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Article by DailyStocks_admin    (01-03-10 11:34 PM)

Sports Properties Acquisition Corp. CEO ANDREW MURSTEIN bought 21050 shares on 12-23-2009 at $9.94

BUSINESS OVERVIEW

We are a blank check company organized under the laws of the State of Delaware on July 3, 2007. We were formed to acquire, through a merger, capital stock exchange, asset or stock acquisition, exchangeable share transaction or other similar business combination, one or more domestic or international operating businesses. We are focusing our efforts on companies that create, produce, deliver, distribute, market content, products and services pertaining to the sports, leisure or entertainment industry. We intend to identify acquisition opportunities where we can leverage the experience and relationships of our management team and board of directors to enhance the value of the acquired company’s product and service offerings. On January 24, 2008, we consummated our initial public offering of 20,000,000 units. Each unit issued in our initial public offering consisted of one share of common stock, $.001 par value per share, and one warrant to purchase one share of common stock at $7.00 per share. The units were sold at an offering price of $10.00 per unit, generating aggregate gross proceeds of $200,000,000. Of the $200,000,000 gross proceeds, $194,000,000, including deferred underwriters’ discounts and commissions of $8,625,000, was deposited into a trust account. Prior to the initial public offering, we issued 6,000,000 warrants at a purchase price of $1.00 per warrant to certain of our founding stockholders in a private placement for aggregate proceeds of $6,000,000, which were also placed into the trust account. On February 1, 2008, we sold an additional 1,556,300 units which were subject to the overallotment option of the underwriters in our initial public offering. The sale of these units resulted in total proceeds of approximately $15,145,000, net of the underwriters’ discounts and commissions, but including deferred underwriters’ discounts and commissions of approximately $672,000. This amount was also deposited into the trust account, resulting in a total amount held in trust of approximately $215,145,000, exclusive of any interest earned by such trust account.

We believe the demand for sports, leisure and entertainment related content, services and products presents attractive opportunities for growth and value creation. This demand is supported by highly visible revenue streams resulting from, among other things, advanced ticketing, media, sponsor, advertising and concession activities, many of which constitute contractually obligated income, as evidenced by multi-year, fixed or escalating licensing agreements, some of which can be structured for twenty (20) or more years. In addition, the branded aspects of the sports, leisure and entertainment industries can attract a loyal customer base and bring with them less volatility and more sustainable, long-term growth attributes. The sports, leisure and entertainment industries are large and complex and include companies that create, produce, deliver, distribute, market content, products and services, including:


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existing or new sports franchises and teams involved in the major sports leagues in the United States (NFL, NBA, MLB and NHL, as well as NASCAR) and other leagues organized around professional and amateur sports;


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existing or new sports leagues;


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ownership and operation of sports-related facilities and venues;


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stadium and venue construction and management companies;


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professional services, including event and facility management, concession and ticket sale management, talent representation, sponsorship, endorsements, consulting and marketing, travel and tour management;


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entertainment-related licensed programming, other programming, publications, Internet services, data and information;


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sports-related advertising and marketing services;


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sporting goods, apparel and related products, including licensed goods (licensed by leagues or teams) or manufactured goods;


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internet-related sports content, including fantasy sports leagues;

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interactive sports, entertainment and gaming companies;


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recreation or tourism-related companies; and


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investment in the expansion of the major and other sports leagues into international markets including China and Japan.

We are directing our efforts on identifying companies for potential acquisition that include at least one of the following characteristics:


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an underperforming business that we believe could increase its performance with changes in operations or strategy, incremental investment or management expertise;


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an undercapitalized business;


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a business serving sports, leisure or entertainment properties or a sports, leisure or entertainment property that may be better served by our management’s extensive industry contacts; or


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a business that currently is capitalizing or has the potential to capitalize on growth internationally in sports activities and consumption.

We are utilizing the collective experience and expertise of our management team, board of directors and advisors to identify potential target acquisitions in these areas. We intend to use a disciplined approach to identifying, evaluating, and negotiating with potential target businesses and are focusing our efforts on selecting what we believe is the best opportunity or opportunities for a business combination. Assuming we complete our initial business combination, we may pursue additional business combinations to, among other objectives, penetrate complementary markets, drive sales growth or introduce new products.

To date, our efforts have been limited to organizational activities, activities related to raising capital and since our initial public offering, activities relating to identifying and evaluating prospective acquisition targets. If we are unable to consummate a business combination on or prior to January 17, 2010, we will liquidate our trust account and any other assets to our public stockholders. While we may seek to effect business transactions with more than one target acquisition, our business combination must be with a target acquisition (or acquisitions) whose fair market value is at least equal to 80% of our net assets held in trust (net of taxes and amounts disbursed for working capital purposes and excluding the amount held in the trust account representing a portion of the underwriters’ discount) at the time of such acquisition. Consequently, initially we may have the ability to complete only a single business combination, although this may entail our acquisition of one or more individual assets, properties or entities.

