6 Mar 2017 07:00
6 March 2017
TLA Worldwide plc
("TLA" or the "Group")
TLA Baseball Offseason and Earn-out Update
TLA Worldwide plc (AIM: TLA), a leading athlete representation and sports marketing business, is pleased to report that its Baseball division has negotiated a total of $237m in offseason contracts, on behalf of its clients, (2016 offseason: $174m) to date which the Group expects to increase further as the offseason contract period comes to an end. This is a record performance for the Baseball division and highlights its strong position following the investment made in 2016. Offseason contracts are calculated before any performance based incentives which may be earned by TLA's Baseball clients in 2017 and beyond.
TLA has also agreed to amend the earn-outs and extend the employment agreements (the "Agreements") for the principals of LS Legacy Sports LLC ("Legacy") and Peter E. Greenberg and Associates Ltd ("PEG") as described below. The Agreements were entered into on 4 March 2017.
TLA acquired the leading baseball representation businesses, Legacy and PEG, in December 2011 and November 2012, respectively, forming the Group's Baseball division. Both entities are wholly owned subsidiaries of the Group and for the year ended 31 December 2015 the Baseball division generated operating income of $13.8m and headline EBITDA of $6.8m.
The original earn-outs with the principals of Legacy and PEG covered the five-year period following their acquisitions. These have been replaced with amended and extended earn-out arrangements covering additional five-year periods. The payments to Legacy and PEG under these arrangements are payable in cash and conditional on the combined Baseball division achieving certain EBIT targets over the period up until 2021 for Legacy and 2022 for PEG. Upon achievement of the escalating Baseball EBIT hurdles, the total consideration for the principals of Legacy and PEG under the earn-outs is capped at $7.2m.
As a result of the amendment and extension to the Legacy and PEG earn-outs, the total deferred consideration on the Group's balance sheet, which as at 30 June 2016 was $9.8m, is expected to increase by approximately $0.7m.
In addition, the Legacy and PEG employment extensions bring them in-line with the employment extensions agreed with the key principals of The Agency Sports Management which was acquired by the Group in 2011. TLA has now extended its employment agreements with the principals of these three businesses who will remain at TLA for at least another five years.
Given the investment made to date and the resultant offseason activities, the Board believes that the Agreements are a positive development for the Group and will ensure that the Baseball principals remain incentivised and committed to deliver on the Baseball growth plans over the coming years.
Mike Principe, CEO of TLA, said: "The future success of our Baseball division is based on our investment in high quality people and we are excited about the prospects of this division having secured key personnel over the long term. The negotiation of at least $237m in offseason contracts is a record performance for TLA Baseball and this, combined with the right people in place for years to come, gives the Board confidence that the Baseball division is in a strong position to deliver on its growth plans."
Related party transaction
The Legacy principals, being Greg Genske, Brian Peters and Scott Parker, are deemed to be related parties under the AIM Rules and therefore their participation in the arrangements described above represent a related party transaction.
In accordance with AIM Rule 13, the Board of Directors (excluding Greg Genske who is a related party) consider, having consulted Numis (the Group's nominated adviser) that the terms of the transaction are fair and reasonable insofar as TLA's shareholders are concerned.
Enquiries:
TLA Worldwide | |
Bart Campbell, Executive Chairman Michael Principe, Chief Executive Officer | +1 212 645 2141 |
Numis Securities | |
Nick Westlake and Oliver Hardy (Nomad) | +44 20 7260 1000 |
Christopher Wilkinson (Broker) | |
Luther Pendragon | |
Harry Chathli, Alexis Gore | +44 20 7618 9100 |
About TLA Worldwide
TLA Worldwide is a leading athlete representation, event management and sports marketing group quoted on AIM-LSE in London. The Group derives revenues from long-term agency relationships with many prominent U.S. and international sports stars, broadcasters and media personalities associated with major sports including the MLB, NFL, NBA, PGA tour, AFL and Olympians and Cricketers. In addition, it also provides a range of services in respect of media consultancy, sports sponsorship and event creation and ownership, including the International Champions Cup tournament in Australia. TLA Worldwide serves its clients from 10 locations worldwide including its offices in London, UK; New York, Newport Beach and California, USA; Melbourne, Perth, Adelaide and Sydney, Australia. For more information, please visit www.tlaworldwide.com.