Acquisitions/Issue of Equity

Sports Resource Group PLC 7 December 2000 SPORTS RESOURCE GROUP PLC 7 DECEMBER 2000 ACQUISITIONS OF FAST TRACK, ISM AND THE BUSINESS OF WIND GROUP RIGHTS ISSUE TO RAISE £11.25 MILLION GROSS - Proposed acquisitions of Fast Track, ISM and the business of Wind Group for an initial aggregate consideration of £37.5 million at the Rights Issue Price. - Proposed 3 for 5 Rights Issue of 8,999,916 Rights Issue Shares at 125p per share, raising approximately £10.25 million net of expenses. - The acquisitions deliver on Sports Resource's stated strategy of acquiring companies active within sports representation and sports consultancy. - Fast Track is a specialist sports marketing consultancy and event management agency created by Alan Pascoe and Edward Leask in April 1998. Clients include UK Athletics and FISU. - ISM, which was established in 1989 by Andrew 'Chubby' Chandler, is a sports representation, events management and sports consultancy business. Clients include Lee Westwood and Darren Clarke. - Wind Group, established in October 1997 by Luciano Secchi, is a consultancy specialising in sports sponsorship strategy and advice. Clients include the Ferrari Formula 1 team and Michael Schumacher. - Following completion of the acquisitions, Alan Pascoe, Andrew Chandler, Edward Leask, Luciano Secchi and Lord Coe OBE (Sebastian Coe) will join the board of Sports Resource. - Pro forma operating profit of £2.0 million for year ended 30 September 2000. Sports Resource Group plc ('Sports Resource' or the 'Company'), which floated on AIM in September 2000, announces that it has entered into conditional agreements to purchase Fast Track Events Ltd and Fast Track Sales Ltd (together 'Fast Track'), ISM Ltd ('ISM') and the business of Wind Group Holding Limited ('Wind Group'). Sports Resource was created to bring together individually successful and complementary businesses under one umbrella organisation. The three acquisitions deliver on this strategy. This structure provides opportunities for Fast Track, ISM and the business of Wind Group, including enhanced access to funding, greater logistical support, opportunities for cross fertilisation of ideas and improved public profile. The directors of Sports Resource believe that this will provide the enlarged group with access to new sports and countries as well as enhancing its ability to make further complementary acquisitions. Fast Track is a specialist sports marketing consultancy and event management agency created by Alan Pascoe and Edward Leask in April 1998. Clients include English Sports Council, Federation Internationale du Sport Universitaire, Laureus World Sports Awards, UK Athletics and Well Well Well Ltd. The total consideration for Fast Track, at the rights issue price, values it at £12.5 million. ISM, which was established in 1989 by Andrew 'Chubby' Chandler, is a sports representation, events management and sports consultancy business, acting as agent to professional golfers and cricketers and its clients include Europe's top two professional golfers, Lee Westwood and Darren Clarke. The total consideration for ISM, at the rights issue price, values it at £12.5 million. Wind Group, established in October 1997 by Luciano Secchi, is a consultancy specialising in sports sponsorship strategy and advice. Clients include the Ferrari Formula 1 team, Juventus football club, Aprilia Motorbikes, Michael Schumacher and Rubens Barrichello. The initial consideration for the business of Wind Group, at the rights issue price, is valued at £12.5 million. Following completion of the acquisitions, Alan Pascoe, Andrew Chandler, Edward Leask, Luciano Secchi and Lord Coe OBE (Sebastian Coe) will join the board of Sports Resource. The current directors of Sports Resource believe that, combined with the strength of the existing board, this creates a management team with a wide range of experience and contacts within the commercial sports market which they believe will allow them to quickly establish Sports Resource as a major group within this market. The consideration for Fast Track will be satisfied by the issue of 8.8 million consideration shares and £1.5 million in cash, which at the rights issue price, values Fast Track at £12.5 million. The consideration for ISM will be satisfied by the issue of 8.4 million consideration shares and £2.0 million in loan notes, which at the rights issue price, values ISM at £12.5 million. The initial consideration for the business of Wind Group will be satisfied by the issue of 8.4 million consideration shares and £2.0 million in cash, which at the rights issue price, values the business of Wind Group at £12.5 million. Deferred consideration of up to £10.0 million may become payable in respect of the business of Wind Group dependent upon the profit before tax for the year ending 31 December 2001. In addition, Sports Resource announces that it proposes to raise approximately £10.25 million, net of expenses, by way of a 3 for 5 rights issue of 8,999,916 rights issue shares at a price of 125p per share. The rights issue has been underwritten by WestLB Panmure other than in respect of a total of 3,810,000 rights issue shares for which irrevocable undertakings to take up their entitlements have been received from the current directors of Sports Resource and Sportsworld Media Group plc. The proceeds of the rights issue will be used in part to finance the cash element of the consideration payable for the acquisitions and for the redemption of the ISM loan notes. The remainder will provide additional working capital for the enlarged group. Commenting on Sports Resource's proposed acquisitions, Chris Akers, Chairman said: 'These acquisitions, the first since our flotation on AIM in September 2000, will unite an unrivalled collection of sports, teams and players with different