LONDON British digital rights company Perform joined forces on Thursday with the owner of historic U.S. media brand Sporting News to accelerate its expansion in the North American market.
Perform, floated in London two years ago, has built its business on buying up online rights to major sports events and supplying video clips or live content to groups like newspaper websites and bookmakers.
A few hours after the announcement of the formation of the U.S. venture, Perform joint chief executives Oliver Slipper and Simon Denyer announced that they had each sold 9.3 million pounds ($14.1 million) worth of shares in the British company.
Perform is setting up the new venture, to be based in New York, with American City Business Journals Inc (ACBJ), whose assets include the SportingNews.com website. Perform will provide an initial $1.4 million for the venture, with ACBJ contributing $4.2 million of funding.
Sporting News was founded in 1886 as a print magazine and was known as 'The Bible of Baseball' until branching out into other sports in the 1960s. It switched to a digital only format at the end of last year.
The British company will own 65 percent of the venture and has the right to buy out ACBJ's 35 percent share for $65 million until 2017, rising to a cost of $85 million from 2019.
"Perform Sporting News Limited is a fantastic opportunity to significantly scale and transform our business in the U.S. and Canada," Slipper said in a statement.
Slipper, who signed the deal with ACBJ in North Carolina in the early hours of Thursday, and Denyer said in a regulatory filing that they had each sold two million Perform shares at a price of 465p. The two men founded the company in 2007.
Denyer and related parties still hold more than 24 million Perform shares - more than 10 percent of the company. Slipper has more than four million shares.
Perform shares had closed down 3 percent at 467p on Thursday. They have risen from a 260p flotation price in April 2011, helped by a series of acquisitions, and the company has a market capitalization of 1.15 billion pounds.
(Reporting by Keith Weir, Editing by Elaine Hardcastle)