Daily Sport ceases publication and calls in administrators

The Daily Sport and Sunday Sport have today ceased publication, after parent company Sport Media Group announced it was set to go into administration.

In a statement to the City this afternoon, Sport Media Group said it had ceased trading with immediate effect because of its "inability to meet certain creditors as they fall due".

The company, which had been attempting to reach an agreement with its lending banks, is in the process of appointing administrators.

The Sunday Sport would have marked its 25th anniversary this year and the Daily Sport its 20th.

The National Union of Journalists has called for a full investigation into the collapse of the company, which it said had been performing well in recent months.

The union's assistant organiser for the North of England, Lawrence Shaw, said the company had called an all-staff meeting with the administrators for Monday lunchtime.

Sport Media Group suspended trading in its shares this morning "pending clarification of its financial position".

The group said it had experienced an "insufficient recovery in trading since the adverse weather in December 2010" which had put pressure on its cashflow.

In September last year, the company said the Royal Bank of Scotland had agreed to defer its monthly loan repayment of £50,000 for a period of six months to provide its necessary working capital. That agreement is now due to end.

The deferment allowed the company to return to profit as it made an underlying pre-tax profit of £330,000 in the previous six months. However, the firm has been continually constrained by debt repayments incurred from the 2007 reverse takeover by Interactive World.

Sport Media Group was bailed out in April 2009 by former owner David Sullivan and Gold Group International who agreed to a loan of £1.68m to help restructure the business. Sullivan also took a 9.9 per cent stake.

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