areas of proven expertise under one umbrella organisation. The acquisitions will give us exposure to Europe's top golfers, the reigning Formula 1 constructor and driver, and British sport which has recently received a phenomenal boost after our most successful Olympics for 80 years. We have taken the innovative step of beginning to consolidate the highly fragmented commercial sports market and we look forward with anticipation to building upon the solid platform this gives us, and searching for further acquisitions in the coming year.' Enquiries: Sports Resource Group plc Tel: 020 7643 5398 Chris Akers, Executive Chairman Rodger Sargent, Finance Director WestLB Panmure Limited Tel: 020 7638 4010 Keith Anderson Richard Potts Lucy Tilley Buchanan Communications Tel: 020 7466 5000 Charles Ryland Catherine Miles SPORTS RESOURCE GROUP PLC Introduction Sports Resource announces that it has entered into conditional agreements to acquire the whole of the issued share capital of Fast Track and ISM and the business of Wind Group for an aggregate initial consideration of £37.5 million. Deferred consideration of up to £10.0 million may become payable in respect of the business of Wind Group dependent upon the profit before tax for the year ending 31 December 2001. Fast Track is a specialist sports marketing consultancy and event management agency, ISM is a sports representation, events management and sports consultancy business, and Wind Group is a consultancy specialising in sports sponsorship strategy and advice. The consideration for Fast Track will be satisfied by the issue of 8,800,000 consideration shares and £1.5 million in cash, which, at the rights issue price, values Fast Track at £12.5 million. The consideration for ISM will be satisfied by the issue of 8,400,000 consideration shares and £2.0 million in loan notes, which, at the rights issue price, values ISM at £12.5 million. The initial consideration for the business of Wind Group will be satisfied by the issue of 8,400,000 consideration shares and £2.0 million in cash, which, at the rights issue price, values the business of Wind Group at £12.5 million. Sports Resource also proposes to raise approximately £10.25 million, net of expenses, by way of a rights issue to qualifying shareholders of 8,999,916 rights issue shares, on the basis of 3 rights issue shares for every 5 ordinary shares held at the record date, at a price of 125p per share. The rights issue has been underwritten by WestLB Panmure other than in respect of a total of 3,810,000 rights issue shares for which irrevocable undertakings to take up their entitlement have been received from the directors of Sports Resource and Sportsworld Media Group plc. To enable certain institutional shareholders to obtain a firm investment in the company, Christopher Akers and Nigel Robertson have undertaken not to subscribe for rights entitlements representing 1,200,000 ordinary shares and these rights issue entitlements have been placed by WestLB Panmure with institutional investors at a price of 35p per share, nil paid. The proceeds of the rights issue will be used in part to finance the cash element of the consideration payable for the acquisitions and for the redemption of the ISM loan notes. The remainder will provide additional working capital for the enlarged group. Alan Pascoe and Edward Leask created Fast Track in April 1998. It is a specialist sports marketing consultancy and event management agency. Clients include English Sports Council, Federation Internationale du Sport Universitaire, Laureus World Sport Awards, UK Athletics and Well Well Well Ltd. Audited results for the year ended 30 September 2000 show that Fast Track achieved revenues of £2,177,000, and operating profits of £21,000. At 30 September 2000, Fast Track had net assets of £35,000. After adding back non-recurring directors' remuneration, the adjusted operating profit of Fast Track for the year ended 30 September 2000 was £545,000. ISM, which was established in 1989 by Andrew 'Chubby' Chandler, is a sports representation, events management and sports consultancy business, acting as agent to professional golfers and cricketers. ISM represents 26 sportsmen, including Europe's top two professional golfers, Lee Westwood and Darren Clarke. ISM also creates and manages amateur and professional golf tournaments. Audited results for the 9 months ended 30 September 2000 show that ISM achieved revenues of £1,268,000, and operating profit of £548,000. At 30 September 2000, ISM has net assets of £100. The operating profit of ISM for the nine months ended 30 September 2000 of £548,000 is equivalent to £731,000 on an annualised basis. Wind Group, established in October 1997 by Luciano Secchi and based in Switzerland, is a consultancy specialising in sports sponsorship strategy and advice. Sports covered include Formula 1, football, motorcycling, volleyball and cycling. Clients include the Ferrari Formula 1 team who are the reigning Formula 1 constructors' champions, Juventus football club, Aprilia Motorbikes, Michael Schumacher, who is the reigning Formula 1 World champion, and Rubens Barrichello. Unaudited results for the 9 months ended 30 September 2000 show that Wind Group achieved revenues of US$2,342,000, and operating loss of US$90,000. After adding back non-recurring directors' remuneration, the operating loss of Wind Group for the nine months ended 30 September 2000 of US$90,000 results in an operating profit of £758,000 (US$1,162,000) on an annualised basis. Following completion of the acquisitions, Alan Pascoe, Andrew Chandler, Edward Leask, Luciano Secchi and Lord Coe (Sebastian Coe) will join the board of Sports Resource. The current directors of Sports Resource believe that, combined with the strength of the existing board, these appointments will create a management team with a wide