Perform Group To Combine U.S. Sports Assets With Sporting News Brand
INSIDE THE DEAL: Slipper said no money changed hands in the creation of the new company, but Perform will supply $1.4M in loans and cash to the venture for working capital, and ACBJ will contribute $4.2M. Perform and ACBJ hold options over the next four years to purchase the other side's equity. Perform has a pre-set price of $65M to buy out ACBJ's stake if it exercises the option, ultimately rising over time to $85M. As a result, the new venture carries a value of about $200M. With the deal, both groups hope to achieve greater scale and compete more vigorously against outlets such as Yahoo and ESPN for a greater share of the growing digital advertising market. For ACBJ, the deal represents another significant step in the ongoing transformation of Sporting News, which it purchased in '06. Since that deal, the 127-year-old brand has brought in veteran media exec Jeff Price to serve as president and publisher, released several new digital products, took control of the AOL Fanhouse brand name, and last December ceased publishing the print magazine. Perform Americas Managing Dir Juan Delgado will become Sporting News Media Managing Dir, with Price reporting to him as President. The new company's corporate, sales, marketing and business operations will be based in N.Y., with editorial operations continuing to be headquartered in Charlotte. "The critical thing in a joint venture like this is the relationships and people you're working with," said ACBJ CEO Whitney Shaw. "We've identified a set of common goals in a very logical way, and this is a very comfortable and exciting step in the future of Sporting News. These are the right guys with which to take the next step."
SN YEARBOOKS/NASCAR ILLUSTRATED NOT PART OF DEAL: Shaw and Slipper did not disclose specifics around projected staff headcounts. However, sources said close to a dozen employees were informed that there would not be a role for them in the new set up. Staff of the various assets included in the deal will now become employees of the new Perform Sporting News Limited joint venture. Sporting News staffing had already been in a state of change amid its transition to a digitally focused outfit. The change to the new brand will begin immediately. Sporting News Media will represent the name taken to the business and ad market, while Sporting News will be the consumer-facing brand. The deal also marks an outgrowth of a prior relationship in which Perform was providing video content for Sporting News over the past two years, in part through its Total College Sports venture with Silver Chalice New Media. Intensive negotiations toward the joint venture began late last fall. Remaining print assets under the Sporting News umbrella, including its annual sports yearbooks and NASCAR Illustrated, are not part of the deal with Perform.
COMPANY TIES: ACBJ is the parent company of THE DAILY and SportsBusiness Journal. Perform is a publicly listed company on the London Stock Exchange with a market capitalization of nearly £1.2B, and is the fastest growing listed media business in Europe.