Princeton Video Image, Inc. (Nasdaq: PVII), the Emmy award-winning worldwide leader in virtual advertising and imaging solutions for television, today announced it has reached an agreement in principle to acquire Mexico City-based Publicidad Virtual SA de CV from Presencia en Medios, S.A. in a stock transaction. Publicidad Virtual, PVI’s most successful licensee and the revenue leader in the virtual advertising business, has been the exclusive licensee of Princeton Video Image technology in Latin America since 1994.

The acquisition is expected to increase Princeton Video Image’s annual operating revenue by approximately $10 million and significantly improve cash flow. For the twelve months ended June 30, 2000, Publicidad Virtual had $7.6 million in revenue, up from $2.4 million in the prior year. Publicidad Virtual and Princeton Video Image had combined pro-forma revenues in excess of $9 million for the year ended June 30, 2000 and are on track to exceed $15 million for the twelve months ended June 30, 2001.

According to the terms of the acquisition, Princeton Video Image will issue stock, options and warrants to Presencia en Medios, equal to 21% ownership of Princeton Video Image on a fully diluted basis, increasing Presencia en Medios’s current 5.8% ownership to approximately 25.6% of total shares outstanding. Presencia en Medios will also receive additional compensation for consulting services and incentives based on Publicidad Virtual’s future performance, and the right to designate a total of three directors on the Princeton Video board, increasing the number of board seats from 8 to 10. In turn, Princeton Video Image will own 100% of Publicidad Virtual. The Board of Directors of each company has approved the acquisition, which is subject to approval by each company’s shareholders. The transaction is expected to close by March 31, 2001.

Dennis Wilkinson, President and Chief Executive Officer of Princeton Video Image, stated, ‘The Latin American television advertising market is worth approximately $10 billion annually and growing. In Publicidad Virtual, we acquire the leader in Latin American virtual technology, and the number one company in the world in virtual advertising revenue. The acquisition allows Princeton Video Image and its shareholders to benefit directly from Publicidad’s success. Once the transaction is closed, Princeton Video Image will receive an immediate gain from the significant incremental revenue, profit and cash flow that Publicidad generates. We look to capitalize on the immediate financial impact this deal will have on Princeton Video Image and are confident that we will able to take full advantage of this acquisition, as we continue on our path-to-profitability. This acquisition is a very significant step in our growth plan, which will firmly establish Princeton Video Image’s presence in Latin America while complementing our strong position in the U.S. and Canada.’

Brown Williams, chairman of Princeton Video Image, commented, ‘This acquisition fits extremely well with our goal of increasing Princeton Video Image’s international presence following our establishment of PVI Europe earlier this year. Mexico has embraced our technology quite rapidly and has become our fastest growing market. The timing of this acquisition could not be better, as Princeton Video Image will be able to leverage the combined resources of both companies to help leading advertisers in this region continue to take full advantage of virtual advertising opportunities in Mexico and throughout Latin America.’

Eduardo Sitt, Director of Presencia en Medios and member of Princeton Video Image’s Board of Directors, said, ‘Publicidad Virtual has demonstrated to Latin America that Princeton Video Image’s technology is a viable means to generate revenue and gross profit dollars through virtual advertising, and we have just scratched the surface. We are taking our successful experience in Mexico and expanding into Latin America’s other key markets. To help us in these efforts, we have retained the services of Kissinger McLarty Associates, whose strategic expertise will help us in our expansion. With all these strategic initiatives in place, we look forward to working even more closely as a team with Princeton Video Image as we expand upon our successful business model.’

Upon completion of this acquisition, Publicidad Virtual will operate as a separate, wholly-owned subsidiary of Princeton Video Image, under its current management team headed by David Sitt, and Roberto Sonabend, currently Executive Vice Presidents of Publicidad. Publicidad Virtual currently provides virtual advertising services in Latin America for clients such as Visa, Volkswagen and Nokia.

Conference Call
Princeton Video Image will host a conference call today at 10:00 a.m. eastern standard time. To access the conference call over the Internet, please log on to It is advised that you log on at least ten minutes prior to the call to download the streaming media software required to listen to the Internet broadcast. The online archive of the broadcast will be available within one hour after the live call for a period of one week.

About Princeton Video Image, Inc., (
The global leader in virtual advertising solutions for television, Princeton Video Image has developed and marketed a real-time video insertion system. This system, through patented computer vision technology, places computer-generated electronic images into television broadcasts of sporting events as well as other programming. These electronic images range from simple corporate names and logos to sophisticated 3-D images and animated effects. Princeton Video Image has provided video insertion services for thousands of live telecasts worldwide, including broadcasts of Major League Baseball, National League Football, Indy Racing League, professional soccer, and other live events. Princeton Video Image is the exclusive virtual advertising provider for NFL International broadcasts. Beyond sports venues, Princeton Video Image’s virtual imaging technology provides branding-oriented program enhancements for The Early Show on CBS. The Company is headquartered in Lawrenceville, New Jersey, with offices in New York City, Brussels and Johannesburg, as well as licensees’ offices in Madrid and Mexico City.

About Publicidad Virtual SA de CV
Publicidad Virtual SA de CV has been an active Princeton Video Image Inc. affiliate since 1994. The Company provides advertising services to Televisa and TV Azteca in Mexico and is deploying Princeton Video Image’s patented virtual technologies to other key markets throughout Latin America.

For further information, please contact:
Dawn Rogers-Murphy
Manager, Communications
Princeton Video Image, Inc (PVI)
Tel: +1 609 912 9400