upon the completion of this offering will hold in
the aggregate 10,041,822 shares of Common Stock, and options and warrants to
purchase 2,204,000 shares of Common Stock, and Intel and Mitsubishi, have agreed
that they will not, without the prior written consent of BancAmerica Robertson
Stephens, directly or indirectly, offer to sell, sell, contract to sell or
otherwise dispose of any shares of Common Stock beneficially owned by them for a
period of 180 days after the date of this Prospectus, subject to certain
exceptions. BancAmerica Robertson Stephens may, in its sole discretion and at
any time, without notice, release all or any portion of the securities subject
to lock-up agreements.

Prior to this offering, there has been no public market for the Common
Stock of the Company, and no prediction can be made as to the effect, if any,
that market sales of shares or the availability of shares for sale will have on
the market price of the Common Stock prevailing from time to time. Nevertheless,
sales of substantial amounts of Common Stock, or the perception that such sales
could occur, could adversely affect prevailing market prices for the Common
Stock and could impair the Company's future ability to obtain capital through an
offering of equity securities.

<PAGE>

UNDERWRITING

The Underwriters named below, acting through their representatives,
BancAmerica Robertson Stephens, Cowen & Company and NationsBanc Montgomery
Securities, Inc. (the "Representatives"), have severally agreed with the
Company, subject to the terms and conditions of the Underwriting Agreement, to
purchase the number of shares of Common Stock set forth opposite their
respective names below. The Underwriters are committed to purchase and pay for
all shares if any are purchased.

NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>

BancAmerica Robertson Stephens ............... 847,421
Cowen & Company .............................. 635,564
NationsBanc Montgomery Securities, Inc. ...... 635,564
CIBC Oppenheimer .............................. 115,000
Goldman, Sachs & Co. ........................ 115,000
Morgan Stanley & Co. Incorporated ............ 115,000
PaineWebber Incorporated ..................... 115,000
Raymond James & Associates, Inc. ............ 115,000
---------
Total .................................... 2,693,549
=========
</TABLE>

The Representatives have advised the Company that the Underwriters propose
to offer the shares of Common Stock to the public at the initial public offering
price set forth on the cover page of this Prospectus and to certain dealers at
such price less a concession of not in excess of $0.32 per share, of which $0.10
may be reallowed to other dealers. After the initial public offering, the public
offering price, concession and reallowance to dealers may be reduced by the
Representatives. No such reduction shall change the amount of proceeds to be
received by the Company as set forth on the cover page of this Prospectus.

The Company has granted to the Underwriters an option, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to 525,000
additional shares of Common Stock at the initial public offering price per share
set forth on the cover page of this Prospectus. To the extent that the
Underwriters exercise such option, each of the Underwriters will have a firm
commitment to purchase approximately the same percentage of such additional
shares that the number of shares of Common Stock to be purchased by it shown in
the above table represents as a percentage of the total number of shares offered
hereby. If purchased, such additional shares will be sold by the Underwriters on
the same terms as those on which the shares offered hereby are being sold (other
than any shares of Common Stock purchased from the Company by Intel and
Mitsubishi).

The Underwriting Agreement contains covenants of indemnity among the
Underwriters and the Company against certain civil liabilities, including
liabilities under the Securities Act and liabilities arising from breaches of
representations and warranties contained in the Underwriting Agreement.

Pursuant to the terms of lock-up agreements, the holders of 10,041,822
shares of the Company's Common Stock (including 5,798,434 shares of preferred
stock that are convertible into shares of Common Stock), and Intel and
Mitsubishi, have agreed, for a period of up to 180 days after the date of this
Prospectus, that, subject to certain exceptions, they will not contract to sell
or otherwise dispose of any shares of Common Stock, any options or warrants to
purchase shares of Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock, owned directly by such holders or with
respect to which they have the power of disposition, without the prior written
consent of BancAmerica Robertson Stephens. BancAmerica Robertson Stephens may,
in its sole discretion, and at any time without notice, release all or any
portion of the securities subject to lock-up agreements. All of the shares of
Common Stock subject to the lock-up agreements will be eligible for sale in the
public market upon the expiration of the lock-up agreements, subject in the case
of the Restricted Shares to Rule 144.

In addition, the Company has agreed that until 180 days after the date of
this Prospectus, the Company will not, without prior written consent of
BancAmerica Robertson Stephens, subject to

<PAGE>

certain exceptions, offer, sell, contract to sell or otherwise dispose of any
shares of Common Stock, any options or warrants to purchase any share of Common
Stock or any securities convertible into, exercisable for or exchangeable for
shares of Common Stock other than the Company's sale of shares in this
offering, the issuance of shares of Common Stock upon the exercise of
outstanding options and warrants and the conversion of shares of preferred
stock and the grant of options to purchase shares of Common Stock under
existing employee stock option or stock purchase plans. See "Shares Eligible
For Future Sale."

The Underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.

Intel and Mitsubishi have agreed to purchase $5 million and $1 million,
respectively, of Common Stock (672,043 shares and 134,408 shares, respectively)
at a price equal to the initial public offering price per share less the
underwriting discounts and commissions. The purchase price for such shares will
be paid directly to the Company at or prior to the closing of the sale of the
other shares offered hereby. In the event and to the extent that Intel and
Mitsubishi do not purchase such shares, the Underwriters will purchase those
shares on the same terms and conditions as the other shares being offered hereby
and those shares will be offered to the public at the initial public offering
price per share. BancAmerica Robertson Stephens, Cowen & Co. and NationsBanc
Montgomery Securities, Inc. are acting as placement agents in connection with
the shares being offered to Intel and Mitsubishi. In connection therewith, they
will receive a fee from the Company of $0.56 per share of Common Stock sold to
such purchasers and will be indemnified by the Company against certain
liabilities, including liabilities under the Securities Act.

Prior to this offering, there has been no public market for the Common
Stock of the Company. Consequently, the initial public offering price for the
Common Stock offered hereby was determined through negotiations among the
Company and the Representatives. Among the factors considered in such
negotiations were prevailing market conditions, certain financial information of
the Company, market valuations of other companies that the Company and the
Representatives believe to be comparable to the Company, estimates of the
business potential of the Company, the present state of the Company's
development and other factors deemed relevant.

The Representatives have advised the Company that, pursuant to Regulation M
under the Securities Act, certain persons participating in the offering may
engage in transactions, including stabilizing bids, syndicate covering
transactions or the imposition of penalty bids which may have the effect of
stabilizing or maintaining the market price of the Common Stock at a level above
that which might otherwise prevail in the open market. A "stabilizing bid" is a
bid for or the purchase of the Common Stock on behalf of the Underwriters for
the purpose of fixing or maintaining the price of the Common Stock. A "syndicate
covering transaction" is the bid for or the purchase of the Common Stock on
behalf of the Underwriters to reduce a short position incurred by the
Underwriters in connection with the offering. A "penalty bid" is an arrangement
permitting the Representatives to reclaim the selling concession otherwise
accruing to an Underwriter or syndicate member in connection with the offering
if the Common Stock originally sold by such Underwriter or syndicate member is
purchased by the Representatives in a syndicate covering transaction and has
therefore not been effectively placed by such Underwriter or syndicate member.
The Representatives have advised the Company that such transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

<PAGE>

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida. Certain legal matters in connection with this offering
will be passed upon for the Underwriters by Brobeck, Phleger & Harrison LLP, New
York, New York.