In the event we ultimately determine to simultaneously acquire several assets or properties and such assets or properties are owned by different sellers, we may need for each of such sellers to agree that our purchase is contingent on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple acquisitions, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent integration of the multiple assets or properties into a single operating entity.

To the extent that our business combination is structured as an asset acquisition, it is possible that the proxy statement that we would send to stockholders to approve a business combination would not contain audited or unaudited historical financial information with respect to the assets being acquired and, therefore, stockholders voting on a proposed transaction would not have the benefit of financial statements of past operations. We are unable to predict the facts, circumstances and structure surrounding any possible future acquisition of assets and, accordingly, cannot provide assurances with respect to the provision of audited historical financial information. If, however, we determined that such audited historical financial information was not required, instead of audited or unaudited historical financial statements, the proxy statement we would send to our stockholders would contain the same information that would typically be provided in the business section of the prospectus for an initial public offering of a start-up company without historical financial statements, such as: (i) historical and prevailing market rates for assets of that type; (ii) our expectations of future market trends and proposed strategy for employment of the assets; (iii) our anticipated operational (overhead) expenses; and (iv) the valuation of the assets generally, all of which, in turn, depend on the sector of the sports, leisure or entertainment industry in which we consummate such a business combination. See “Risk Factors — Risks Related to the Sports, Leisure and Entertainment Industries — If we were to structure our business combination as an asset acquisition, it is possible that proxy materials provided to our stockholders would not include historical financial statements and, accordingly, investors will not have historical financial statements on which to rely in making their decision whether to vote for the acquisition.”

The fair market value of a target acquisition will be determined by our board of directors based upon the financial standards generally accepted by the financial community, such as actual and potential sales, earnings and cash flow and book value. We anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business. We may, however, structure a business combination to acquire less than 100% of such interests or assets of the target business but do not intend to acquire less than a majority interest (less than 50% of the voting securities of such target business). If we acquire only a majority interest of a target business or businesses, the interest in the business that we acquire must have a fair market value of at least 80% of our net assets held in trust (net of taxes and amounts permitted to be disbursed for working capital purposes and excluding the amount held in the trust account representing the underwriters’ deferred discount). In such case that we acquire less than a 100% ownership interest, the remaining ownership interest may be held by third parties who may or may not have been involved with the properties, assets or entities prior to our acquisition of such ownership interest. We may further seek to acquire a target acquisition that has a fair market value significantly in excess of 80% of our net assets held in trust (net of taxes and amounts disbursed for working capital purposes and excluding the amount held in the trust account representing a portion of the underwriters’ discount). In order to do so, we may seek to raise additional funds through a private offering of debt or equity securities, and we may effect a business combination using the proceeds of such offering rather than using the amounts held in the trust account. In the case of a business combination funded with assets other than the trust assets, the proxy materials disclosing the business combination for which we would seek stockholder approval would disclose the terms of the financing as well and, if required by law or by regulation of the American Stock Exchange, we would seek stockholder approval of such financing. In the absence of a requirement by law or a regulation of the American Stock Exchange (for example, if such financing involves the issuance of common stock or securities convertible into common stock which could result in an increase in our outstanding common stock of 20% or more), we would not seek separate stockholder approval of such financing since the financing portion of any business combination would be disclosed in the proxy materials and would be a consideration of the stockholder approval process for the business combination under consideration. There are no prohibitions on our ability to raise funds privately or through loans that would allow us to acquire a company with a fair market value in an amount greater than 80% of our net assets held in trust at the time of the acquisition. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.

Conflicts

The discretion of our officers and directors, some of whom are also officers and/or directors of other companies, in identifying and selecting a suitable target acquisition, may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest.

Whether or not any member of our management team remains with our company following our consummation of a business combination depends on whether or not each person is offered a management role with the resulting company in connection with the negotiation of the business combination. As a result, our officers and directors may also face a conflict of interest when the composition of the team that will manage the company after consummation of a business combination is negotiated. Nevertheless, our management’s ability to remain with the company following consummation of a business combination will not be the determining factor in our decision whether or not to proceed with any particular potential business combination.

Industry Trends

According to PricewaterhouseCoopers LLP (“PwC”), the global sports, entertainment and leisure markets will, on a combined basis, be an approximately $395.5 billion market in 2008, and grow at a 6.7% compound annual growth rate (“CAGR”) through 2012 (PricewaterhouseCoopers LLP, “Global Entertainment and Media Outlook: 2008-2012,” June 2008). These addressable markets include revenues from the following sectors: sports, filmed entertainment, video games, theme parks and amusement parks, casino and other regulated gambling. Further, PwC estimates the U.S. sports, entertainment and leisure markets (defined to encompass the same categories previously mentioned) to be $178.5 billion in 2008, growing at a 5.3% CAGR. Key drivers of growth in entertainment spending include availability of content across multiple platforms, continued penetration of broadband and wireless, growth in the 18-to 49-year old demographic segment and sustained economic growth.