range of experience and contacts within the commercial sports market which they believe will allow them to quickly establish Sports Resource as a major force within this market. Given the size of Fast Track, ISM and the business of Wind Group relative to Sports Resource, the acquisitions are subject to the approval of shareholders in general meeting and completion of the rights issue. The rights issue is not conditional upon completion of the acquisitions. An extraordinary general meeting of Sports Resource to approve these proposals will be held on 2 January 2001. A prospectus setting out full details of the above mentioned proposals is being sent to Sports Resource shareholders today. Information on Sports Resource Sports Resource was incorporated on 31 July 2000 and its existing ordinary shares were admitted to trading on AIM on 13 September 2000. The Company has not published any financial results since incorporation. It was established to acquire businesses which generate their revenue from the commercial sports industry and the directors' intention was to initially consider companies active within sports representations and sports consultancy. The directors consider that Fast Track, ISM and the business of Wind Group meet the investment criteria that they determined when forming the Company. Sports Resource was created to bring together individually successful and complementary businesses under one umbrella organisation. This structure provides opportunities for such companies, including enhanced access to funding, greater logistical support, opportunities for cross fertilisation of ideas and improved public profile. The directors believe that this will provide the enlarged group with access to new sports and countries as well as enhancing its ability to make further complementary acquisitions. Reasons for the Acquisitions The commercial sports market is highly fragmented, with a few large companies, for example IMG, ISL and Octagon, competing with many smaller entities. Typically, these smaller companies have difficulty in growing organically due to the administrative and logistical problems of handling a large client base and often lack the financial strength to grow by acquisition. Through the acquisitions of Fast Track, ISM and the business of Wind Group, the directors believe a critical mass can be established within the sports consultancy, sports representation and events management areas, delivering synergies and economies of scale through the reduction of costs and the creation of additional revenue streams across different sectors of the market. In addition, the provision of services across a wide range of sports should allow the Company to generate additional commercial opportunities amongst different clients and sports. Information on Fast Track - Description of business Prior to setting up Fast Track, Alan Pascoe and Edward Leask ran The Sponsorship Group, branded as API, which was a sports marketing, promotion and sponsorship consultancy, for over 20 years. API was one of the world's largest companies in its field and was subsequently sold to The Interpublic Group of Companies in 1997. API was a multinational company covering many locations including Vancouver, Hong Kong, New York, Washington, London, Cape Town and Kuala Lampur. Projects managed through API included the handling of the US Soccer Federation Rights in the lead up to the US hosting of the 1994 FIFA World Cup, creating a substantial commercial base for the Commonwealth Games between 1990 and 1998, inaugurating Fantasy Football for the Daily Telegraph, and creating the first title sponsorship of the Five Nations Rugby tournament with Lloyds TSB. Using the experience and knowledge that Alan Pascoe and Edward Leask had gained building up API, they developed Fast Track in April 1998 as a specialist sports marketing consultancy and event management agency. Fast Track aims to serve major corporations, event organisers and sporting federations and has quickly established itself as a leading UK events and sports marketing consultancy, developing specialist services for its clients and is now expanding into international projects. Fast Track has offices in London and Portsmouth and currently employs 26 staff. A key area of Fast Track's expertise is event presentation. Fast Track has developed a specialist team who have created and implemented a new concept in all areas of sports presentation. Experts in commentary, sound, lighting, video and presentation were included in the team that presented 10 athletics meetings covering 12 days of live televised sport in the UK within the last year. Integration of improved audio and visual techniques with strategic timing of the athletic events themselves have led to a more attractive and dynamic product that has greatly increased audience attendance and public interest in the sport. Having also successfully presented The European Athletics Cup earlier this year, Fast Track has recently won the contract to undertake the in-stadium presentation for the World Athletics Championships, to be held in Edmonton, Canada in 2001. Presentation skills such as these are applicable to other sports and other countries, and the directors believe that the mix of businesses between Fast Track, ISM, and the business of Wind Group and their associates will lead to more opportunities for the Fast Track event presentation team. Fast Track is currently retained as a consultant to the following clients: English Sports Council Fast Track advises on and aims to raise awareness of the Council's new brand name 'Sport England'. This branding programme is due to culminate at the next Commonwealth Games which are to be held in Manchester in 2002. Fast Track is retained by Sport England to negotiate with national governing bodies of sport to secure brand exposure for Sport