EXPERTS

The Financial Statements of the Company included in this Prospectus and
Registration Statement to the extent and for the periods indicated in their
report, have been audited by Arthur Andersen LLP, independent certified public
accountants, and are included herein in reliance upon the authority of said firm
as experts in giving said report.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (including all amendments
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended, with respect to the shares of Common Stock offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus omits certain
information contained in the Registration Statement. For further information
with respect to the Company and the Common Stock offered hereby, reference is
hereby made to the Registration Statement and to the exhibits and schedules
filed therewith. Statements contained in this Prospectus regarding the contents
of any agreement or other document filed as an exhibit to the Registration
Statement are not necessarily complete, and in each instance, reference is made
to the copy of such agreement filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. A copy of
the Registration Statement, including the exhibits and schedules thereto, may be
inspected without charge at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and copies of all or any part thereof may be obtained from such office upon
payment of the prescribed fees. The Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants, such as the Company, that file
electronically with the Commission. Information concerning the Company is also
available for inspection at the offices of the Nasdaq National Market, Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006

<PAGE>

SPORTSLINE USA, INC.

INDEX TO FINANCIAL STATEMENTS

PAGE
-----
<S> <C>
Report of Independent Certified Public Accountants ................................. F-2

Balance Sheets as of December 31, 1995 and 1996 and September 30, 1997 (unaudited) F-3

Statements of Operations for the period from Inception (February 23, 1994)
through December 31, 1994, the years ended December 31, 1995 and 1996 and
the nine months ended September 30, 1996 and 1997 (unaudited) ..................... F-4

Statements of Changes in Shareholders' Equity (Deficit) for the period
from Inception (February 23, 1994) to December 31, 1994,
the years ended December 31, 1995 and 1996 and
the nine months ended September 30, 1997 (unaudited) .............................. F-5

Statements of Cash Flows for the period from Inception (February 23, 1994)
to December 31, 1994, the years ended December 31, 1995 and 1996 and
the nine months ended September 30, 1996 and 1997 (unaudited) .................. F-6

Notes to Financial Statements ...................................................... F-8

</TABLE>

F-1

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
SportsLine USA, Inc.:

We have audited the accompanying balance sheets of SportsLine USA, Inc. (a
Delaware corporation) as of December 31, 1995 and 1996, and the related
statements of operations, changes in shareholders' equity (deficit) and cash
flows for the period from inception (February 23, 1994) to December 31, 1994 and
for the years ended December 31, 1995 and 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of SportsLine USA, Inc. as of
December 31, 1995 and 1996, and the results of its operations and its cash flows
for the period from inception (February 23, 1994) to December 31, 1994 and for
the years ended December 31, 1995 and 1996, in conformity with generally
accepted accounting principles.

Fort Lauderdale, Florida,
January 31, 1997 (except with respect to
the matters discussed in Note 9,
as to which the date is November 13, 1997).

F-2

<PAGE>

SPORTSLINE USA, INC.

BALANCE SHEETS

DECEMBER 31,
----------------------------------
SEPTEMBER 30,
1995 1996 1997
--------------- ---------------- ---------------
(UNAUDITED)
<S> <C> <C> <C>

ASSETS
CURRENT ASSETS:
Cash and cash equivalents ................................. $ 183,948 $ 13,993,785 $ 8,114,722
Deferred advertising and content costs (Note 5) ............ -- -- 2,445,433
Accounts receivable ....................................... 3,087 561,390 1,507,907
Prepaid expenses and other current assets ............... 132,639 391,386 2,186,610
------------ ------------- -------------
Total current assets .................................... 319,674 14,946,561 14,254,672
RESTRICTED CERTIFICATES OF DEPOSIT ........................ 578,067 138,601 138,601
PROPERTY AND EQUIPMENT .................................... 1,300,199 2,241,630 3,213,787
OTHER ASSETS ............................................. 298,146 522,950 1,153,570
------------ ------------- -------------
$ 2,496,086 $ 17,849,742 $ 18,760,630
============ ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable .......................................... $ 663,559 $ 631,712 $ 1,024,058
Accrued liabilities ....................................... 289,924 1,332,140 2,103,692
Term loan ................................................ 973,000 -- --
Current portion of long-term borrowings .................. 118,242 224,522 224,522
Current portion of capital lease obligations ............ 172,156 200,945 305,896
Deferred revenue .......................................... 47,050 778,286 1,317,727
------------ ------------- -------------
Total current liabilities .............................. 2,263,931 3,167,605 4,975,895
LONG-TERM BORROWINGS, net of current maturities ............ 354,726 280,652 112,261
CAPITAL LEASE OBLIGATIONS, net of current maturities ...... 329,382 128,080 278,149
------------ ------------- -------------
Total liabilities ....................................... 2,948,039 3,576,337 5,366,305
------------ ------------- -------------
COMMITMENTS AND CONTINGENCIES (Notes 5, 8 and 9)

SHAREHOLDERS' EQUITY (DEFICIT):
Series A convertible preferred stock, $0.01 par value,
3,000,000 shares authorized, issued and outstanding as of
December 31, 1995 and 1996 and September 30, 1997 ...... 30,000 30,000 30,000
Series B convertible preferred stock, $0.01 par value,
6,162,776 shares authorized, issued and outstanding
as of December 31, 1996 and September 30, 1997 ......... -- 61,628 61,628
Series C convertible preferred stock, $0.01 par value,
5,333,333 shares authorized, issued and outstanding
as of December 31, 1996 and September 30, 1997 ......... -- 53,333 53,333
Common stock, $0.01 par value, 50,000,000 shares
authorized, 2,600,000, 2,601,874 and 4,334,089
issued and outstanding as of December 31, 1995
and 1996 and September 30, 1997, respectively ......... 26,000 26,019 43,341
Additional paid-in capital .............................. 5,225,761 32,691,513 50,785,249
Accumulated deficit ....................................... (5,733,714) (18,589,088) (37,579,226)
------------ ------------- -------------
Total shareholders' equity (deficit) ..................... (451,953) 14,273,405 13,394,325
------------ ------------- -------------
$ 2,496,086 $ 17,849,742 $ 18,760,630
============ ============= =============
</TABLE>

The accompanying notes to financial statements are
an integral part of these balance sheets.

F-3

<PAGE>

SPORTSLINE USA, INC.

STATEMENTS OF OPERATIONS

PERIOD FROM
INCEPTION YEAR ENDED NINE MONTHS ENDED
(FEBRUARY 23, DECEMBER 31, SEPTEMBER 30,
1994) TO ---------------------------------- --------------------------------
DECEMBER 31,
1994 1995 1996 1996 1997
-------------- ---------------- ---------------- --------------- ----------------
(UNAUDITED)

<S> <C> <C> <C> <C> <C>
REVENUE ........................... $ -- $ 52,097 $ 2,436,690 $ 1,172,939 $ 5,867,071

COST OF REVENUE .................. -- 756,874 3,395,291 2,164,788 4,858,100
---------- ------------ ------------- ------------ -------------
GROSS MARGIN (DEFICIT) ............ -- (704,777) (958,601) (991,849) 1,008,971

OPERATING EXPENSES:
Product development ............ 57,809 632,659 939,463 728,434 940,538
Sales and marketing ............ 59,306 1,179,106 5,568,550 3,430,792 6,956,053
General and administrative ...... 308,472 2,662,269 4,794,118 3,059,393 5,163,511
Depreciation and amortization . 15,958 192,869 823,653 501,819 7,435,908
---------- ------------ ------------- ------------ -------------
Total operating expenses ...... 441,545 4,666,903 12,125,784 7,720,438 20,496,010
---------- ------------ ------------- ------------ -------------
LOSS FROM OPERATIONS ............ (441,545) (5,371,680) (13,084,385) (8,712,287) (19,487,039)

INTEREST EXPENSE .................. -- (50,074) (136,309) (99,183) (51,206)

INTEREST AND OTHER
INCOME, net ..................... 37,734 91,851 365,320 156,652 548,107
---------- ------------ ------------- ------------ -------------
NET LOSS ........................... $ (403,811) $ (5,329,903) $ (12,855,374) $ (8,654,818) $ (18,990,138)
========== ============ ============= ============ =============
NET LOSS PER SHARE ............... $ (0.19) $ (1.42) $ (1.92) $ (1.44) $ (1.92)
========== ============ ============= ============ =============
WEIGHTED AVERAGE
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING ..................... 2,071,869 3,748,241 6,681,043 6,019,951 9,867,677
========== ============ ============= ============ =============
</TABLE>

The accompanying notes to financial statements are
an integral part of these statements.