Specifically as it relates to the sports industry, the total global sports market, according to PwC, will be an approximately $114 billion market in 2008, and grow at a 6.5% CAGR through 2012, which includes revenues derived from gate receipts for live sporting events, rights fees paid by radio and television broadcasters and networks, merchandising, sponsorships and rights fees associated with Internet, mobile, satellite and other sports events. Further, PwC estimates the U.S. sports industry (defined to encompass the same categories previously mentioned) to be an approximately $56 billion market in 2008, growing at a 6.1% CAGR through 2012. Key drivers of growth in this industry include increased attendance, competition in the media distribution market, which is fueling the demand for TV rights fees and leading to record-sized deals, as well as competition for sponsorship deals for venue and event naming rights. Also, global-scale large sporting events such as the FIFA World Cup in South Africa in 2010 and the 2010 winter Olympics in Vancouver are expected to drive large, cyclical revenue growth.

According to research performed by IBISWorld Inc. (“IBIS”), the U.S. spectator sports market alone in 2005 was a $29 billion market, encompassing sports teams, events and establishments, and all of the operations of sporting facilities, teams and events. (IBISWorld Inc., “Spectator Sports in the U.S.: 71121,” July 13, 2006) Further, IBIS estimates the spectator sports market will grow at a compound annual rate of approximately 5.7% from 2006 to 2010.

According to IBIS research, event promotion (including the promotion of performing arts, sports and similar events) in the U.S. is expected to generate revenue of $8.1 billion in 2007 and grow at a 4.5% CAGR through 2012. (IBISWorld Inc., “Promoters of Performing Arts, Sports and Similar Events with Facilities in the U.S.: 71131,” July 25, 2007) This growth will be driven by positive consumer and business sentiments, increased event attendance and purchase of merchandise by consumers, and increased corporate advertising.

Management anticipates continued growth and opportunities for value creation to result from several trends, including:


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Significant demand for sports-related franchises. There has been a continuing increase in attendance at sports and entertainment events, and many cities have expressed interest in having sports teams, including Las Vegas, Houston, Rochester, Orlando, Portland, Los Angeles, Oklahoma City, Kansas City, Hartford, Winnipeg and Seattle. A significant opportunity exists to establish new franchises, or relocate existing franchises. Members of our management team have prior experience in successfully acquiring, relocating and enhancing operations of franchises.


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Significant growth for entertainment and leisure. There continues to be a long term increase in consumer-end spending on entertainment and leisure. Key drivers of growth include demand for high-definition DVDs, penetration of online DVD rental services, and growing consumer acceptance of broadband and wireless gaming distribution channels.


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Vertical integration of media relationships have become opportunities for sports teams to enjoy the benefits of additional revenue streams; teams can earn both cable affiliate fees and advertising by setting up their own local or regional sports networks;


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The emergence of mobile and other new media, including sports websites, sports satellite radio, and increased usage of mobile media, which are expected to provide access to a broader range of content globally and grow in excess of traditional media growth rates;


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New facility construction is a way to drive team profits by optimizing revenue and attendance. Studies have shown that teams playing in brand new stadiums realize an increase in franchise value. Excluding college and minor league stadiums and arenas, a total of 26 professional sports facilities were opened between 2000 and 2006. New stadiums for professional baseball teams have been built to maximize revenue by decreasing capacity and installing an optimized mix of general and premium (i.e., club seats and luxury suites) seating. New stadium facilities also offer considerably more advertising and sponsorship opportunities;


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International growth is expected to exceed growth in the U.S. market , driven by globalization, increased international access to U.S. professional sports through the Internet and satellite television content, increased participation of international players in U.S. professional sports teams, the exhibition of sports contests involving U.S. teams in Europe and the Pacific Rim and the location of professional sports franchises outside the U.S.

We believe that in this environment, our management team, senior advisors and board of directors will be able to leverage their extensive industry experience, knowledge and contacts to source and execute an acquisition.

Our Competitive Advantages

We believe that we possess several competitive strengths to source, evaluate and execute business combinations in our target sectors. We believe that the background, operating histories and experience of our management team, board of directors and advisors have equipped us not only to obtain access to a broad spectrum of investment opportunities but also to improve upon the operational and financial performance of our target businesses. However, no guarantee can be given that our management, board of directors and advisors will be able to achieve results that are similar to the prior results described below, and investors should not place undue reliance upon past performance as indications of future performance.

