The National Union of Journalists is to take legal advice over the collapse of Sport Media Group, owner of the Daily and Sunday Sport, after 25 journalists were made redundant with no notice.
The collapse leaves workers with no immediate income and means claims will have to be made to the Government to secure rights to statutory payments including redundancy, lost wages, notice payment and holidays, the union said.
The NUJ said it would investigate possible employment tribunal claims for its members for a protective award to compensate them for the lack of consultation surrounding the loss of their jobs.
Members at the stricken titles will be called to a meeting with union lawyers next week to assess their claim.
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The union is also calling on freelances who may be owed money to contact the NUJ so that their claims can be pursued with the administrators.
The loss of 25 journalist jobs are amongst 80 staff to have been put out of work by Sport Media Group’s fall into administration.
The company announced yesterday that it had appointed of Dermot Power and Patrick Lannagan, business-restructuring partners at BDO, as administrators to look for a buyer for assets owned by the beleaguered business.
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Their appointment follows two announcements on Friday from Sport Media Group, initially that it was suspending trade in its shares and then later that it had ceased publication of its titles as it was set to go into administration.
The NUJ said that staff at Sport Media Group were being told as late as 2pm on Friday that the papers would survive only for this to be reversed by 4pm.
Managing director Andrew Fickling told employees this week that the company had run out of money despite desperate attempts to keep it afloat.
Sport Media Group, which bought the two Sport titles in 2007 for £50m, said an “insufficient recovery” had resulted after poor sales last year, leading to crisis talks with its bank, which was about to end a six month payment holiday on its debts.
The NUJ estimated the debt own to Royal Bank of Scotland at around £11m.
In September last year, Sport Media Group said the Royal Bank of Scotland had agreed to defer its monthly loan repayment of £50,000 for a period of six months to provide its necessary working capital. That agreement is now due to end.
The deferment allowed the company to return to profit as it made an underlying pre-tax profit of £330,000 in the previous six months. However, the firm has been continually constrained by debt repayments incurred from the 2007 reverse takeover by Interactive World.
Sport Media Group was bailed out in April 2009 by former owner David Sullivan and Gold Group International who agreed to a loan of £1.68m to help restructure the business. Sullivan also took a 9.9 per cent stake.
The National Union of Journalists has called for a full investigation into the collapse of the company, which it said had been performing well in recent months.
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