Sullivan returns to save Daily Sport

THE founder of the Daily Sport and Sunday Sport newspapers, David Sullivan, is returning to help revive their flagging fortunes.

Manchester-based Sport Media Group, which bought the business from Mr Sullivan for £50m in 2007, also said it has reached an agreement over its banking facilities, and as a result, was no longer in talk to sell the company.

Mr Sullivan will take on the role of honorary publisher to “increase circulation and profitability” in a move that sees the tycoon stump up a £1.68m loan in return for shares in the company. The loan will enable Sport Media to restructure its newspaper business.

The news comes as the group revealed a 19% fall in turnover in the six months to January 31 from £11.7m to £14.4m. Pre-tax loss was £1.89m compared to a profit of £2.32m last time. Underlying pre-tax profit for the period fell from £3.2m to £200,000.

Andrew Fickling, chief executive officer, said:  “We are pleased that we have been able to secure the financial position of the group and attract support and investment for our restructuring plans which we believe will allow us to take the group forward successfully in what are challenging economic circumstances.

“We are grateful for the assistance that has been provided by all parties in delivering a refinancing structure that incorporates the interests of all stakeholders, and look forward to the future with renewed confidence.”

Chairman David Bailey said the newspaper business was profitable, and circulation reasonably steady, until November 2008.

However following a price war in the red top tabloids and the economic slowdown, circulation and advertising revenues fell substantially, resulting in trading losses for the newspaper since November.

He added: “Although circulation has stabilised in recent months, advertising remains sluggish, and while management has been working on cost savings, losses have continued, albeit at reduced levels.

“The re-organisation of the business, reflecting a re-negotiated print contract and a further reduction in staffing levels, is expected to restore the business to consistent profitability at current circulation and advertising levels.”