F-4

<PAGE>

SPORTSLINE USA, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

SERIES A SERIES B SERIES C
CONVERTIBLE CONVERTIBLE CONVERTIBLE
PREFERRED PREFERRED PREFERRED
STOCK STOCK STOCK
--------------------- --------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from issuance of common
stock, February 23, 1994 ......... -- $ -- -- $ -- -- $ --
Property and equipment contributed
as capital ........................ -- -- -- -- -- --
Net proceeds from issuance of
common stock and common
stock warrants .................. -- -- -- -- -- --
Issuance of common stock pursuant to
consulting agreements and services
(primarily non-cash) ............ -- -- -- -- -- --
Non-cash issuance of common
stock warrants pursuant to
consulting agreements ............ -- -- -- -- -- --
Net loss ........................... -- -- -- -- -- --
---------- -------- ---------- -------- ---------- --------
Balance, December 31, 1994 ......... -- -- -- -- -- --
Net proceeds from issuance of
Series A convertible preferred
stock ........................... 3,000,000 30,000 -- -- -- --
Net proceeds from issuance of
common stock warrants ............ -- -- -- -- -- --
Non-cash issuance of common
stock warrants pursuant to
consulting agreements ............ -- -- -- -- -- --
Net loss ........................... -- -- -- -- -- --
---------- -------- ---------- -------- ---------- --------
Balance, December 31, 1995 ......... 3,000,000 30,000 -- -- -- --
Net proceeds from issuance of
Series B convertible
preferred stock .................. -- -- 6,162,776 61,628 -- --
Net proceeds from issuance of
Series C convertible
preferred stock .................. -- -- -- -- 5,333,333 53,333
Issuance of common stock pursuant
to exercise of options ............ -- -- -- -- -- --
Non-cash issuance of common
stock warrants pursuant to
consulting agreements ............ -- -- -- -- -- --
Net loss ........................... -- -- -- -- -- --
---------- -------- ---------- -------- ---------- --------
Balance, December 31, 1996 ......... 3,000,000 30,000 6,162,776 61,628 5,333,333 53,333
Non-cash issuance of common stock
and common stock warrants
pursuant to CBS agreement
(unaudited) ..................... -- -- -- -- -- --
Non-cash issuance of common
stock warrants pursuant to
consulting agreements
(unaudited) ..................... -- -- -- -- -- --
Proceeds from exercise of common
stock warrants (unaudited) ...... -- -- -- -- -- --
Issuance of common stock
pursuant to exercise of options
(unaudited) ..................... -- -- -- -- -- --
Net loss (unaudited) ............... -- -- -- -- -- --
---------- -------- ---------- -------- ---------- --------
Balance, September 30, 1997
(unaudited) ..................... 3,000,000 $30,000 6,162,776 $61,628 5,333,333 $53,333
========== ======== ========== ======== ========== ========

COMMON STOCK ADDITIONAL
--------------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
----------- --------- ------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Proceeds from issuance of common
stock, February 23, 1994 ......... 1,520,000 $15,200 $ 158,684 $ -- $ 173,884
Property and equipment contributed
as capital ........................ -- -- 26,116 -- 26,116
Net proceeds from issuance of
common stock and common
stock warrants .................. 800,000 8,000 1,905,900 -- 1,913,900
Issuance of common stock pursuant to
consulting agreements and services
(primarily non-cash) ............ 280,000 2,800 142,200 -- 145,000
Non-cash issuance of common
stock warrants pursuant to
consulting agreements ............ -- -- 55,000 -- 55,000
Net loss ........................... -- -- -- (403,811) (403,811)
---------- -------- ------------ ------------- --------------
Balance, December 31, 1994 ......... 2,600,000 26,000 2,287,900 (403,811) 1,910,089
Net proceeds from issuance of
Series A convertible preferred
stock ........................... -- -- 2,883,361 -- 2,913,361
Net proceeds from issuance of
common stock warrants ............ -- -- 37,500 -- 37,500
Non-cash issuance of common
stock warrants pursuant to
consulting agreements ............ -- -- 17,000 -- 17,000
Net loss ........................... -- -- -- (5,329,903) (5,329,903)
---------- -------- ------------ ------------- --------------
Balance, December 31, 1995 ......... 2,600,000 26,000 5,225,761 (5,733,714) (451,953)
Net proceeds from issuance of
Series B convertible
preferred stock .................. -- -- 11,031,369 -- 11,092,997
Net proceeds from issuance of
Series C convertible
preferred stock .................. -- -- 15,873,367 -- 15,926,700
Issuance of common stock pursuant
to exercise of options ............ 1,875 19 1,153 -- 1,172
Non-cash issuance of common
stock warrants pursuant to
consulting agreements ............ -- -- 559,863 -- 559,863
Net loss ........................... -- -- -- (12,855,374) (12,855,374)
---------- -------- ------------ ------------- --------------
Balance, December 31, 1996 ......... 2,601,875 26,019 32,691,513 (18,589,088) 14,273,405
Non-cash issuance of common stock
and common stock warrants
pursuant to CBS agreement
(unaudited) ..................... 752,273 7,523 8,093,038 -- 8,100,561
Non-cash issuance of common
stock warrants pursuant to
consulting agreements
(unaudited) ..................... -- -- 2,078,206 -- 2,078,206
Proceeds from exercise of common
stock warrants (unaudited) ...... 960,000 9,600 7,910,400 -- 7,920,000
Issuance of common stock
pursuant to exercise of options
(unaudited) ..................... 19,941 199 12,092 -- 12,291
Net loss (unaudited) ............... -- -- -- (18,990,138) (18,990,138)
---------- -------- ------------ ------------- --------------
Balance, September 30, 1997
(unaudited) ..................... 4,334,089 $43,341 $50,785,249 $(37,579,226) $ 13,394,325
========== ======== ============ ============= ==============
</TABLE>

The accompanying notes to financial statements are
an integral part of these statements.

F-5

<PAGE>

SPORTSLINE USA, INC.

STATEMENTS OF CASH FLOWS

PERIOD
FROM
INCEPTION
(FEBRUARY 23, YEAR ENDED NINE MONTHS ENDED
1994) TO DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, ---------------------------------- ----------------------------------
1994 1995 1996 1996 1997
-------------- ---------------- ----------------- ---------------- -----------------
(UNAUDITED)

<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss .............................. $ (403,811) $ (5,329,903) $ (12,855,374) $ (8,654,818) $ (18,990,138)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization ......... 15,598 192,869 823,653 501,819 7,435,908
Provision for doubtful accounts ...... -- -- 22,045 12,545 37,200
Changes in operating assets
and liabilities:
Accounts receivable .................. -- (3,087) (580,348) (489,076) (983,706)
Prepaid expenses and other
current assets .................. (52,850) (197,888) (66,404) (72,527) (1,088,958)
Accounts payable ..................... 43,189 620,370 (31,847) 3,394 685,064
Accrued liabilities .................. 8,862 281,062 1,042,216 519,984 720,672
Deferred revenue ..................... -- 47,050 731,236 575,951 539,441
---------- ------------ ------------- ------------ -------------
Net cash used in operating
activities ........................ (389,012) (4,389,527) (10,914,823) (7,602,728) (11,644,517)
---------- ------------ ------------- ------------ -------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and equipment ... (42,302) (868,150) (1,622,368) (1,031,432) (1,807,916)
Net redemption (purchase) of restricted
certificates of deposit ............... -- (578,067) 439,466 439,466 --
---------- ------------ ------------- ------------ -------------
Net cash provided by (used in)
investing activities ............ (42,302) (1,446,217) (1,182,902) (591,966) (1,807,916)
---------- ------------ ------------- ------------ -------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds (repayment) of term loan ...... -- 973,000 (973,000) (973,000) --
Proceeds from long-term borrowings ...... -- 472,968 144,468 144,468 --
Repayment of long-term borrowings ...... -- -- (112,262) (56,131) (168,391)
Repayment of capital lease obligations -- (43,607) (172,513) (128,356) (190,530)
Proceeds from issuance of common
stock and common stock warrants ...... 2,097,784 37,500 1,172 -- 7,932,291
Proceeds from issuance of convertible
preferred stock ..................... -- 2,913,361 27,019,697 25,696,744 --
---------- ------------ ------------- ------------ -------------
Net cash provided by financing
activities ........................ 2,097,784 4,353,222 25,907,562 24,683,725 7,573,370
---------- ------------ ------------- ------------ -------------
Net increase (decrease) in cash
and cash equivalents ............ 1,666,470 (1,482,522) 13,809,837 16,489,031 (5,879,063)
CASH AND CASH EQUIVALENTS,
beginning of period ..................... -- 1,666,470 183,948 183,948 13,993,785
---------- ------------ ------------- ------------ -------------
CASH AND CASH EQUIVALENTS,
end of period ........................... $1,666,470 $ 183,948 $ 13,993,785 $ 16,672,979 $ 8,114,722
========== ============ ============= ============ =============
</TABLE>

