Collegiate Pacific Inc announced that it has purchased an additional 1.66 million, or 19%, of the outstanding shares of Sport Supply Group for approximately $9.2 million in cash — or $5.55 per share of SSPY common stock from an institutional holder. The purchase was financed under Collegiate Pacific's existing credit facility with Merrill Lynch Financial Business Services. Collegiate Pacific also announced that it and Sport Supply Group, Inc. have mutually agreed to terminate their merger agreement. The termination was approved by the Board of Directors of each company and the Special Committee of the Board of Directors of Sport Supply Group.

Adam Blumenfeld, president of Collegiate Pacific, stated: “We are excited about this increase in our SSPY holdings and the long term anticipation of increased ownership and earnings. While the merger with Sport Supply has become unlikely to close in a timely fashion under previously contemplated terms, we believe the purchase of these 1.66 million shares of Sport Supply Group common stock — at this price — which takes our ownership position to approximately 72% — will add significant value to our shareholders. The purchase price of $5.55 per share constitutes a 22% discount to both the $6.74 price paid to Emerson Radio on July 1, 2005, and the proposed $6.74 per share price contemplated in the Merger Agreement between the companies as announced on September 8, 2005.

“We believe this immediate increase in ownership, for cash, creates the opportunity for longer term earnings leverage for Collegiate Pacific; reduces potential Collegiate Pacific share dilution by more than 900,000 shares going forward, and accelerates earnings growth in future periods. Collegiate Pacific reserves the right to purchase additional shares of SSG, in public or private transactions, from time to time, as conditions merit.

“Collegiate Pacific and SSPY will continue upon their previously announced track of maximizing operating synergies and savings between the companies. This increased ownership position only heightens our enthusiasm to leverage the marketing, manufacturing, sales, and purchasing talents within our respective companies — for the benefit of all of our shareholders.

“Collegiate Pacific anticipates it will incur a one-time charge related to the termination of the Merger Agreement of approximately $500,000 in our Second Fiscal Quarter of 2006, ending December 31, 2005.”