Significant operating and negotiating experience

Our management team, board of directors and advisors bring extensive experience with operations, acquisitions, negotiations with leagues, owners, players and other employees of sports-related properties.


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Tony Tavares, President and CEO, has successfully negotiated the acquisition and sale of, and implemented operational improvements to, several professional sports franchises, including The Mighty Ducks of Anaheim and The Washington Nationals. Additionally, Mr. Tavares served as the President and CEO of S.M.G., the premier management company engaged in the private management of stadiums, arenas, theaters and convention facilities in the United States, Europe and the Pacific Rim.


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Jack Kemp, Chairman, served as a member of the United States Congress for 18 years following 13 years as a quarterback in the National Football League.


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Henry Aaron, Director, is a member of the Major League Baseball Hall of Fame and Senior Vice President of the Atlanta Braves.


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Messrs. Caporale and Vataha, Advisors, are co-founders and co-owners of Game Plan LLC, the first and oldest sports only investment bank in the U.S., since 1995 and have represented numerous sports leagues and franchises in a variety of transactions.

Established deal sourcing and relationship network

We believe management, our board of directors and our advisors’ current positions, experience in the target industries and network of industry contacts will assist in providing access to opportunities for a potential initial business acquisition. These contacts and sources include executives of, and consultants engaged by, public and private businesses in our target sector, key decision makers of leagues, local government officials and business leaders, investment banks, attorneys, and accountants, among others, with knowledge of these industries. Our management team has developed long-standing market relationships throughout the sports, leisure and entertainment industries that will also help us to attract high quality talent as well as to identify and evaluate acquisition opportunities.

Operational, financial, acquisition and negotiating expertise

Our management team has extensive experience in the acquisition, restructuring, relocation and operation of sports related businesses. In addition, our board of directors brings additional relationships and experience to provide access to key decision makers and sources of opportunity. We believe this will enable us to successfully target and negotiate acquisitions, as well as enhance the value of an acquisition by enhancing operations, relocating, or pursing other ancillary revenue opportunities.

Attractive market opportunities

Although we have not yet identified any specific business combination candidates, we believe there are numerous candidates within the sports, leisure or entertainment industry that present opportunities for acquisition and value enhancement by our management team. Further, we believe there will be incremental opportunities to reposition acquired companies through relocation or restructuring, addition of ancillary products or services, monetization of undervalued assets, or addition of complementary operations through additional acquisitions.

Corporate Finance and Transactional Expertise

We believe that, given our management, board of directors and advisors’ transactional experience and network of contacts within both the target industries and financial community, our team has the ability to identify, source, negotiate, structure, and consummate strategic investments of various types, including business combinations, “add-on” acquisitions and other strategic arrangements. Collectively, management and our directors and advisors have been involved in numerous transactions ranging in size from several million dollars to several billion dollars.

However, the results of the prior business ventures of our officers, directors and advisors are not necessarily indicative of our company’s future performance or results.

Effecting a Business Combination

General

We were formed to acquire, through a merger, capital stock exchange, asset or stock acquisition, exchangeable share transaction or other similar business combination, one or more businesses in the sports, leisure or entertainment industries. We are not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period until we complete a business combination. We intend to utilize cash derived from the proceeds of our initial public offering and the private placements, our capital stock, debt or a combination of these in effecting a business combination. Although substantially all of the net proceeds of our initial public offering and private placements are intended to be applied generally toward effecting a business combination as described herein, the proceeds are not otherwise being designated for any more specific purposes. Accordingly, investors in our units are investing without first having an opportunity to evaluate the specific merits or risks of any one or more business combinations.

Subject to the requirement that our business combination must be with a target acquisition having a fair market value that is at least 80% of our net assets held in trust (net of taxes and amounts disbursed for working capital purposes and excluding the amount held in the trust account representing a portion of the underwriters’ discount) at the time of such acquisition, there are no limitations on the type of sports-related investments (including investments in securities of entities that own or finance sports-related activities) we can make or the percentage of our total assets that may be invested in any one investment. Accordingly, other than the requirement that our business combination must be with a target acquisition having a fair market value that is at least 80% of our net assets held in trust (net of taxes and amounts disbursed for working capital purposes and excluding the amount held in the trust account representing a portion of the underwriters’ discount) at the time of such acquisition, our investment policies may be changed from time to time at the discretion of our board of directors, without a vote of our stockholders. Additionally, no limits have been set on the concentration of investments (including investments in securities of entities that own or finance sports-related activities) in any location or product type.

We have not identified a target acquisition

We began our search for target business candidates following our initial public offering. To date, however we have not selected any target acquisition on which to concentrate our search for a business combination. We cannot assure you that we will be able to locate a target acquisition or that we will be able to engage in a business combination on favorable terms.