(CONTINUED)

F-6

<PAGE>

SPORTSLINE USA, INC.

STATEMENTS OF CASH FLOWS--(CONTINUED)

PERIOD
FROM
INCEPTION
(FEBRUARY 23, YEAR ENDED NINE MONTHS ENDED
1994) TO DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, --------------------- ---------------------
1994 1995 1996 1996 1997
-------------- ---------- ---------- --------- -----------
(UNAUDITED)

<S> <C> <C> <C> <C> <C>
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:

Issuance of common stock for services rendered ... $135,000 $ -- $ -- $ -- $7,471,852
========= ========= ========= ======== ===========
Issuance of common stock warrants pursuant
to services rendered and consulting agreements . $ 55,000 $ 17,000 $559,863 $ 5,000 $2,706,915
========= ========= ========= ======== ===========
Equipment acquired under capital leases ......... $ -- $545,145 $ -- $ -- $ 445,550
========= ========= ========= ======== ===========
Property and equipment contributed as capital ... $ 26,116 $ -- $ -- $ -- $ --
========= ========= ========= ======== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:

Cash paid for interest ........................... $ -- $ 50,074 $121,027 $99,183 $ 51,206
========= ========= ========= ======== ===========
</TABLE>

The accompanying notes to financial statements are
an integral part of these statements.

F-7

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS

(ALL AMOUNTS AND RELATED DISCLOSURES APPLICABLE TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1997 AND EVENTS OCCURRING AFTER JANUARY 31, 1997 ARE
UNAUDITED, EXCEPT WITH RESPECT TO THE MATTERS DISCUSSED IN NOTE 9)

(1) NATURE OF OPERATIONS:

SportsLine USA, Inc. (the "Company") was incorporated on February 23, 1994
("Inception") and was a development stage company until the Company began
recognizing revenue from its operations in September 1995. The Company is an
Internet-based sports media company that provides branded, interactive
information and programming as well as merchandise to sports enthusiasts
worldwide. cbs.sportsline.com, the Company's flagship site on the World Wide Web
(the "Web") delivers real-time, in-depth and compelling sports content and
programming that capitalizes on the Web's unique graphical and interactive
capabilities.

The Company distributes a broad range of up-to-date news, scores, player
and team statistics and standings, photos and audio and video clips obtained
from leading sports news organizations and the Company's superstar athletes;
offers instant odds and picks; produces and distributes entertaining,
interactive and original programming such as editorials and analyses from its
in-house staff and freelance journalists; produces and offers contests, games,
and fantasy league products and fan clubs; and sells sports-related merchandise
and memorabilia. The Company also owns and operates a state-of-the-art radio
studio from which it produces the only all-sports radio programming broadcast
exclusively over the Internet.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid temporary cash investments with an
original maturity of three months or less to be cash equivalents.

LICENSE AND CONSULTING AGREEMENTS

The cost of license and consulting agreements, which is primarily a result
of issuances of warrants to purchase common stock (see Note 6), is being
amortized using the straight-line method over the term of the related agreements
(from one to ten years) beginning in August 1995, when cbs.sportsline.com (known
at that time as sportsline.com) first became commercially available. Such costs
totaled approximately $222,000, $782,000 and $3,153,000 as of December 31, 1995
and 1996 and September 30, 1997, respectively. Accumulated amortization on such
amounts was approximately $40,000, $200,000 and $1,148,000 at December 31, 1995
and 1996 and September 30, 1997, respectively. The current portion of such
amounts is reflected in prepaid expenses and other current assets and the
long-term portion in other assets in the accompanying balance sheets.
Amortization expense under these agreements amounted to approximately $40,000,
$160,000, $111,000 and $948,000 for the years ended December 31, 1995 and 1996
and for the nine months ended September 30, 1996 and 1997, respectively, and is
included in depreciation and amortization expense in the accompanying statements
of operations.

PROPERTY AND EQUIPMENT

Property and equipment is carried at historical cost and is being
depreciated and amortized using the straight-line method over the shorter of the
estimated useful lives of the assets or the lease period.

F-8

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:--(CONTINUED)

Maintenance and repairs are charged to expense when incurred; betterments are
capitalized. Upon the sale or retirement of assets, the cost and accumulated
depreciation are removed from the account and any gain or loss is recognized.

ACCRUED LIABILITIES

Accrued liabilities include accrued advertising costs of $59,000, $297,000
and $546,000 as of December 31, 1995 and 1996 and September 30, 1997,
respectively.

REVENUE RECOGNITION

Through December 31, 1995, the Company's revenue was derived solely from
membership revenue. The Company began recognizing advertising revenue in March
1996. Revenue recognition policies for advertising, membership and content
licensing are set forth below.

ADVERTISING REVENUE

Advertising revenue is derived from the sale of advertising on the
Company's Web sites. Advertising revenue is recognized in the period the
advertisement is displayed, provided that no significant Company obligations
remain and collection of the resulting receivable is probable. Company
obligations typically include guarantees of a minimum number of "impressions,"
or times that any advertisement is viewed by users of the Company's Web sites.

MEMBERSHIP REVENUE

The Company offers monthly and yearly memberships to its Web sites.
Potential members are offered a 30-day free trial membership. If such trial
membership is not cancelled within the first 30 days, the member is charged and
revenue is recognized. For additional fees, members are also eligible to
participate in sports contests to win cash prizes and merchandise and join
celebrity fan clubs.

Revenue relating to monthly memberships is recognized in the month the
service is provided, except for trial memberships as noted above. Revenue
relating to yearly memberships and sports contests is recognized ratably over
the life of the membership agreement or contest period. Accordingly, amounts
received for which services have not yet been provided are reflected as deferred
revenue in the accompanying balance sheets.

CONTENT LICENSING REVENUE

Content licensing revenue is derived from the licensing of certain of the
Company's content to third parties. Content licensing revenue is recognized over
the period of the license agreement as the Company delivers its content.

F-9

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:--(CONTINUED)

BARTER TRANSACTIONS

The Company recognizes advertising and content licensing revenue as a
result of barter transactions primarily with certain other Internet-related
companies. Such revenue is recognized based on the fair value of the
consideration received, which generally consists of advertising displayed on the
other companies' Web sites. Barter revenue and the corresponding expense is
recognized in the period the advertising is displayed.

