Deal joins Perform assets, Sporting News brand
Perform Group and American City Business Journals have struck a major joint venture to combine Perform’s U.S. sports assets, including its popular ePlayer sports video service, with ACBJ’s Sporting News brand.
The new company, Perform Sporting News Limited, will operate under the brand name Sporting News Media. It is expected to become one of the top five digital sports media properties in the United States by traffic, blending the ePlayer video syndication that provides highlights to more than 250 news outlets and soccer portal Goal.com with Sporting News’ portfolio of assets, which include SportingNews.com.
U.K.-based Perform will own 65 percent of the new entity and serve as majority owner. ACBJ will hold a 35 percent share.
The addition of Sporting News provides a large array of news and sports data as well as a mainstream consumer brand.
“We’ve basically gone from nowhere in 2009 with our U.S. business to now the No. 1 digital video provider in the country, but we still had a missing piece in a standout brand since the ePlayer is a white-label product,” said Oliver Slipper, Perform joint CEO. “We were on the lookout for the right destination, and Sporting News represents that standout brand. We see a big opportunity to put together what we see as a lot of very complementary assets and push that North American business forward. This combination we believe was the step we needed to get to the next level.”
Slipper said no money changed hands in the creation of the new company, but Perform will supply $1.4 million in loans and cash to the venture for working capital, and ACBJ will contribute $4.2 million. Perform and ACBJ hold options over the next four years to purchase the other side’s equity. Perform has a pre-set price of $65 million to buy out ACBJ’s stake within the next four years if it exercises the option, ultimately rising over time to $85 million. As a result, the new venture carries a value of about $200 million.
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 2006. Since that deal, the 127-year-old brand has brought in veteran media executive 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.
Juan Delgado, Perform Americas managing director, will become managing director of Sporting News Media, with Price reporting to him as president. The new company’s corporate, sales, marketing and business operations will be based in New York, 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 Whitney Shaw, ACBJ chief executive officer. “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.”
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 setup. 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 within the Sporting News umbrella, including its annual sport yearbooks and NASCAR Illustrated, are not part of the deal with Perform.
ACBJ is the parent company of SportsBusiness Journal, SportsBusiness Daily and SportsBusiness Daily Global.
Perform is a publicly listed company on the London Stock Exchange with a market capitalization of nearly 1.2 billion pounds.