Sports Resource Group, which brought together eight companies from disparate sports business disciplines, is being broken up in a process due to be completed in the next few days.
On July 7, the group — whose board includes Olympic track star Sebastian Coe — was delisted from the AIM stock market in London. The component subsidiaries are being sold back to their original owners.
Those companies include British sponsorship agency Fast Track, whose clients include track-and-field governing body UK Athletics; Italian sponsorship agency Wind Group (Ferrari, AC Milan); and Swedish television distributor IEC in Sports (25 ATP and 18 WTA events); plus International Sports Management, which represents about 30 top golfers and an equal number of soccer clients.
The companies were acquired in 2001 and early 2002 for a total of more than $80 million, 90 percent of it paid in stock. Previous owners usually became SRG board members.
SRG never really operated as a new company pooling all the assets of the companies that it acquired. Those companies retained their separate identities and management.
The first and only time the synergy came into operation was last December in Doha, Qatar, when SRG organized the entertainment sidebars of the QSi Expo trade show.
Fast Track brought in Paula Radcliffe and Haile Gebrselassie to compete for a $1 million prize in a road race, Wind Group brought in Italian soccer club AC Milan to play a local all-star team, and IEC in Sports sold the rights to the television coverage.
But without strong central control, the centrifugal force of the various SRG components — against a backdrop of poor market conditions — pulled the thing apart.
SRG revenue actually increased by 33 percent to $20.4 million for the year ended Dec. 31, but that growth reflected the acquisitions made in 2001. The company showed a loss before taxation, goodwill amortization and exceptional items of $479,000 vs. a 2001 profit of $4.15 million, excluding non-cash finance charges.
A shell company called Hegira, owned 50-50 by SRG founders Chris Akers and Nigel Robertson, is selling the parts. Hegira is paying a bit over $10 million for SRG.
There is still not much cash trading hands, except in the case of IEC in Sports, the last major SRG acquisition. Its management is paying about $1.8 million in cash to get the company back.
Hegira will retain one SRG company, Power Marketing.
Jay Stuart is editorial director of SporTVision magazine and Sports TV Report newsletter.
