The online sports media company suffered a loss in the latest fiscal year, despite nearly doubling its revenue.
THE SCORE INC. (symbol SCR on the TSX Venture Exchange; www.thescore.com) delivers customizable sports news to fans through their mobile phones and computer desktops. It generates revenue through advertising on its apps and website.
The Score’s digital products were part of the larger Score Media group until 2012. That’s when Rogers Communications (symbol RCI.B on Toronto) acquired that business’s sports broadcasting assets—the Score Television Network—for $167 million. As part of the transaction, the digital assets were transferred to a newly formed company, The Score. Since that time, it has focused on growing its mobile apps and website.
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In February 2015, The Score introduced a mobile app for eSports (video game competitions). That app aims to deliver breaking news from the world of eSports along with highlights and live streaming of video gaming competitions around the world.
In December 2015, the company entered the business of daily fantasy sports with the launch of QuickDraft; it’s a free-to-play app that allows sports fans to win prizes of up to $1,000 daily. In 2015, an estimated 57 million people played daily fantasy sports in Canada and the U.S. However, there continues to be legal issues surrounding gambling and this area of the fantasy sports market.
Sales in the quarter ended August 31, 2017, slipped to 4.8 million from $5.0 million a year earlier. The decline was mostly due to the absence of major sporting events compared to the year-ago period when the Rio Olympics and the 2016 UEFA EURO were running.
The lack of major sporting events during this quarter also contributed to a drop in app volumes. The Score recorded 3.7 million average monthly users for fiscal 2017, down from 4 millions for 2016. While the company continues to lose money, the loss of $5.2 million for 2017 was less than half the $15.4 million for fiscal 2016.
The company’s balance sheet is a plus: it has no long-term debt and holds cash of $10.1 million. Still, that’s down 33% from a year ago.
The Score’s shares have declined steadily from a high of $0.90 a share in early 2016 to today’s price, although the company continues to successfully cut its costs.
Online businesses, such as The Score, are typically part of a bigger company (like its former parent, Score Television Network). That model spreads staffing, development and marketing costs across several businesses.
We don’t have a lot of confidence in The Score’s prospects for profit anytime soon.
TSI Network recommendation: We don’t recommend The Score.
We have followed this stock in the past based on questions from our Inner Circle members. Please look out for our updated analysis on the company. Thank you.
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I see that you are not written about The Score (SCR) since 2017. I would like to know your opinion at the present time. Thank you very much.
We have followed this stock in the past based on questions from our Inner Circle members. Please look out for our updated analysis on the company. Thank you.