REVENUE BY TYPE

Revenue by type for the years ended December 31, 1995 and 1996 and the nine
months ended September 30, 1996 and 1997 are as follows:

YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
------------------------ --------------------------
1995 1996 1996 1997
--------- ------------ ------------ -----------
(UNAUDITED)

<S> <C> <C> <C> <C>
Advertising - cash ............... $ -- $1,048,118 $ 412,743 $2,975,742
Advertising - barter ............... -- 502,473 354,858 88,833
Membership - basic .................. 28,720 526,026 292,807 1,089,599
Membership - premium services ...... 23,377 356,724 110,973 639,875
Content licensing - cash ............ -- -- -- 50,001
Content licensing - barter ......... -- -- -- 919,998
Other .............................. -- 3,349 1,558 103,023
-------- ----------- ----------- -----------
$52,097 $2,436,690 $1,172,939 $5,867,071
======== =========== =========== ===========
</TABLE>

COST OF REVENUE

Cost of revenue consists primarily of content and royalty fees, payroll and
related expenses for the editorial and operations staff, telecommunications and
computer related expenses for the support and delivery of the Company's
services. Royalty payments are paid to certain content providers and technology
and marketing partners based on membership levels subject, in certain instances,
to specified minimum amounts.

PRODUCT DEVELOPMENT COSTS

Statement of Financial Accounting Standards ("SFAS") No. 86, ACCOUNTING FOR
THE COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED OR OTHERWISE MARKETED,
requires capitalization of certain software development costs subsequent to the
establishment of technological feasibility. Based on the Company's product
development process, technological feasibility is established upon completion of
a working model. Costs incurred by the Company between completion of a working
model and the point at which the product is ready for general release have not
been significant.

F-10

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:--(CONTINUED)

SALES AND MARKETING

Sales and marketing expense includes member acquisition costs relating to
the direct costs of member solicitation, including advertising on Web sites,
printing, production and shipping of member kits and the costs of obtaining
qualified prospects by various targeted direct marketing programs (i.e., direct
marketing response cards and mailing lists) and from third parties. No indirect
costs are included in member acquisition costs. In accordance with Statement of
Position 93-7, REPORTING ON ADVERTISING COSTS, the Company may in the future
capitalize such direct-response advertising costs if historical evidence is
available to indicate that the advertising results in a future benefit. The
Company will determine an appropriate amortization period for such costs if
capitalization begins. Until that time, all such costs are expensed as incurred.
All other advertising and marketing costs are charged to expense at the time the
advertising takes place.

PER SHARE AMOUNTS

Net loss per share is computed using the weighted average number of common
and dilutive common equivalent shares outstanding during the period. Pursuant to
the requirements of the Securities and Exchange Commission, such computations
shall include all common and common equivalent shares issued within 12 months
immediately preceding April 16, 1997, the date of the initial filing of the
Company's registration statement relating to its initial public offering ("IPO")
if priced below $8.00, the mid-point of the range of the estimated public
offering price per share, as if they were outstanding for all periods presented
using the treasury stock method, even if antidilutive. Common equivalent shares
issued prior to this twelve month period which are antidilutive are not included
in the computation of net loss per share. Common equivalent shares consist of
the incremental common shares issuable upon conversion of all convertible
preferred stock (using the if-converted method) and shares issuable upon
exercise of stock options and warrants (using the treasury stock method).

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments, primarily consisting of cash and cash
equivalents, accounts receivable, restricted certificates of deposit, accounts
payable and borrowings, approximate fair value due to their short-term nature
and/or market rates of interest.

F-11

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:--(CONTINUED)

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash and cash equivalents,
and accounts receivable. The Company's cash management and investment policies
restrict investments to low risk, highly-liquid securities and the Company
performs periodic evaluations of the credit standing of the financial
institutions with which it deals. Accounts receivable from customers outside the
United States were not material to the Company's financial position or results
of operations. The Company performs ongoing credit evaluations and generally
requires no collateral. The Company maintains reserves for potential credit
losses and such losses have not been significant and have been within
management's expectations. The allowance for doubtful accounts amounted to $0,
$22,000 and $59,000 at December 31, 1995 and 1996 and September 30, 1997,
respectively. As of December 31, 1995 and 1996 and September 30, 1997,
management believes that the Company had no significant concentrations of credit
risk.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In March 1995, SFAS No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED
ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, was issued. SFAS No. 121
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the carrying
amount of the assets. SFAS No. 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company adopted SFAS No. 121 in
1996. The effect of adoption was not material.

In October 1995, SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, was
issued. SFAS No. 123 allows either adoption of a fair value based method of
accounting for employee stock options and similar equity instruments or
continuation of the measurement of compensation cost relating to such plans
using the intrinsic value based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. The
Company has elected to continue to use the intrinsic value based method.
Accordingly, pro forma disclosures required to be presented by SFAS No. 123 for
companies continuing to utilize the intrinsic value based method are presented
in Note 6.

In February 1997, SFAS No. 128, EARNINGS PER SHARE, was issued. SFAS No.
128 simplifies the methodology of computing earnings per share and requires the
presentation of basic and diluted earnings per share. The Company's basic and
diluted earnings per share are the same, as the Company's common stock
equivalents are antidilutive. In addition, the Company's basic and diluted
earnings per share are the same as that computed under APB No. 15, EARNINGS PER
SHARE, as presented in the accompanying Statements of Operations. SFAS No. 128
must be adopted for periods ending after December 15, 1997 and be retroactively
reflected in the financial statements.

UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

In the opinion of management, the unaudited condensed interim financial
statements contain all adjustments, consisting of only normal recurring
adjustments, necessary to present fairly the financial

F-12

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:--(CONTINUED)

position of the Company as of September 30, 1997, and the results of its
operations and cash flows for the nine months ended September 30, 1996 and 1997.

(3) PROPERTY AND EQUIPMENT, NET:

PROPERTY AND EQUIPMENT, NET CONSISTS OF THE FOLLOWING:

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------------- SEPTEMBER 30,
(YEARS) 1995 1996 1997
-------------- ------------ ------------ --------------
(UNAUDITED)

<S> <C> <C> <C> <C>
Computer equipment ............ 2-3 $1,294,417 $2,561,692 $ 4,532,755
Furniture, fixtures and leasehold
improvements .................. 3-7 186,572 538,717 515,085
---------- ---------- ------------
1,480,989 3,100,409 5,047,840
Less--accumulated depreciation
and amortization ............ (180,790) (858,779) (1,834,053)
---------- ---------- ------------
$1,300,199 $2,241,630 $ 3,213,787
========== ========== ============
</TABLE>

Included in property and equipment is equipment acquired under capital
leases amounting to approximately $545,000 as of December 31, 1995 and 1996,
less accumulated amortization amounting to $75,000 and $261,000, respectively.
Depreciation and amortization expense on property and equipment amounted to
approximately $6,000, $174,000 and $680,000 for the period from inception
(February 23, 1994) to December 31, 1994, and for the years ended December 31,
1995 and 1996, respectively.

(4) BORROWINGS:

IN OCTOBER 1995, THE COMPANY ENTERED INTO A $1,500,000 EQUIPMENT LINE OF
CREDIT WITH A BANK (THE "Equipment Line"). The Equipment Line carries interest
at the prime rate plus 1.5% (10% at December 31, 1996) and is payable monthly,
interest only through June 1996, and thereafter in 33 equal monthly principal
plus interest payments. In addition, the Company is required to comply with
certain restrictive covenants which include, among other things, maintenance of
certain financial ratios and a cash balance equal to the amount of the
outstanding balance of the line of credit. The Company is in compliance with
such requirements. The Equipment Line is collateralized by substantially all of
the Company's assets. Amounts outstanding under this loan mature as follows at
December 31, 1996:

MATURITY AMOUNT
- -------- -------
<S> <C>
1997 ............... $ 224,522
1998 ............... 224,522
1999 ............... 56,130
---------
$ 505,174
=========
</TABLE>

In December 1995, the Company entered into a $1,500,000 Term Loan with a
bank, bearing interest payable monthly at the prime rate plus 1% (9.5% as of
December 31, 1995). As of December 31,

F-13

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(4) BORROWINGS:--(CONTINUED)

1995, $973,000 was outstanding under the Term Loan, which was repaid in March
1996. The Term Loan required the Company to hold a restricted certificate of
deposit in the amount of $472,968 at December 31, 1995.