England and the Sport England Lottery Fund. Fast Track has formed successful relationships with over 20 governing bodies including the English Cricket Board, the All England Netball Association, the British Amateur Wrestling Association and the Rugby Football Union. Federation Internationale du Sport Universitaire ('FISU') FISU is the world body responsible for University sports and both the summer and winter Universiades. These events are the world's second largest multi sports games after the Olympics, and are held every two years. FISU holds the World University Championships in alternate years. Over 6,000 participants took part in the last summer games, with almost 1,500 in the winter games, which involved sportsmen and sportswomen from over 160 countries, including many Olympic and World Championship medalists. FISU have retained Fast Track as their sports marketing, television and sponsorship consultants. This is a substantial new client for Fast Track, which initially involves advising on the next summer Universiade Games to be held in Beijing, China in August 2001 and the creation of the television and sponsorship programme for the next five years. Laureus World Sports Awards ('LWSA') LWSA was created in 1999 by Daimler Chrysler and Richemont to be one of the most cherished and distinguished annual prizes in sport, awarded in recognition of sporting excellence across the globe. It is intended that the LWSA will ensure that sport's contribution to the world is recognised and celebrated every year. Fast Track provides consultancy and event management for the Laureus Regatta, part of the LWSA, utilising Edward Leask's specialist sailing knowledge with Fast Track's event management team. Competitors in the 1999 Laureus Regatta have included HSH Prince Albert, Sir Peter Blake, Samuel Jackson, David and Pamela Hasselhoff and Emerson Fittipaldi. PricewaterhouseCoopers ('PwC') Fast Track advised PwC on potential sponsorship activity in Europe, the Middle East and Africa. A number of activities were reviewed in depth including music, tennis, golf, skiing and sailing. Fast Track negotiated sponsorship contract details on behalf of PwC for a major sponsorship contract. UK Athletics As a result of the experience and contacts that Alan Pascoe and Edward Leask have gained and developed, Fast Track was approached in 1998 by UK Athletics, the governing body of the sport in the UK, to advise on the sport and was given a wide-ranging remit to act as commercial consultant to the sport with the aim of reviving and re-launching the sport. Fast Track worked in areas including television rights, sponsorship sales, event marketing and management. Following its appointment, the company set about attracting new commercial partners to the sport whilst taking responsibility for staging the major televised meetings in the UK, a major part of which was the five year television rights package it negotiated with the BBC. Having identified the opportunity for one major sponsor, a contract was negotiated with CGU Insurance, now re- branded as Norwich Union. This was a four year £10 million deal, backed up by a commensurate support budget, covering all aspects of the sport from grass roots programmes to title sponsorship of the seven showpiece televised meetings. This was shortly followed by the negotiation of other significant sponsorship income for UK Athletics with companies including Reebok, Aqua-Pura, McDonald's, Rover, Seiko, Severn Trent Water, Energise, and the pharmaceutical company Novartis. In total, over £30 million has been raised for the sport and the televised events since 1998 through sponsorship and other promotional contracts arranged by Fast Track. Well Well Well Ltd ('WWW') WWW is the UK's largest mineral water supplier. Fast Track advised on the re-launch of their recently acquired Aqua-Pura brand, and also advised on and implemented a comprehensive sponsorship strategy for the company. Aqua-Pura is now the official mineral water of Jaguar Formula 1 racing and UK Athletics and is the title sponsor of the 'Road To' series of international athletics events. Fast Track has also placed Aqua-Pura within other major sporting events including the title sponsorship of the Women's Athletics programme and the Compaq European Grand Prix. UK sport in general, and athletics in particular, has recently received a tremendous boost following the Sydney Olympics with the British team winning 28 medals, the most successful Olympics for the country since 1920. The directors of Sports Resource believe that this success and the increase in public interest in athletics and its stars will present further commercial opportunities which Fast Track is ideally positioned to capitalise upon. Fast Track's sources of revenue include: - consultancy fees earned for advice on the staging of sports events, media liaison, rights sales and sponsorship negotiations; - commission based upon the value of sponsorship and worldwide television rights negotiated on behalf of sporting bodies and event organisers; - commission earned on licensing of merchandising goods sales; - fees earned for event presentation services at sporting events around the world; and - consultancy fees earned for advising corporate clients on their event sports sponsorship strategy and assisting in the implementation of the strategy. - Financial information on Fast Track Fast Track had net assets as at 30 September 2000 of £35,000. A summary of the trading results for Fast Track is set out below. Period from 15 April Year ended 1998 to 30 30 September September 1999 2000 £'000 £'000 Turnover 1,956 2,177 Operating profit 43 21 Profit on ordinary 49 27 activities before tax After adding back non-recurring directors' remuneration, the adjusted operating profit for the year ended 30 September 2000 was £545,000. Information on ISM - Description of business ISM was established in 1989. Having spent fifteen years playing on the PGA European Tour, Andrew Chandler was ideally placed to understand the requirements of, and the demands imposed upon, a modern professional sportsman. He recognised that the modern sporting environment had become so competitive that players needed to devote as much time as possible to their game and that, if the correct relationships could be formed, there was a potentially lucrative market for a company providing services that took away all commercial, logistical and administrative worries from the player. ISM has its head office in Cheshire and currently employs 13 staff. Golf Representation Starting with four clients, Carl Mason, Phil Harrison, Denis Durnian and Derrick Cooper, Andrew Chandler created a structure that removed all peripheral distractions from and demands on his clients. Due to the quality of the service provided, ISM has continually grown its client base and currently represents 22 golfers, including Lee Westwood and Darren Clarke (Europe's top two professional golfers), and Andrew Coltart and Paul McGinley. The services ISM provides range from day to day requirements such as the logistics of playing on golf tours - hotels, flights, car hire, etc, - to commercial matters such as sponsorship, marketing, advice on which tournaments to play in and dealing with the media and financial administration, including accounting, expenses, salaries and tax returns. This approach allows ISM's clients to concentrate on practising, playing and winning golf tournaments. In August 1990, Darren Clarke became the first amateur to turn professional with ISM. In 1991, Paul Broadhurst became ISM's first golfer to play in the Ryder Cup. Mark Roe won the Lancome Trophy in 1992 and was the company's first client to win a European Tour event. In 1994, Darren Clarke became ISM's first player to reach the top 50 in the World Ranking and to play in the US Open. In 1998, ISM's players won a record eleven tournaments, with Lee Westwood winning seven, making him their first world top ten ranked player. In 1999, Darren Clarke, Lee Westwood and Andrew Coltart played in the Ryder Cup, during which Darren Clarke and Lee Westwood beat the world number 1 and 2, Tiger Woods and David Duval. In February 2000, Darren Clarke beat Tiger Woods in the final of the Andersen Consulting World Match Play. In October 2000, Lee Westwood, defeated Colin Montgomerie to become Cisco World Match Play Champion. In November 2000, Lee Westwood and Darren Clarke finished the season as Europe's top 2 golfers, both were ranked in the world top 10, whilst Andrew Coltart and Paul McGinley both finished the season in the European top 20. Event Creation and Management In 1995, ISM promoted and ran its first PGA approved event, the Glen Dimplex Irish Match Play Championships. This event took place at the same time as the World Match Play tournament, and was created to provide players not involved in that event with a European tour event. In 1996, ISM launched The Daily Telegraph Business Golf Championship. This new concept for companies allows them to entertain clients and employees at the UK's top golf courses, including Sunningdale, Turnberry and Royal Birkdale. For the 2000 competition, ISM organised 23 qualifying events around the country, with each event consisting of 16 teams of 4 players. The winners of each event qualify for the final held at The De Vere Belfry in Warwickshire. Sponsors for the competition include the healthcare company SSL International plc, Sodexho Alliance, the world's largest food service company and Northern Rock bank. In 2000, ISM created its first European Seniors Tour event: the Daily Telegraph European Seniors Match Play Championship, played in October at Le Meridien Penina Golf Course in the Algarve, Portugal. This new tournament is the first Seniors Tour competition to use the match play format. The leading 32 players from the Seniors Tour qualified to play for the £100,000 prize purse. ISM has secured sponsorship for the tournament from The Daily Telegraph, SSL International plc, Sodexho Alliance, British Airways Holidays, Goldsmiths and National Car Rental. Other Sports In 1997, ISM took on its first cricketing client, England and Surrey batsman Graham Thorpe, followed by Lancashire and England all-rounder Andrew Flintoff in 1998. ISM also represents ex England and Lancashire batsman Neil Fairbrother and Lancashire bowler Chris Schofield who won his first England cap this summer at just 20 years of age. Graham Thorpe and Andrew Flintoff are currently playing on the England Winter 2000 tour. ISM have recently created a football division and hope to announce their first clients in the near future. ISM's sources of revenue include: - a percentage based commission of tournament prize money won by its players; - a percentage based commission of tournament appearance money earned by its players; - a percentage of commission earned by players for their corporate attachments to particular golf clubs; - a percentage of fees earned by players for wearing sponsors' clothing and playing with sponsors' golf equipment; - annual consultancy fees to advise corporate clients on the golf industry; - retained profits from golf event management and tournament organisation; - running corporate hospitality events at golf tournaments around the world, including the Ryder Cup, the US Masters and the British Open; and - a percentage of commission earned by players for their corporate endorsements. - Financial information on ISM ISM had net assets as at 30 September 2000 of £100. A summary of the trading results for ISM is set out below. Year ended 9 months 31 December ended 30 September 1997 1998 1999 2000 £'00 £'00 £'00 £'000 0 0 0 Turnover 780 979 972 1,268 Operating Profit 156 276 218 548 