Subject to the limitation that a target acquisition have a fair market value of at least 80% of our net assets held in trust (net of taxes and amounts disbursed for working capital purposes and excluding the amount held in the trust account representing a portion of the underwriters’ discount) at the time of the transaction, as described below in more detail, we will have virtually unrestricted flexibility in identifying and selecting a prospective transaction candidate. Accordingly, there is no basis for investors in our units to evaluate the possible merits or risks of any target acquisition with which we may ultimately complete a business combination. To the extent we effect a business combination with a financially unstable asset or property, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of such financially unstable property or asset. Although our management will endeavor to evaluate the risks inherent in a particular target acquisition, we cannot assure you that we will properly ascertain or assess all significant risk factors.

Sources of target acquisition

While we have not yet identified any candidates for a business combination, we believe that there are numerous acquisition candidates in the sports, leisure and entertainment industries that we intend to target. Target acquisitions will be brought to our attention by our officers, directors and advisors, through their network of industry relationships located in the United States and elsewhere that regularly, in the course of their daily business activities, see numerous varied opportunities. Nevertheless, we will not propose any business combination with any potential target business to our stockholders if any of our officers, directors, advisors or founding stockholders is an affiliate of such potential target business, or if such potential target business has received a material investment from any of these individuals or entities. Target acquisitions may also be brought to our attention by such unaffiliated sources such as brokers or others as a result of being solicited by us through calls or mailings. Unaffiliated sources, such as brokers may also introduce us to target acquisitions they think we may be interested in on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. We pay Medallion Financial Corp. a fee of $7,500 per month for office space and administrative services. Our Chief Executive Officer, Tony Tavares, is the President and Chief Executive Officer of ProEminent Sports, LLC. Pursuant to a consulting agreement between ProEminent Sports, LLC and Medallion, Mr. Tavares acts as a consultant to Medallion for sports related investments and, included within the scope of his duties is his service to us. Pursuant to the consulting agreement, Mr. Tavares has, among other things, agreed to serve as our Chief Executive Officer, help us identify a target business in the sports, entertainment and leisure industries, perform due diligence on the proposed target and negotiate and consummate a business combination with such a target business. Our advisors, Robert Caporale and Randel Vataha, are Chairman and President, respectively, and each own 50% of the membership interests, of Game Plan LLC. Medallion was previously party to an agreement with Game Plan LLC pursuant to which Game Plan LLC provided certain consulting services to Medallion and to us, including advising us in identifying a target business in the sports, entertainment and leisure industries. Under such agreement, Mr. Caporale and Mr. Vataha agreed to help us identify a target business in the sports, entertainment and leisure industries, and agreed to help us perform due diligence on the proposed target and negotiate and consummate a business combination with such a target business. The fees paid by Medallion pursuant to the consulting agreements were solely borne by Medallion and were not reimbursed by us. In June 2008 we engaged Game Plan LLC to provide consulting services to us in connection with identifying a target business in the sports, entertainment and leisure industries and consummating a business combination with such a target business. In June 2008 we also entered into an agreement with Graidan Ventures LLC whereby Graidan Ventures LLC has agreed to help us identify a target business in the sports, entertainment and leisure industries. Medallion is a party to an additional agreement with Graidan Ventures LLC pursuant to which Graidan Ventures LLC provides certain consulting services to Medallion. Our Vice Chairman and Secretary, Andrew M. Murstein, also serves as the President and member of the Board of Directors of Medallion. Our Chief Financial Officer, Larry D. Hall, also serves as the Chief Financial Officer of Medallion. Other than the fees under these agreements and the compensation paid by Medallion to these officers and advisors, in no event will any of our existing officers, directors or stockholders or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they render, in order to effectuate the consummation of a business combination. However, our key personnel may not continue to provide services to us after the consummation of a business combination if we are unable to negotiate employment or consulting agreements with them in connection with or subsequent to the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the consummation of the business combination. Additionally, after a business combination, such individuals may be paid consulting, management or other fees from target businesses, with any and all amounts being fully disclosed to stockholders, to the extent known, in the proxy solicitation materials furnished to the stockholders. Any such compensation to be paid to our officers, directors or founding stockholders after a business combination may influence their evaluation of a potential business combination, resulting in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest. While the personal and financial interests of such individuals may influence their motivation in identifying and selecting a target acquisition, the ability of such individuals to remain with us after the consummation of a business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination.