In July 1997, the Company entered into a $2,500,000 equipment line of
credit with a leasing company. The equipment line carries interest at the prime
rate plus one quarter percent. Borrowings will be payable over a maximum of 36
months. As of September 30, 1997, $415,000 was outstanding.

(5) SHAREHOLDERS' EQUITY (DEFICIT):

THE COMPANY WAS ORIGINALLY CAPITALIZED WITH CASH OF $173,884 AND PROPERTY
AND EQUIPMENT VALUED at $26,116 from its founding shareholder. In August 1994,
the Company's certificate of incorporation was amended to authorize the issuance
of up to 25,000,000 shares of common stock $0.01 par value per share and
1,000,000 shares of preferred stock $0.01 par value per share. In May 1995, the
Company's certificate of incorporation was amended and restated to increase the
authorized preferred stock to 3,000,000 shares and designate such authorized
stock as Series A convertible preferred stock. In March 1996, the Company's
certificate of incorporation was amended to increase the authorized preferred
stock to 9,162,776 shares, and to designate 6,162,776 shares as Series B
convertible preferred stock. In September 1996, the Company's certificate of
incorporation was amended to increase the authorized common stock to 50,000,000
shares and to increase the authorized preferred stock to 14,496,109 shares and
to designate 5,333,333 shares as Series C convertible preferred stock.

In 1994, the Company issued 280,000 shares of common stock pursuant to
consulting agreements and raised net proceeds of $1,913,900 from the issuance of
800,000 shares of common stock and warrants to purchase 200,000 shares of common
stock at $5.00 to an individual investor. Such warrants were immediately
exercisable and expire in August 1999.

In May 1995, the Company entered into a stock subscription agreement with a
venture capital firm that raised net proceeds of $2,950,861 and resulted in the
issuance of 3,000,000 shares of Series A convertible preferred stock and
warrants to purchase 300,000 shares of common stock with an exercise price of
$5.00 per share. Such warrants were immediately exercisable and expire in May
2000.

In March 1996, the Company entered into a stock subscription agreement with
two venture capital firms and other investors that raised net proceeds of
$11,092,997 and resulted in the issuance of 6,162,776 shares of Series B
convertible preferred stock. In connection with this offering, an investor was
issued warrants to acquire 1,011,277 common shares at an exercise price of $5.00
per share, which expired unexercised in September 1996.

In October 1996, the Company entered into a stock subscription agreement
with two venture capital firms and other investors that raised net proceeds of
$15,926,700 and resulted in the issuance of 5,333,333 shares of Series C
convertible preferred stock.

The convertible preferred stock carries liquidation rights equal to the
original issue price plus any declared but unpaid dividends. In the event of any
liquidation of the Company, the priority of

F-14

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) SHAREHOLDERS' EQUITY (DEFICIT):--(CONTINUED)

distribution of available funds to shareholders is as follows: Series C
convertible preferred to the indicated preference; then Series B convertible
preferred to the indicated preference; then Series A convertible preferred to
the indicated preference, with the remainder to the common shareholders. The
convertible preferred stock bears noncumulative dividends at the rate of $0.08
per annum for Series A, $0.18 per annum for Series B and $0.30 per annum for
Series C. No preferred dividends have been declared or paid.

All convertible preferred stock carries the same voting rights as common
stock and is convertible at any time at the request of the holder into common
stock, subject to certain antidilution provisions. Also, upon the closing of a
firm commitment of an underwritten public offering pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended, with
an aggregate public offering price equal to or exceeding $10,000,000 and a
public offering price per share equal to or exceeding $12.50 per share, as
adjusted, both before underwriters' discounts and commissions, or upon the
Company's receipt of the written consent of the holders of not less than
two-thirds of the outstanding shares of each series of convertible preferred
stock, the convertible preferred stock will convert into common stock at the
ratio of 0.4 shares of common stock for each share of convertible preferred
stock.

In December 1995, an investor guaranteed the $1,500,000 Term Loan (see Note
4) to the Company by a bank. In return for the guarantee, the Company issued
warrants to the investor to purchase 30,000 shares of common stock at a price of
$2.50 per share, which were immediately exercisable and expire in December 2000.

In September 1996, the Company entered into an agreement with an investor
to issue warrants to acquire up to 960,000 shares of common stock at an exercise
price of $8.25 per share, contingent upon the investor meeting certain
conditions. These conditions included providing assistance with new technologies
and business expansion opportunities. The Company did not value such warrants at
December 31, 1996 as it was unable to estimate if and when the contingencies
would be met. On January 30, 1997, the Company's Board of Directors concluded
that the warrants were exercisable and placed a value on them of $227,000 using
the Black-Scholes option pricing model with a volatility of 40%, risk-free
interest rate of 5.1% and an estimated life of two months. The Company expects
to benefit from the new technologies relating to the warrant issuance over a
two-year period and, accordingly, is charging the cost to expense over a
two-year period. In March 1997, the investor exercised the warrants resulting in
net proceeds to the Company of $7,920,000 and the issuance of 960,000 shares of
common stock.

In March 1997, the Company entered into a five-year agreement with CBS Inc.
("CBS"). In consideration of the advertising and promotional efforts of CBS and
its license to the Company of the right to use certain CBS logos and
television-related sports content, CBS will receive 3,100,000 shares of common
stock over the term of the agreement (752,273, 735,802, 558,988, 567,579 and
485,358 shares in 1997, 1998, 1999, 2000 and 2001, respectively). CBS will also
have the right to receive 60% of the Company's advertising revenue on
cbs.sportsline.com pages related to certain "signature events" (such as the NCAA
Men's Basketball Tournament, the 1998 Winter Olympics, U.S. Open tennis, PGA
Tour

F-15

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) SHAREHOLDERS' EQUITY (DEFICIT):--(CONTINUED)

events and the Daytona 500) and 50% of the Company's advertising revenue on
other cbs.sportsline.com pages containing CBS television-related sports content.
The CBS agreement also provides that the Company shall issue to CBS on the first
business day of each contract year warrants to purchase 380,000 shares of common
stock at per share exercise prices ranging from $10.00 in 1997 to $30.00 in
2001. Such warrants are exercisable at any time during the contract year in
which they are granted. The value of the advertising and content will be
recorded annually in the balance sheet as deferred advertising and content costs
and amortized to depreciation and amortization expense over each related
contract year. Amounts amortized to expense in the nine months ended September
30, 1997 totaled $5,484,000, consisting of amortization relating to advertising
of $4,900,000, content of $302,000 and expense related to warrants of $282,000,
and are included in depreciation and amortization in the accompanying statement
of operations for the nine months ended September 30, 1997. Total annual amounts
to be amortized to expense in accordance with the CBS agreement are as follows:

The Company has reserved sufficient shares of its common stock to cover
conversion of the convertible preferred stock, issuance of common stock under
the CBS agreement, exercise of common stock warrants and the stock option,
incentive compensation and employee stock purchase plans discussed in Notes 6
and 9.

The Equipment Line discussed in Note 4 contains covenants that restrict the
Company from paying dividends in excess of $750,000 without the lender's prior
written consent.

(6) WARRANTS, STOCK OPTIONS AND BENEFIT PLAN:

COMMON STOCK WARRANTS ISSUED IN 1995 AND 1996 TO NON-EMPLOYEES FOR SERVICES
RENDERED PRIMARILY under consulting agreements were valued on the date of grant
using the Black-Scholes option pricing model. The following is a summary of
warrants granted, canceled and outstanding and the assumptions utilized
involving the grants in 1995 and 1996:

1995 1996
---------------------------- ------------------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE
--------- ---------------- ------------ ---------------
<S> <C> <C> <C> <C>
Warrants outstanding, beginning of year ...... 430,000 $5.00 810,000 $5.13
Granted ....................................... 380,000 5.30 250,000 5.45
Canceled .................................... -- -- (13,000) 5.00
-------- ---------
Warrants outstanding, end of year ............ 810,000 5.13 1,047,000 5.23
======== =========
</TABLE>

F-16

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(6) WARRANTS, STOCK OPTIONS AND BENEFIT PLAN:--(CONTINUED)

The range of exercise prices of warrants outstanding at December 31,1996
was $2.50 - $12.50. The weighted average fair value of warrants granted during
1995 and 1996 was $0.23 and $2.25, respectively. There were 967,000 warrants
exercisable at December 31, 1996. Warrants to acquire 960,000 common shares
subject to certain contingencies referred to in Note 5 have not been included in
the above information.