Profit on ordinary 150 283 211 541 activities before tax The operating profit for the 9 months ended 30 September 2000 of £548,000 is equivalent to £731,000 on an annualised basis. Information on Wind Group - Description of business Wind Group, established in October 1997 by Luciano Secchi, is a consultancy specialising in sports sponsorship strategy and advice. Wind Group's head office is located in Switzerland and it currently employs 5 staff. Wind Group seeks to understand and match the needs of both the sport and the sponsor so that each party meets its strategic requirements. The Company has built its success on the personal relationships it has with its sporting clients and sponsors. Every client is allocated a project manager in order to understand that client's objectives so that they can match those client's specific needs to the available sponsorship opportunities. It is structured so that each project manager deals with a particular sport, thus allowing them to build up an extensive knowledge of that sport and develop relationships with the key individuals within each market place. This structure allows cross- selling within the company; for example, a sponsorship opportunity created by Wind Group's Formula 1 project manager may be passed on to Wind Group's motorcycle or football clients. This approach reflects Wind Group's aim to foster long-term relationships between both parties. The success of this approach is demonstrated by the quality of Wind Group's client list: Ferrari Formula 1 team Ferrari is one of the most famous names in world sport. They have won 135 grand prix since their first victory in 1951 and recently won its tenth world Constructors' title. Many of the world's greatest drivers including Alberto Ascari, Juan Manuel Fangio, Graham Hill, John Surtees, Nikki Lauda, Gilles Villeneuve, Nigel Mansell, Alain Prost and most recently Michael Schumacher have driven for Ferrari. Ferrari have recently won the 2000 Formula 1 Constructors' title, with Michael Schumacher winning his third drivers' world Formula 1 championship. Wind Group has arranged sponsorship for Ferrari from Federal Express as Official Sponsor. Wind Group is in the process of negotiating sponsorship with American Express as Official Ferrari Club Supplier, Adecco, the temporary human resources supplier, SAP Software, Software AG, STM Microchips and Unisys. Prost Grand Prix Prost Grand Prix was formed in 1997, when quadruple world drivers champion Alain Prost acquired the Ligier Formula 1 team. The team finished its first season in seventh place in the Constructors' Championship and has recently secured a two-year deal to use Ferrari V10 engines from 2001. Wind Group will be working with Prost Grand Prix to create sponsorship opportunities in the coming season. McDonald's Wind Group is currently arranging and co-ordinating McDonald's Formula 1 debut as a potential sponsor with Ferrari, as well as their on-track banner advertising. Juventus Football Club Founded in 1897, Juventus is one of Europe's most successful football clubs. They have won all the major Italian and European competitions, including the UEFA Cup and the Champions Cup, on several occasions. Wind Group has arranged sponsorship from Weber & Broutin Constructions, Cagiva motorbikes, Frank Muller watches, Select football manufacturers and Sony Electronics. AC Milan Football Club Founded in 1899, and based in the San Siro stadium, AC Milan is one of Europe's greatest football clubs. They won their 16th Italian League Championship in 1999, their centenary year, and have won the Champions League five times. Wind Group has arranged sponsorship from Computer Associates. Aprilia Motorbikes Aprilia has been competing in the World Motorcycle Championships since 1985. In that time, it has won fourteen titles (nine riders' titles and five manufacturers' titles) and gained over one hundred victories in Grand Prix races. Wind Group has secured sponsorship from Sony, Sony Playstation, Omnitel Ericsson and Sergio Tacchini. Wind Group is in the process of negotiating sponsorship from EDS Software, Exide Batteries and Hewlett Packard. Michael Schumacher He is regarded as one of the greatest Formula 1 drivers ever. Having made his debut in 1991, he became World Champion in 1994 and 1995 when driving for Benetton. He later moved to Ferrari where he has recently won his third world drivers title. Wind Group has secured sponsorship from Kerakoll, the adhesives components company and is in the process of negotiating sponsorship from Valleverde, the Italian shoe manufacturer. Rubens Barrichello He made his debut in Formula 1 in 1993, has started in well over 100 Grand Prix and has had several podium finishes in his role as Ferrari's second driver behind Michael Schumacher. Wind Group has secured sponsorship for Barrichello from TAG Heuer and Valleverde. Wind Group is in the process of negotiating sponsorship with Excite.com and Adecco. Wind Group's key sources of revenue are the charging of commission on sponsorship income generated for clients and the creation and acquisition of commercial and sponsorship opportunities and the subsequent matching of these opportunities to suitable sponsors. It also earns royalties and commissions from the licensing and merchandising of goods which promote its clients. - Financial information on Wind Group A summary of the trading results for Wind Group is set out below. 