Selection of a target acquisition and structuring of a business combination

Subject to the requirement that our business combination must be with a target acquisition having a fair market value that is at least 80% of our net assets held in trust (net of taxes and amounts disbursed for working capital purposes and excluding the amount held in the trust account representing a portion of the underwriters’ discount) at the time of such acquisition, our management will have virtually unrestricted flexibility in identifying and selecting prospective target acquisitions. We have not established any other specific attributes or criteria (financial or otherwise) for prospective target acquisitions. In evaluating a prospective target acquisition, our management will consider, among other factors, the following factors likely to affect the performance of the investment:


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earnings and growth potential;


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experience and skill of management and availability of additional personnel;


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capital requirements;


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competitive position;


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financial condition and results of operation;


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barriers to entry into the sports, leisure and entertainment industries;


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stage of development of the products, processes or services;


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breadth of services offered;


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degree of current or potential market acceptance of the services;


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regulatory environment of the industry; and


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costs associated with effecting the business combination.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target acquisition, we will conduct an extensive due diligence review which will encompass, among other things, a review of all relevant financial and other information which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, although we have no current intention to engage any such third parties. We will also seek to have all owners of any prospective target acquisition execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. If any prospective business or owner refused to execute such agreement, it is unlikely we would continue negotiations with such business or owner.

MANAGEMENT DISCUSSION FROM LATEST 10K

Overview

We are a blank check company organized under the laws of the State of Delaware on July 3, 2007. We were formed to acquire, through a merger, capital stock exchange, asset or stock acquisition, exchangeable share transaction or other similar business combination, one or more businesses in the sports, leisure or entertainment industries. We intend to utilize cash derived from the proceeds of our initial public offering, our capital stock, debt, or a combination of cash, capital stock and debt, in effecting a business combination. The issuance of additional shares of our capital stock:


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may significantly reduce the equity interest of our stockholders;

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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to the holders of our common stock;


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will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and


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may adversely affect prevailing market prices for our common stock.

Similarly, if we incur substantial debt, it could result in:


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default and foreclosure on our assets if our operating cash flow after a business combination is insufficient to pay our debt obligations;


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acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that require the maintenance of certain financial ratios or reserves and any such covenant is breached without a waiver or renegotiation of that covenant;


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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;


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covenants that limit our ability to acquire capital assets or make additional acquisitions;


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our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding;


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our inability to pay dividends on our common stock;


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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock, working capital, capital expenditures, acquisitions and other general corporate purposes;


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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;


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our stockholders receiving less than $10.00 per share from the trust account upon liquidation if such debt is incurred prior to consummation of a business combination and the trust account is subsequently liquidated;


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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and


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limitations on our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes; and other disadvantages compared to our competitors who have less debt.

Results of Operations and Liquidity

The following discussion should be read in conjunction with our financial statements and the notes to those statements and other financial information appearing elsewhere in this report.

Our entire activity since inception has been limited to organizational activities, activities relating to our initial public offering and, since our initial public offering, activities relating to identifying and evaluating prospective acquisition targets. We have neither engaged in any operations nor generated any revenues to date, other than interest income earned on the proceeds of our initial public offering.

For the year ended December 31, 2008, interest income on the trust account amounted to $3,665,545. Our operating expenses during 2008 were $1,558,532, consisting of professional fees of $872,620 for costs primarily associated with identifying and negotiating with potential acquisition targets, legal expenses paid to a related party of $72,206 for costs primarily associated with identifying and negotiating with potential acquisition targets, franchise tax expense of $158,509, insurance expense of $104,927, administrative fees paid to Medallion of $86,250, and other organizational costs and operating expenses of $264,020, primarily relating to travel-related costs associated with due diligence activities and personnel-related costs. We provided income taxes of $945,686 for 2008, resulting in net income of $1,161,327 or $0.05 per share for the year ended December 31, 2008.

On January 24, 2008, we consummated our initial public offering of 20,000,000 units. Each unit issued in our initial public offering consists of one share of common stock, $.001 par value per share, and one warrant to purchase one share of common stock at $7.00 per share. The units were sold at an offering price of $10.00 per unit, generating aggregate gross proceeds of $200,000,000. Of the $200,000,000 gross proceeds, $194,000,000, including deferred underwriters’ discounts and commissions of $8,625,000, was deposited into a trust account. Prior to the initial public offering, we issued 6,000,000 warrants at a purchase price of $1.00 per warrant to certain of our founding stockholders in a private placement for aggregate proceeds of $6,000,000, which were also placed into the trust account. On February 1, 2008 we sold an additional 1,556,300 units which were subject to the overallotment option of the underwriters in our initial public offering. The sale of these units resulted in total proceeds of approximately $15,144,744, net of the underwriters’ discounts and commissions, but including deferred underwriters’ discounts and commissions of approximately $671,154. This amount was also deposited into the trust account, resulting in a total amount held in trust of approximately $215,144,744, exclusive of any interest earned by such trust account.

