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Sport Media Group files for bankruptcy

By This Is Money
Updated: 04:32 EDT, 2 April 2011

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Sport Media Group (SMG), publisher of the Sunday Sport and The Daily Sport, has filed for bankruptcy after failing to meet its debts.

Both red-top newspapers, famed for their colourful content and spoof headlines including 'World War II bomber found on Moon', halted production.

In a statement to the City, SMG said it had ceased trading with 'immediate effect' due to an 'inability to meet certain creditors as they fall due'.

It blamed some of its problems on 'adverse weather in December', which had put pressure on cashflow.

The Sunday Sport was preparing to turn 25 this year, with its sibling marking its 20th anniversary.

Last September RBS agreed to defer a monthly loan repayment of £25,000, to help SMG shore up capital and return to profit.

But that agreement expired and SMG failed to meet its debts despite receiving a loan of £1.68m two years ago from founder David Sullivan, who still owns 9.9% of the company.

Bankruptcy may not be the end of the story. The Daily Sport boasts around 100,000 daily readers.

Panmure Gordon media analyst Alex DeGroote reckons the assets being of interest to other publishers, notably the Daily Mirror owner Trinity Mirror.

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