If you’re looking to buy a couple of less-than-serious newspapers, a series of mobile adult sites and a DVD distribution business, then you’re in luck: Sport Media Group is up for sale. The Daily Sport publisher announced today it was “exploring all opportunities to sell the business, in part of in whole” following a number of “unsolicited approaches”.
It’s been a troubled time for the company since it was re-born as Sport Media Group following a merger with Interactive World in 2007 as part of a management buy-out (Interactive World’s mobile assets lives on as SMG-owned Netcollex). Last month the company breached one of its banking covenants, forcing a two-month extension of its debt facility. The company says it is confident of securing a further extension before its next deadline of March 6
As with most publishers, the obvious divestment targets would be the newspapers: the Daily Sport and Sunday Sport have struggled through costly redesigns, editor changes and a changing demographic and have both seen their readership fall. The Daily Sport sold 72,592 copies in January according to ABC, down 28.59 percent year on year, which is worrying because SMG estimates a 10,000-copy fluctuation is the equivalent to £2 million a year in lost revenue.
So what chance of the board getting the £50 million it paid for the titles in 2007 back now? Slim to none: SMG took an £18.4 million impairment charge on the acquisition in its year-end results in January, making the papers worth £31.6 million on paper and no doubt far less to the average investor.