15 months Year 9 months ended 31 ended 31 ended 30 December December September 1998 1999 2000 US$'000 US$'000 US$'000 Turnover 872 705 2,342 Operating profit/(loss) 81 4 (90) After adding back non-recurring directors' remuneration, the operating loss for the 9 months ended 30 September 2000 of US$90,000 results in an operating profit of £758,000 (US$1,162,000) on an annualised basis. Principal terms of the Acquisitions The terms of the Fast Track acquisition agreements provide for the sale of the entire issued share capital of Fast Track Events and Fast Track Sales to Sports Resource in consideration for the issue of 8,800,000 consideration shares and £1.5 million in cash. The terms of the ISM acquisition agreement provide for the sale of the entire issued share capital of ISM Group Limited, which holds the whole of ISM's issued share capital, to Sports Resource in consideration for the issue of 8,400,000 consideration shares and £2.0 million in ISM loan notes. The terms of the Wind Group acquisition agreement, whereby the Company will acquire the business of Wind Group, provides for the sale of the entire share capital of Wind Group Holding S.A. and Wind Group Management Limited to Sports Resource in consideration for the issue of 8,400,000 consideration shares and £2.0 million in cash. Additional consideration of £2.5 million will become payable if the business of Wind Group achieves profit before tax for the year ending 31 December 2001 of £3.0 million. To the extent that the business of Wind Group's profit before tax for the year ending 31 December 2001 exceeds £3.0 million, the additional consideration payable will increase by £5 for every additional £1 of profit before tax up to a total maximum additional consideration of £10.0 million (including the £2.5 million referred to above). Additional consideration will be payable in cash or shares at the option of Sports Resource. The principal vendors have given certain warranties and indemnities in favour of the Company in relation to the respective businesses of Fast Track and ISM and the business of Wind Group. The principal vendors have also agreed not to dispose of any of their consideration shares for a period of one year from the admission of those Shares to trading on AIM. Principal terms of the Rights Issue The proceeds of the rights issue, which will raise approximately £10.25 million (net of expenses) for the Company, will be used in part to finance the cash element of the consideration payable for the acquisitions and for the redemption of the ISM loan notes. The remainder will provide additional working capital for the enlarged group. The rights issue is not conditional on completion of the acquisitions. In the event that one or more of the acquisitions are not completed, the balance of the proceeds of the rights issue will be used to fund part of the cash consideration for future acquisitions. The rights issue shares are being offered to qualifying shareholders at 125p per share, payable in full on acceptance no later than 3.00 p.m. on 28 December 2000. The rights issue shares have been provisionally allotted on the following basis: 3 Rights Issue Shares for every 5 existing Ordinary Shares held at the record date and so in proportion for any greater number of ordinary shares then held. Fractional entitlements to rights issue shares will not be allotted and entitlements of qualifying shareholders have been rounded down to the nearest whole number of rights issue shares. The rights issue shares will, when issued and fully paid, rank pari passu in all respects with the existing ordinary shares. The consideration shares will not rank for entitlements under the rights issue. The rights issue (save for 3,810,000 rights issue shares which the directors of Sports Resource and Sportsworld Media Group plc have irrevocably undertaken to take up) has been fully underwritten by WestLB Panmure who are also brokers to the issue. The rights issue is conditional upon the underwriting agreement becoming unconditional in all respects and not being terminated prior to Admission and admission taking place by 9.00 a.m. on 8 December 2000 or such later time and/or date (not being later than 9.00 a.m. on 22 December 2000) as the Company and WestLB Panmure may agree. Provisional allotment letters in respect of the rights issue shares are being dispatched to qualifying shareholders today and it is expected that admission will become effective and dealings in the rights issue shares, nil paid, will commence on 8 December 2000. The current directors of Sports Resource and also Sportsworld Media Group plc, who together are beneficially interested in approximately 55.7 per cent. of the existing ordinary shares of the Company, have irrevocably undertaken to take up their entitlements under the rights issue, in respect of 3,810,000 rights issue shares, or 42 per cent. of the rights issue entitlements. To enable certain institutional shareholders to obtain a firm investment in the Company, Christopher Akers and Nigel Robertson have undertaken not to subscribe for rights entitlements representing 1,200,000 ordinary shares and these rights issue entitlements have been placed with institutional investors by WestLB Panmure at a price of 35p per share, nil paid. Current trading and prospects The directors and the proposed directors of Sports Resource anticipate that the growth of Fast Track's, ISM's and the business of Wind Group's revenues will continue in the forthcoming year and look forward to the future with confidence. Change in the Company's year end The directors and the proposed directors of Sports Resource intend to change the accounting reference date of the company to 31 December following completion. The Board The biographical details of the proposed directors are set out below: Alan Pascoe MBE (Executive Deputy Chairman), aged 53, is a former Olympic athlete who was a silver medallist in the 1972 Olympics and a European and Commonwealth gold medallist in 1974. He has over 25 years experience in the sports marketing and promotional business and has extensive contacts throughout the sporting, corporate and political world. Prior to setting up Fast Track, he founded API which he grew into one of the largest sports marketing, promotion and