The funds held in the Trust Account are currently invested in money market funds meeting the criteria under Rule 2a-7 under the 1940 Act. We also have the option to invest the funds in Treasury Bills issued by the United States government having a maturity of 180 days or less. Interest earned will be applied in the following order of priority:


•

payment of taxes on Trust Account interest;


•

our working capital requirements before we complete a business combination, to a maximum of $2,250,000, and, if necessary, funding up to $50,000 of the costs of our potential dissolution and liquidation; and


•

the balance, if any, to us if we complete a business combination or to our public stockholders if we do not complete a business combination.

We believe that the interest earned on Trust Account funds in the period before we effect a business combination will be sufficient to fund our operations and costs relating to the acquisition of a target business or to fund the costs and expenses relating to our liquidation and dissolution if we do not consummate a business combination.

We expect to use substantially all of the net proceeds of our initial public offering and the private placement to acquire a target business, including payment of expenses we incur in identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that we use debt or equity securities as consideration in a business combination and do not use all of the funds in the trust account, we will use the remaining trust account funds to finance the operations of the target business. We believe that the $2,250,000 that we drew from interest earned on the trust account will be sufficient to allow us to operate until at least January 17, 2010, even if we do not complete a business combination during that time.

The credit markets are undergoing a crisis which has disrupted a wide range of traditional financing sources. The crisis has made it increasingly difficult and significantly more expensive through higher credit spreads for companies to obtain and renew financing. Continued turmoil in the credit markets could limit our access to funds and could have a negative impact on our ability to complete a business combination.

Critical Accounting Policies

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Contractual Obligations

We did not have any long term debt, capital lease obligations, operating lease obligations, purchase obligations or other long term liabilities. Following the end of our fiscal year, on January 17, 2008, we entered into a services agreement with Medallion Financial Corp. requiring us to pay $7,500 per month. The agreement terminates on the earlier of the completion of a business combination or upon our dissolution. In June 2008 we entered into a consulting agreement with Game Plan LLC whereby Game Plan LLC has agreed to provide consulting services to us in connection with identifying a target business in the sports, entertainment and leisure industries and consummating a business combination with such a target business. The agreement continues on a month to month basis until terminated under the terms of the agreement. In June 2008 we also entered into a consulting agreement with Graidan Ventures LLC whereby Graidan Ventures LLC has agreed to help us identify a target business in the sports, entertainment and leisure. The agreement has an initial term of eight months with additional successive terms of three months until terminated under the terms of the agreement.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

Overview

We are a blank check company organized under the laws of the State of Delaware on July 3, 2007. We were formed to acquire, through a merger, capital stock exchange, asset or stock acquisition, exchangeable share transaction or other similar business combination, one or more businesses in the sports, leisure or entertainment industries. We intend to utilize cash derived from the proceeds of our initial public offering, our capital stock, debt, or a combination of cash, capital stock and debt, in effecting a business combination. The issuance of additional shares of our capital stock:


•

may significantly reduce the equity interest of our stockholders;


•

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to the holders of our common stock;


•

will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and


•

may adversely affect prevailing market prices for our common stock.

Similarly, if we incur substantial debt, it could result in:


•

default and foreclosure on our assets if our operating cash flow after a business combination is insufficient to pay our debt obligations;

•

acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that require the maintenance of certain financial ratios or reserves and any such covenant is breached without a waiver or renegotiation of that covenant;


•

our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;


•

covenants that limit our ability to acquire capital assets or make additional acquisitions;


•

our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding;


•

our inability to pay dividends on our common stock;


•

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock, working capital, capital expenditures, acquisitions and other general corporate purposes;


•

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;


•

our stockholders receiving less than $10.00 per share from the trust account upon liquidation if such debt is incurred prior to consummation of a business combination and the trust account is subsequently liquidated;


•

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and


•

limitations on our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes; and other disadvantages compared to our competitors who have less debt.

Results of Operations and Liquidity

The following discussion should be read in conjunction with our financial statements and the notes to those statements and other financial information appearing elsewhere in this report.

Our entire activity since inception has been limited to organizational activities, activities relating to our initial public offering and, since our initial public offering, activities relating to identifying and evaluating prospective acquisition targets. We have neither engaged in any operations nor generated any revenues to date, other than interest income earned on the proceeds of our initial public offering.

Interest income on the trust account was $42,606 and $125,715 for the 2009 third quarter and nine months, compared to $844,854 and $3,301,973 for the comparable 2008 periods, reflecting the changes in rates earned on the Trust investments. Operating expenses were $967,837 and $2,619,431 for the 2009 periods, compared to $646,549 and $798,798 for 2008, primarily reflecting the costs with identifying and negotiating with potential acquisition targets. The increase reflects the level of activity during the current year, compared to the Company’s initiation and commencement of these activities during 2008. Income tax benefits of $140,612 and $673,897 were provided during 2009, compared to tax provisions of $83,833 and $1,124,089 for 2008. As a result of the above, the Company had net losses of $784,619 or $0.03 per share and $1,819,819 or $0.07 per share for the 2009 third quarter and nine months, compared to net income of $114,472 or $0.00 per share and $1,379,086 or $0.05 per share for the comparable 2008 periods.