During the nine months ended September 30, 1997, an additional 820,188
warrants were granted, including 380,000 warrants granted under the CBS
agreement and excluding the 960,000 warrants issued to the investor discussed in
Note 5. Such warrants have exercise prices ranging from $5.00 to $10.00.
Warrants outstanding at September 30, 1997 totaled 1,862,188, of which
approximately 1,432,200 were exercisable.

Assumptions utilized to value warrants are as follows:

RISK-FREE
VOLATILITY DIVIDEND YIELD INTEREST RATES ESTIMATED LIVES
------------ ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
1995 grants ...... 40% 0% 5.6% - 7.0% 4-6 years
1996 grants ...... 40% 0% 5.3% - 6.6% 4-7 years
1997 grants ...... 40% 0% 5.5% - 6.5% 1-9 years
</TABLE>

Common stock warrants issued for services rendered under consulting
agreements prior to January 1, 1995 were valued by management based on their
evaluation of the services rendered and management's estimated fair value of the
securities issued, which would not be materially different than results obtained
by applying the methodology utilized in valuing the warrants in 1995 and 1996.

In 1995, the Company adopted the SportsLine USA, Inc. 1995 Stock Option
Plan (the "1995 Plan") under which the Company is authorized to issue a total of
1,200,000 incentive stock options and nonqualified stock options to purchase
common stock to be granted to employees, nonemployee members of the Board of
Directors and certain consultants or independent advisors who provide services
to the Company. Under the 1995 Plan, options to purchase common stock may be
granted at prices less than, equal to or in excess of the market value of the
Company's common stock, as determined by the Board of Directors. Options become
exercisable for 25% of the option shares upon the optionee's completion of one
year of service, as defined, with the balance vesting in successive equal
monthly installments upon the optionee's completion of each of the next 36
months of service. The maximum term of the options is 10 years.

F-17

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(6) WARRANTS, STOCK OPTIONS AND BENEFIT PLAN:--(CONTINUED)

A summary of the Company's stock option plan as of December 31, 1995 and
1996, and changes during the years then ended is presented below:

1995 1996
------------------------------ --------------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE
--------- ------------------ ------------ -----------------
<S> <C> <C> <C> <C>
Outstanding at beginning of year ...... -- $ -- 339,200 $0.63
Granted .............................. 339,200 0.63 348,300 2.08
Exercised ........................... -- -- (1,875) 0.63
Forfeited ........................... -- -- (25,325) 0.63
-------- --------
Outstanding at end of year ............ 339,200 0.63 660,300 1.38
======== ========
Options exercisable at end of year . 33,200 0.63 115,179 0.63
======== ========
</TABLE>

The weighted average fair value of options granted during 1995 and 1996 was
$0.25 and $1.10 respectively.

During the nine months ended September 30, 1997, an additional 503,609
options were granted with an exercise price ranging from $5.00 to $10.00. As of
September 30, 1997, options to purchase a total of 1,096,800 shares of common
stock were outstanding, of which approximately 280,300 were then exercisable.

The following table summarizes information about stock options outstanding
at December 31, 1996:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------------------------- ----------------------------------
WEIGHTED
NUMBER AVERAGE NUMBER
OUTSTANDING AT REMAINING WEIGHTED EXERCISABLE AT WEIGHTED
RANGE OF DECEMBER 31, CONTRACTUAL AVERAGE DECEMBER 31, AVERAGE
EXERCISE PRICES 1996 LIFE EXERCISE PRICE 1996 EXERCISE PRICE
- ------------------ ---------------- ------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
$0.63 546,800 8.74 $0.63 115,179 $0.63
5.00 113,500 9.70 5.00 -- --
------- --------
0.63 to 5.00 660,300 8.90 1.38 115,179 0.63
======= ========
</TABLE>

F-18

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(6) WARRANTS, STOCK OPTIONS AND BENEFIT PLAN:--(CONTINUED)

Pro forma information is required by SFAS No. 123 and has been determined
as if the Company had accounted for its stock-based compensation plans under the
fair value method. The fair value of each option grant was estimated at the date
of grant using the Black-Scholes option pricing model with the following
weighted average assumptions used for grants in 1995 and 1996, respectively:
risk-free interest rates of 5.4% to 6.5% and 6.0% to 6.6%, dividend yield of 0%
for both years, expected volatility of 40% for both years and expected life of
4.39 years for both years. The Company's pro forma information follows for the
years ended December 31:

1995 1996
---------------- -----------------
<S> <C> <C>
Net loss - As reported ............... $ (5,329,903) $ (12,855,374)
Pro forma ........................ (5,340,470) (13,017,564)
Net loss per share - As reported ...... $ (1.42) $ (1.92)
Pro forma ........................ $ (1.43) $ (1.97)
</TABLE>

In January 1996, the Company adopted the SportsLine USA, Inc. Retirement
Plan that qualifies under Section 401(k) of the Internal Revenue Code. Under
this plan, participating employees, as defined, may defer a portion of their
pretax earnings, up to the Internal Revenue Service annual contribution limits.
There is currently no matching of employee contributions by the Company.

(7) INCOME TAXES:

NO PROVISION FOR FEDERAL AND STATE INCOME TAXES HAS BEEN RECORDED AS THE
COMPANY HAS INCURRED net operating losses through December 31, 1996. At December
31, 1996, the Company had approximately $18,000,000 of net operating loss
carryforwards for Federal income tax reporting purposes available to offset
future taxable income; such carryforwards expire from 2009 to 2011. Under the
Tax Reform Act of 1986, the amounts of and benefits from net operating losses
carried forward may be impaired or limited in certain circumstances. Events
which may cause limitations in the amount of net operating losses that the
Company may utilize in any one year include, but are not limited to, a
cumulative ownership change of more than 50% over a three year period. At
December 31, 1996, the effect of such limitation, if imposed, is not expected to
be significant.

Deferred tax assets at December 31, 1995 and 1996 consist primarily of the
tax effect of net operating loss carryforwards which amounted to approximately
$1,925,000 and $6,335,000, respectively. Other deferred tax assets and
liabilities are not significant. The Company has provided a full 100% valuation
allowance on the deferred tax assets at December 31, 1995 and 1996 to reduce
such deferred income tax assets to zero as it is management's belief that
realization of such amounts do not meet the criteria required by generally
accepted accounting principles. Management will review the valuation allowance
requirement periodically and make adjustments as warranted.

(8) COMMITMENTS AND CONTINGENCIES:

THE COMPANY LEASES ITS OFFICE FACILITY AND COMPUTER AND COMMUNICATIONS
EQUIPMENT UNDER noncancellable leases that expire on various dates through 2001.
The office leases require the Company to pay operating costs, including property
taxes and maintenance and include rent adjustment clauses.

F-19

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(8) COMMITMENTS AND CONTINGENCIES:--(CONTINUED)

Under the terms of one office lease, the Company has provided a letter of
credit to the landlord. The letter of credit is secured by a restricted
certificate of deposit of approximately $139,000 as of December 31, 1996.

Rent expense amounted to approximately $81,000, $97,000, $55,000 and
$248,000 for the years ended December 31, 1995 and 1996, and for the nine months
ended September 30, 1996 and 1997, respectively.