sponsorship consultancies in the world. Projects managed included the commercial development of the Commonwealth Games between 1990 and 1998 and creating Lloyds TSB as the first title sponsor for the Five Nations Rugby tournament. Andrew Chandler (Executive Director), aged 47, was a professional golfer playing tournaments throughout the world, the highlight of which was when he won the Sao Paulo Open in 1985. In 1989, Andrew founded ISM and a year later Darren Clarke joined the stable on turning professional. For the next three years, ISM signed many of the young up and coming golfers rising through the amateur ranks, including, in 1993, Lee Westwood. Since the company's incorporation eleven years ago, Andrew has overseen all aspects of its development, utilising his many years experience of playing professional golf. Edward Leask (Executive Director), aged 53, is a former Olympic yachtsman, achieving fourth place in both the 1984 Los Angeles and 1988 Seoul Olympic Games and was a silver medallist in the Olympic Flying Dutchman Class World Championships. He is a Chartered Accountant and built a five partner practice, from which he retired in 1992. He was the co-founder and finance director of API with Alan Pascoe and they have been business partners for the past 25 years. Luciano Secchi (Executive Director), aged 47, is a former Formula 3 and Lancia HF driver. He has been involved in the sports sponsorship business since 1980, securing contracts with Ceramiche Ragno for the Arrows Formula 1 Team as main sponsor and subsequently working with the Toleman Lotus and Onyx Formula 1 Teams and drivers such as Ayrton Senna, Keke Rosberg, Stephan Johansson and Nelson Piquet. The Lord Coe OBE (Non-executive Director), aged 44, is a former double Olympic gold medallist and world record holder. Sebastian Coe retired from competitive athletics in 1990 as one of the greatest athletes of the modern era. He retains close links with his sport through a variety of national and international bodies, including his involvement with the International Olympic Committee. From 1992 to 1997, he was the Member of Parliament for Falmouth and Camborne, before becoming Private Secretary to the Leader of the Opposition, William Hague. He is Chairman of Fast Track Events, a regular radio and television broadcaster, and a sports columnist for the Daily Telegraph. Key Man Insurance The directors of Sports Resource regard the executive proposed directors of Sports Resource and certain players as key personnel and believe that they are very important to the future success of the company. As such, the directors of Sports Resource will have put in place key man insurance on each of these individuals prior to completion. Lock-in Arrangements The directors and proposed directors of Sports Resource aggregate interests in the enlarged share capital on completion of the proposals are estimated to amount to approximately 33.2 million ordinary shares representing approximately 66.8 per cent. of the enlarged share capital. On the admission of the existing ordinary shares to AIM in September 2000, the current directors of Sports Resource undertook not to dispose of any shares in the company for 12 months save in certain restricted circumstances. The proposed directors of Sports Resource have agreed not to dispose of any interests in ordinary shares which they receive pursuant to the acquisitions for 12 months from the date such securities are admitted to AIM save in certain limited circumstances. EXPECTED TIMETABLE OF PRINCIPAL EVENTS Record date for entitlement to the close of business on rights issue 29 November 2000 Provisional allotment letters 7 December 2000 despatched Dealings in rights issue shares 8 December 2000 commence, nil paid and existing Ordinary Shares trade ex-rights Latest time and date for splitting 3.00 p.m. on 22 provisional allotment letters, nil December 2000 paid Latest time and date for acceptance 3.00 p.m. on 28 and payment in full and registration December 2000 of renunciation in respect of the rights issue shares Dealings in rights issue shares 29 December 2000 commence, fully paid Latest time and date for receipt of 10.00 a.m. on 31 proxy cards for the EGM December 2000 EGM 10.00 a.m. on 2 January 2001 Completion of the Acquisitions 2 January 2001 Dealings in consideration shares 3 January 2001 commence and dealings in existing ordinary shares and rights issue shares, fully paid, re-commence CREST accounts credited and by 5 January 2001 definitive share certificates despatched for new ordinary shares KEY STATISTICS Existing Ordinary Shares 15,000,000 Consideration Shares 25,600,000 Rights Issue Shares 8,999,916 Enlarged number of Ordinary Shares 49,599,916 in issue following the Proposals Market Capitalisation (1) £62.0 million Estimated net proceeds arising from £10.25 million the Rights Issue Estimated net proceeds arising from £4.75 million the Rights Issue, after payment of cash consideration for the acquisitions and assuming repayment of ISM loan notes (1) At the Rights Issue Price of 125p Notes: 1. Sports Resource Group plc is incorporated and registered in England and Wales under number 4046907. 2. The nominated adviser and nominated broker is WestLB Panmure Limited. 3. A prospectus, including the requirements for an AIM admission document, is available from WestLB Panmure Limited at 35 New Broad Street, London EC2M 1SQ from today until 2 January 2001 and which alone contains full details of the Company and its securities. 7 DECEMBER 2000 Enquiries: Sports Resource Group plc Tel: 020 7643 5398 Chris Akers, Executive Chairman Rodger Sargent, Finance Director WestLB Panmure Limited Tel: 020 7638 4010 Keith Anderson Richard Potts Lucy Tilley Buchanan Communications Tel: 020 7466 5000 Charles Ryland Catherine Miles

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