SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 5, 1999 (December 21, 1998)
Sport Supply Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-10704 75-2241783
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1901 Diplomat Drive, Farmers Branch, Texas 75234
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(972) 484-9484
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events
Incorporated herein by reference is a press release attached hereto
as Exhibit 5(a) and previously released by Registrant through media
sources concerning the acquisition of 5% of the Company's common stock
by Oaktree Capital Management, LLC.
Exhibits Index:
Description of Exhibit
5(a) Press Release
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Sport Supply Group, Inc.
Date: January 5, 1999
By: /s/ John P. Walker
John P. Walker
President, Chief Operating Officer and
Chief Financial Officer
EXHIBIT 5(a)
FOR FURTHER INFORMATION:
At the Company: At the Financial Relations Board:
John P. Walker Scott Brooks Tracy Gutwillig Bob Schwaller
President General Information Analyst Inquiries Media Inquiries
972/406-7108 972/450-6562 312/266-7800 972/640-6563
FOR IMMEDIATE RELEASE
SPORT SUPPLY GROUP, INC. ANNOUNCES ACQUISITION OF 5% OF COMMON
STOCK BY OAKTREE CAPITAL MANAGEMENT, LLC.
SPORT SUPPLY IS RETAINING FINANCIAL ADVISOR TO EVALUATE
ALTERNATIVES TO INCREASE VALUE FOR ALL SHAREHOLDERS
DALLAS, TEXAS, (December 21, 1998) - Sport Supply Group, Inc. (NYSE:
GYM) announced today that Oaktree Capital Management, LLC, an $11
billion private investment partnership specializing in investments in
undervalued companies ("Oaktree"), filed a Schedule 13F with the
Securities and Exchange Commission reporting that Oaktree recently
acquired 382,945 shares of Sport Supply's common stock. Oaktree's
ownership equates to approximately 5% of Sport Supply's issued and
outstanding common stock.
Sport Supply's largest shareholder, Emerson Radio Corporation (AMEX:
MSN), announced on Friday, December 18, 1998 that Oaktree submitted a
proposal to acquire more than 29,000,000 shares of Emerson's common
stock owned by Geoffrey P. Jurick, the Chairman of the Board and Chief
Executive Officer of Emerson and Sport Supply. The 29,000,000 shares
are pledged to creditors of Mr. Jurick and constitute approximately 60%
of Emerson's issued and outstanding common stock. Oaktree currently
beneficially owns approximately 7% of Emerson's issued and outstanding
common stock. If Oaktree acquires Mr. Jurick's ownership interest in
Emerson, Oaktree will beneficially own approximately 67% of Emerson's
issued and outstanding common stock.
Emerson owns 2,269,500 shares of Sport Supply's common stock and
warrants to acquire an additional 1,000,000 shares of Sport Supply's
common stock for $7.50 per share. Sport Supply has 7,410,703 shares of
issued and outstanding common stock, of which Emerson beneficially owns
approximately 39%. If Oaktree obtains control of Emerson, Oaktree will
beneficially own approximately 44% of Sport Supply.
<PAGE>
The proposal to acquire Mr. Jurick's ownership interest in Emerson
is described in an amendment to a Schedule 13D. Oaktree stated in the
Schedule 13D that it acquired its initial investment in Emerson in
connection with its investigation of a possible restructuring of
Emerson's balance sheet and asset deployment strategy in a manner that
will produce a favorable return on its investment. Oaktree also stated
in the Schedule 13D that potential restructuring strategies include, but
are not limited to, an exchange of its securities, properties or cash
for assets of Emerson, including the shares of Sport Supply owned by
Emerson, a sale of Emerson's shares of Sport Supply in one or more
public or private transactions or a divestiture or spin-off of Sport
Supply. Oaktree went on to say that it is not seeking to change the
operating management of Emerson or its strategic course. As a condition
of the proposal to acquire the 29,000,000 shares, Oaktree indicated that
all corporate governance issues with respect to Emerson and Sport Supply
be resolved to its sole approval.
Geoffrey P. Jurick, Chairman of the Board and Chief Executive
Officer of Emerson and Sport Supply, stated, "Although Oaktree has not
filed a Schedule 13D with respect to Oaktree's investment in Sport
Supply, it appears that Oaktree's intent is to obtain a controlling
position in Sport Supply by obtaining control of Emerson. Obtaining
control of Emerson would possibly enable Oaktree to gain control of
Sport Supply at a deep discount to Sport Supply's true going concern
value. Oaktree offered to pay approximately $14,600,000 to obtain
control of Emerson. Emerson's common stock ownership in Sport Supply
alone is valued at approximately $16,000,000, based upon a $7 market
price. This valuation does not include the Emerson warrants to purchase
1,000,000 shares of Sport Supply's common stock, any control premium or
any other assets of Emerson." Mr. Jurick referred to Oaktree's offer as
"unrealistically low."
Mr. Jurick emphasized, "Oaktree is one of the few investors in the
marketplace that has recognized that Sport Supply's shares of common
stock are significantly undervalued. We are fully aware that Sport
Supply's shares have been trading at a deep discount despite the
Company's strong financial performance. Consequently, Sport Supply has
repurchased approximately 1,000,000 shares of common stock since Sport
Supply announced its share repurchase program in 1997. The Sport Supply
Board recently approved repurchasing an additional 1,000,000 shares of
its common stock."
Mr. Jurick also stated that he believed Sport Supply's share price does
not reflect the Company's many accomplishments since Emerson obtained
its ownership position in December 1996, including the following:
Increased earnings by approximately 700%
Increased earnings before income tax by approximately 800%
Increased gross revenues by approximately 23%
Increased cash flow per share from $0.36 to approximately $1.00
Divested unprofitable operations
Reduced debt from 45% to 6% of total capital
<PAGE>
Mr. Jurick concluded, "Sport Supply had now established its credibility
in the marketplace and that the Sport Supply Board of Directors would
take all actions reasonably necessary to ensure that all shareholders of
the Company benefit by the many positive changes taking place at Sport
Supply. In order to maintain Sport Supply's strong momentum, it is
imperative that Sport Supply has continuity and stability in its
leadership and policies. While we appreciate the sudden strong interest
in Emerson and Sport Supply, we do not intend for Emerson and Sport
Supply to be acquired for less than their true value."
Sport Supply Group is the leading direct marketer of sporting goods
equipment to the institutional marketplace. Professional athletes and
amateur athletes in schools, colleges, universities, governmental
agencies, camps and youth organizations use the Company's products and
proprietary brands across the country.
This news release, other than the historical information, consists of
forward looking statements that involve risks and uncertainties detailed
from time to time in the Company's filings with the Securities and
Exchange Commission, including the Company's Reports on Form 10-K and
Form 10-Q. Actual results may vary materially.