Future minimum lease payments for all leases are as follows as of December
31, 1996:

CAPITAL OPERATING
----------- -----------
<S> <C> <C>
1997 .................................... $232,516 $ 250,000
1998 .................................... 132,142 252,000
1999 .................................... -- 241,000
2000 .................................... -- 182,000
2001 .................................... -- 97,000
--------- -----------
Total minimum lease payments ............... 364,658 $1,022,000
===========
Less: amount representing interest ......... (35,633)
---------
Lease obligations reflected as current
($200,945) and noncurrent ($128,080) ...... $329,025
=========
</TABLE>

In January 1997, the Company paid the balance of its telecommunication
capital lease; this payment is reflected in the 1997 payments above.

The Company has entered into various licensing, royalty and consulting
agreements with various content providers, vendors and sports celebrities. The
remaining terms of these agreements range from one to ten years. These
agreements provide for the payment of royalties, bounties and certain guaranteed
amounts on a per member and/or a minimum dollar amount basis. Additionally, some
agreements provide for a specified percentage of advertising and merchandising
revenue to be paid to the celebrity athlete from whose Web site the revenue is
derived. Minimum guaranteed payments required under such agreements are as
follows:

DECEMBER 31, SEPTEMBER 30,
1996 1997
-------------- --------------
(UNAUDITED)

<S> <C> <C>
1997 ............ $537,000 $ 954,000
1998 ............ 341,000 3,575,000
1999 ............ 20,000 2,041,000
2000 ............ 11,000 1,385,000
2001 ............ -- 720,000
Thereafter ...... -- 2,620,000
--------- ------------
$909,000 $11,295,000
========= ============
</TABLE>

Certain of the above commitments may be reduced based upon the appreciation
of equity instruments issued and the amount of profit sharing earned under the
related agreements.

F-20

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(8) COMMITMENTS AND CONTINGENCIES:--(CONTINUED)

Effective July 1, 1997, the Company entered into an agreement with America
Online Inc. ("AOL") that requires the Company to provide cash consideration and
certain content and promotion during the one-year term of the agreement. AOL
will provide prominent placement of cbs.sportsline.com on its online service as
well as other promotion and advertising. The agreement also provides for a
sharing of advertising, merchandise and premium product revenue. Cash
commitments related to this agreement are included in the preceding table.

On March 25, 1997, Weatherline, Inc. ("Weatherline"), a company that
provides pre-recorded weather and sports information by telephone, filed a
complaint against the Company in the United States District Court for the
Eastern District of Missouri. Weatherline owns a United States trademark
registration for the mark "Sportsline" for use in promoting the goods and
services of others by making sports information available to customers of
participating businesses through the telephone; and claims to have used the mark
for this purpose since 1968. The complaint alleges that the Company's use of the
mark "SportsLine USA" and other marks utilizing the term "SportsLine" infringes
upon and otherwise violates Weatherline's rights under its registered trademark
and damages Weatherline's reputation. The complaint seeks a preliminary and
permanent injunction against the Company from using marks containing the term
"Sportsline" or any other similar name or mark which would be likely to cause
confusion with Weatherline's mark. The complaint also seeks actual and punitive
damages and attorneys' fees. The Company believes that its use of the
"SportsLine" mark and "SportsLine" derivative marks does not infringe upon or
otherwise violate Weatherline's trademark rights. The Company has filed an
answer in which it denied all material allegations of the complaint and asserted
several affirmative defenses. The action is still in the discovery stage, and
both parties have agreed to attempt to settle the action through court-ordered
mediation. In the event the Company is unable to obtain a favorable settlement,
the Company intends to vigorously defend itself against the action. The legal
costs that may be incurred by the Company in defending itself against this
action could be substantial, and the litigation could be protracted and result
in diversion of management and other resources of the Company. In a separate
matter, a request for an extension of time to oppose the Company's application
to register the current version of the SportsLine USA logo has been filed by
Weatherline with the United States Patent and Trademark Office.

(9) SUBSEQUENT EVENTS:

REVERSE STOCK SPLIT

On April 14, 1997, the Company's Board of Directors authorized the Company
to file a registration statement with the Securities Exchange Commission for the
purpose of the IPO of the Company's common stock. On October 10, 1997, the Board
of Directors authorized a 1-for-2.5 reverse stock split of the Company's common
stock to become effective upon completion of the IPO. Such reverse stock split

F-21

<PAGE>

SPORTSLINE USA, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(9) SUBSEQUENT EVENTS:--(CONTINUED)

has been retroactively reflected in all share and per share disclosures in the
accompanying financial statements and notes. Additionally, the Company has
obtained approval from the holders of at least two-thirds of each series of
convertible preferred stockholders to convert each share of convertible
preferred stock into 0.4 shares of common stock upon the completion of the IPO.

AMENDMENT TO CERTIFICATE OF INCORPORATION

On April 14, 1997, the Board of Directors authorized the filing of an
Amended and Restated Certificate of Incorporation upon the completion of the
IPO. Pursuant to the terms of the Amended and Restated Certificate of
Incorporation, the Board of Directors will be authorized to issue up to an
aggregate of 1,000,000 shares of preferred stock in one or more series and to
fix or alter the designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each such series thereof, including
the dividend rates, conversion rights, voting rights, terms of redemption
(including sinking fund provisions), redemption price or prices, liquidation
preferences and the number of shares constituting any series or designations of
such series. The Company has no present plans to issue any shares of preferred
stock.

1997 INCENTIVE COMPENSATION PLAN

On April 14, 1997, the Company adopted the 1997 Incentive Compensation Plan
(the "Incentive Plan"). Pursuant to the Incentive Plan, the total number of
shares of common stock that may be subject to the granting of awards shall be
equal to: (i) 2,000,000 shares, plus (ii) the number of shares with respect to
awards previously granted under the Incentive Plan that terminate without being
exercised, expire, are forfeited or canceled, and the number of shares of common
stock that are surrendered in payment of any awards or any tax withholding
requirements. The Incentive Plan will become effective upon completion of the
IPO. The Incentive Plan provides for grants of stock options, stock appreciation
rights, restricted stock, deferred stock, other stock-related awards and
performance or annual incentive awards at not less than the fair market value of
the underlying common stock that may be settled in cash, stock or other
property.

EMPLOYEE STOCK PURCHASE PLAN

On April 14, 1997, the Company adopted the Employee Stock Purchase Plan
(the "Purchase Plan") under which 500,000 shares of common stock are reserved.
The Purchase Plan will become effective upon completion of the IPO. The Purchase
Plan provides eligible employees, as defined therein, the right to purchase
shares of common stock. The purchase price per share will be equal to 85% of the
fair market value as of certain measurement dates. Such purchases are limited in
any calendar year to the lower of 25% of the employee's total annual
compensation or $25,000.

REPRICING OF OPTIONS

Upon commencement of this offering, the Company intends to amend
approximately 341,000 of the stock options outstanding under the 1995 Plan to
lower the exercise prices thereof to $8.00 per share.

F-22

<PAGE>

Global Distribution Opportunities

[SportsLine intends to syndicate its programming and distribute its proprietary
content through a variety of media.]

[circular representation]

Radio
Internet
Wireless
Publishing*
Fax/E-Mail*
Television*

[* tageted or under development]

Strategic Relationships

A SAMPLE OF THE NAMES AND LOGOS OF THE COMPANY'S STRATEGIC RELATIONSHIPS

San Francisco 49ers [Logo]
Netscape [Logo]
@Home [Logo]
C Net [Logo]
Bell South dot net [Logo]
TalkCity [Logo]
AirMedia Live [Logo]
MCI Internet [Logo}
US Ski Team [Logo]
Microsoft Internet Explorer [Logo]
International Management Group [Logo]
Excite [Logo]
National Football League Players Association [Logo]
FedEx Orange Bowl [Logo]
Real Audio [Logo]
PointCast [Logo]
National Hockey League Interactive Cyber Enterprises [Logo]
CBS, Inc. [Logo]
America Online [Logo]

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