Staff prepare to sue TalentNation, in which Scottish Enterprise has £1m stake, for unpaid fees
An online business which was backed by Scottish Enterprise with £1m, as well as leading football players, may be sued by former workers for unpaid fees and salaries.
TalentNation set out to identify young sports stars and raised around £2.7m, which not only included the £1m from Scottish Enterprise, but smaller investments from a range of well known sporting figures including footballers Gary Naismith, Gary Caldwell, Kenny Miller and Scott Brown.
Based in London and Scotland, the operation is headed by Steve Sampson, a well known newspaper personality who once edited the Scottish Sun and the Sunday Scot, David Murray's ill-fated newspaper, and was a prodigy of former editor of The Sun Kelvin MacKenzie.
Up until last year the company had a team of around 20, including Craig MacKenzie, the brother of Kelvin.
However, many have now left the business, in which Scottish Enterprise has a 20% stake, claiming they have not been paid. There are reports that several of them have now joined forces to sue TalentNation as a result.
Said Craig MacKenzie, who is currently helping to set up the MailOnline in New York: “I am one of 15 people who is taking action over unpaid fees.
“TalentNation owes me about £5,200 which has been confirmed in writing by both the finance director and Steve Sampson.
“However, I am one of the fortunate ones because at least I have this in writing. Steve is an extremely engaging guy but nevertheless I want my money and then I want to move on.”
MacKenzie said the legal firm of Jeffrey Aitken in Glasgow is representing the former contractors and staff. A spokesman for the firm declined to confirm how many were involved in the action but said: “I can confirm that we are acting for clients who are pursuing claims in relation to TalentNation.”
Whilst denying that the company has run out of money, and arguing that it is poised to make a positive announcement, Steve Sampson declined to comment on the allegations when contacted by The Drum.
However he confirmed: “We have plenty of money. I have just struck a deal for a really serious six figure sum. We have the cash. We do not have a problem.
“You are putting yourself in a wrong footing with me. I have some very serious people who will be grumpy as f*** is you write about me.
“I cannot comment. I do not want to talk until we have done the deals we are doing. But when we do the deals I will be screaming my head off, because we are doing some really cracking stuff.”
Sampson has used his contacts to build the ambitious site which aims to marry the best in social networking with a safe way of allowing talented youngsters to upload sports videos of themselves in the hope of being spotted by talent scouts.
The site aims to host video footage of sports stars offering tips and advice to users across a variety of sports including football, cricket, rugby and golf.
Sports personalities were offered investment packages priced at £25,000 for half a percent, according to an early investment prospectus TalentNation issued. It read: “TalentNation is an online, on-air, in-paper proposal aimed at the generation growing up with YouTube, MySpace and Facebook.
“It has one simple ambition – to encourage all young sporting talent in the country. Whatever the scale of that talent, we will help youngsters achieve their goals.”
As part of this the site, according to the original plan, was to set up a £250,000 bursary scheme to help youngsters, 'regardless of skill.' The document claimed the site would launch in the Spring of 2009 in what would be 'the biggest media launch of the year.'
In terms of revenue the prospectus predicted sponsorship and advertising including 10,000 packages worth £199 by its third year of operation.
Unusually for a PLC, the company has not filed accounts for the past two financial years. But for the year to 31/10/08 it reported losses of £498,000.
Former staff claim that the website took longer than expected to develop, meaning the company could not generate revenue in time to support an expanding cost-base.
Said one insider, “In many ways what Steve achieved was amazing. He managed to raise almost £2.7m for a concept that only existed in the form of flat documents. But rather than focus on getting one thing right before moving on, he tried to do too much too quickly. It's a real shame as TalentNation is fundamentally a great idea.”
It is understood Sampson is undertaking steps to raise additional funding for TalentNation. In the meantime on 3 January 2011 he was appointed to the board of a new company that has been set up, Mocapmedia Limited. The only other director is his wife Elizabeth. With a registered office at 25 Daisy Street in Glasgow it is thought this business will specialise in motion capture for mobile devices.
At the time of writing Scottish Enterprise was yet to respond to The Drum's request for a comment.
UPDATE: 18/2/11
The above story was published in the current offline edition of The Drum alongside an early TalentNation investor sales document. In response Sampson emailed The Drum to say:
"I have seen your magazine. The story is inaccurate. If you post this online again I will take legal action against you. Once again you failed to contact me to get any comment from the business or seek balance."
In response The Drum invited him to detail in what way the story was inaccurate and offered him a right of reply as our readers would be very interested in what he has to say.