Vulcan Ventures Sees Interest in Title's Multimedia Assets

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NEW YORK (AdAge.com) -- The Sporting News, the weekly publication and media company acquired in 2000 by former Microsoft executive Paul Allen for more than $100 million, is exploring strategic alternatives that will likely result in sale of the company.
Publication owner Vulcan Ventures cited 'unsolicited interest' in the company as its reason for seeking a buyer.

The company, owned by Mr. Allen’s Vulcan Ventures, explained that the search for a buyer is a response to continued “unsolicited interest” in Sporting News’ multimedia properties. Sporting News publishes specialty sports books and a weekly magazine, as well as operating a radio network (Sporting News Radio) and AM radio stations in New York, Boston and Los Angeles. Its Web site, SportingNews.com, has over 1.6 million unique visitors per month.

Category's giants
But the weekly publication has struggled in a category ruled by giants. The Sporting News has consistently lagged behind its well-heeled competitors Sports Illustrated, published by Time Warner, and ESPN the Magazine, published by the magazine division of the Walt Disney Co. According to the Audit Bureau of Circulations, The Sporting News had an average paid circulation of 713,158 during the six months that ended June 30, 2005, significantly less than Sports Illustrated’s circulation of 3.3 million and ESPN the Magazine’s circulation of 1.9 million. The Sporting News -- with its focus on sports statistics and news -- has carved out a niche that differentiates it from its more feature-driven competitors, but it is a niche that the Internet has come to dominate.

Yet, C. Richard Allen, president-CEO of The Sporting News, insists the company has adjusted to the changing media landscape. “We’ve been out of the kind of pure statistics business for a really long time.” Mr. Allen said. “When it became a commodity business, we no longer focused on that. What we’re in is the analysis and entertainment business.”

Reed Phillips, an investment banker at DeSilva & Phillips, was hesitant to predict the market value of Sporting News. Mr. Phillips said that without knowing the impact of recent changes to diversify revenue beyond just the print component, it is impossible to predict a price. But he thinks it likely that Vulcan will recoup at least what they paid for the company and maybe more.

Value of diverse offerings
Mr. Phillips thinks it’s unlikely that a direct competitor such as ESPN would be interested in Sporting News because they have similar properties, but that equity firms will find the company attractive because of the diversity of its offerings.

Mr. Allen was also loath to name a dollar figure, saying he expects the company to fetch a “substantial and fair price.” He explained that the value of the company is more than the value of the individual media platforms. Rather, the value is in the brand itself -- its content creation capability and its relationship to its audience and advertisers.

“Everything that we know, sitting here today, suggests the whole is more valuable than the sum of its parts,” Mr. Allen said.

The Sporting News was dealt a blow last month when it was fined millions of dollars for promoting Internet gambling by accepting advertisements from overseas online casinos.

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