On January 24, 2008, we consummated our initial public offering of 20,000,000 units. Each unit issued in our initial public offering consists of one share of common stock, $.001 par value per share, and one warrant to purchase one share of common stock at $7.00 per share. The units were sold at an offering price of $10.00 per unit, generating aggregate gross proceeds of $200,000,000. Of the $200,000,000 gross proceeds, $194,000,000, including deferred underwriters’ discounts and commissions of $8,625,000, was deposited into a trust account. Prior to the initial public offering, we issued 6,000,000 warrants at a purchase price of $1.00 per warrant to certain of our founding stockholders in a private placement for aggregate proceeds of $6,000,000, which were also placed into the trust account. On February 1, 2008 we sold an additional 1,556,300 units which were subject to the overallotment option of the underwriters in our initial public offering. The sale of these units resulted in total proceeds of approximately $15,144,744, net of the underwriters’ discounts and commissions, but including deferred underwriters’ discounts and commissions of approximately $671,154. This amount was also deposited into the trust account, resulting in a total amount held in trust of approximately $215,144,744, exclusive of any interest earned by such trust account.

The funds held in the Trust Account are currently invested in money market funds meeting the criteria under Rule 2a-7 under the 1940 Act. We also have the option to invest the funds in Treasury Bills issued by the United States government having a maturity of 180 days or less. Interest earned will be applied in the following order of priority:


•

payment of taxes on Trust Account interest;


•

our working capital requirements before we complete a business combination, to a maximum of $2,250,000, and, if necessary, funding up to $50,000 of the costs of our potential dissolution and liquidation; and •

the balance, if any, to us if we complete a business combination or to our public stockholders if we do not complete a business combination.

We believed that the interest earned on Trust Account funds in the period before we consummated a business combination would be sufficient to fund our operations and costs relating to the acquisition of a target business or to fund the costs and expenses relating to our liquidation and dissolution if we did not consummate a business combination. However, at September 30, 2009, the Company’s liabilities exceeded its cash on hand by $699,000, and in addition, the Company owed Medallion $85,000. If the Company does not consummate a business combination, its intention is to negotiate these liabilities downwards, seeking forbearance from those associated with a failed deal. However, since the results of such negotiations cannot be anticipated, Medallion has accrued $200,000 to cover the Company’s shortfall. Additionally, it is anticipated that Medallion will continue to fund any operating cash shortfall until such time as the Company is liquidated or a business combination is consummated. In the latter occurrence, it is further anticipated that Medallion will be fully reimbursed from the operating cash of the newly formed successor entity.

We will not have sufficient available funds (outside of the Trust Account) to operate through January 17, 2010, or to pursue potential target acquisitions without needing to raise additional funds from our initial stockholders, sponsor, officers, directors or other available sources. We have no commitments for such borrowings at this time and there is no assurance that we will be able to raise additional funds needed to meet the expenditures required for operating our business through January 17, 2010.

We expect to use substantially all of the net proceeds of our initial public offering and the private placement to acquire a target business, including payment of expenses we incur in identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that we use debt or equity securities as consideration in a business combination and do not use all of the funds in the trust account, we will use the remaining trust account funds to finance the operations of the target business.

The credit markets are undergoing a crisis which has disrupted a wide range of traditional financing sources. The crisis has made it increasingly difficult and significantly more expensive through higher credit spreads for companies to obtain and renew financing. Continued turmoil in the credit markets could limit our access to funds and could have a negative impact on our ability to complete a business combination.

Critical Accounting Policies

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Contractual Obligations

We did not have any long term debt, capital lease obligations, operating lease obligations, purchase obligations or other long term liabilities. On January 17, 2008, we entered into a services agreement with Medallion Financial Corp. requiring us to pay $7,500 per month. The agreement terminates on the earlier of the completion of a business combination or upon our dissolution. In June 2008 we entered into a consulting agreement with Game Plan LLC whereby Game Plan LLC has agreed to provide consulting services to us in connection with identifying a target business in the sports, entertainment and leisure industries and consummating a business combination with such a target business. The agreement continues on a month to month basis until terminated under the terms of the agreement. In June 2008 we also entered into a consulting agreement with Graidan Ventures LLC whereby Graidan Ventures LLC has agreed to help us identify a target business in the sports, entertainment and leisure. The agreement has an initial term of eight months with additional successive terms of three months until terminated under the terms of the agreement.

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