Sports Finance Report: AC Milan Owner Reportedly Bankrupt, Ordered to Auction off Assets

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AC Milan Owner Reportedly Bankrupt, Ordered to Auction off Assets

AC Milan owner Yonghong Li is reportedly bankrupt, initiating concerns about the solvency of the team’s ownership group and the status of the team’s star players. Li took out a high-interest loan to purchase the Serie A club from former Italian Prime Minister Silvio Berlusconi, a loan that he could only repay if the team were to return to the Champions League (for the first time since ’12). Currently residing in 7^th place (just the Top 4 qualify) and unable to refinance the loan, the club may now be forced to sell off its star players to make loan payments. Reports indicate Li’s assets will be auctioned off on Taobao (BABA subsidiary), with decisions regarding the club’s future will likely be postponed until that occurs. It is unclear if AC Milan will even be considered among Li’s assets; the club is technically owned by Sino-Europe Sports, a holding company that Li maintains a stake in. It must be noted that Li has dismissed reports that he’s insolvent as “fake news.”

Howie Long-Short: Li (as part of a Chinese consortium) acquired the club in April ’17 for $911 million, with the help of a +/-$500 million high-interest loan from Elliott Management and +/-$400 million in off-shore assets; allowing him to take control of the franchise for less than $150 million in cash. For comparison purposes, NFL majority owners must pay at least 30% of the team’s purchase price (+/- $1 billion).

Fan Marino: If you think a U.S. professional sports franchise would never be sold to a prospective owner without the fiscal resources to support team operations, think again. In 1996, John Spano took controlling ownership (for 4 months) of the New York Islanders; acquiring the floundering franchise for $165 million. Spano, worth just several hundred thousand dollars at the time, convinced a series of banks (and league execs) that he had $230 million in assets to his name; enabling him to pull off the fraud. ESPN did a 30 for 30 called “Big Shot” on the story. It’s a must watch, here’s the trailer.

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Sling TV Now Offering NBA League Pass, Team Pass

Sling TV has added NBA League Pass, providing subscribers with the option to add live out-of-market games to their streaming package; the first multi-channel OTT service to offer the add-on package for basketball junkies. For an additional $29/mo. Sling Orange, Sling Blue and Sling International subscribers can add NBA League Pass to their existing subscription, gaining access to an additional +/- 1,000 live game broadcasts. In the coming weeks, those looking for a cheaper alternative will have the option of adding Team Pass for $18/mo.; though, that package only provides access to out-of-market games for a single NBA franchise, of the subscriber’s choice.

Howie Long-Short: Sling TV is a subsidiary of Dish Network (DISH). Earlier this week, as part of the company’s Q4 ’17 financial report, DISH disclosed the number of Sling TV subscribers (2.212 million) for the first time (previously counted them with DISH TV subs). For full year 2017, total revenue declined 5.4% (to $14.39 billion). Net income grew $600,000, but only because of the $1.2 billion (one-time) tax benefit that the company received from recent tax reform legislation.

Fan Marino: No NBA games were scheduled Monday-Wednesday this week, giving the league’s stars a chance to rest after All-Star weekend; but, it’s been anything but a quiet week for Mark Cuban the Dallas Mavericks. On Tuesday, Sports Illustrated published an expose highlighting the “Corrosive Workplace Culture” (see: sexual harassment, domestic violence etc.) within the Mavericks organization. On Wednesday, the league fined the Mavericks’ owner $600,000 for suggesting that losing (or tanking) was in his team’s best interests. It’s been a quick fall from grace for a guy that had been mentioned as a potential Presidential candidate in 2020.

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Star Vizn Gives Users the Chance to Train with Star Athletes

Star Vizn, an online training platform that enables users to refine their craft by watching (and listening to) hall of fame trainers, has launched IOS and Android applications. Offered in a variety of sports/disciplines (basketball, football, boxing, cardio, gym fitness etc.), legends like Jerry Rice, Dominique Wilkins and Roy Jones Jr. lead subscribers through a series of exclusive, behind-the-scenes, 12-week training regimens. JohnWallStreet had a chance to speak with Star Vizn CEO Adam Joosten about the company’s niche, competitors and hardware aspirations.

JWS: Where does Star Vizn fit into this vast world of niche/boutique fitness?

Joosten: Growing up, I had done all the at-home fitness videos; but, I didn’t enjoy doing push-ups and regular workouts. So, I set-out to design fitness programs around your favorite sports and athletes; morphing what somebody is already passionate about, with a fitness program built around it.

JWS: As companies like Orangetheory and Peloton have grown in popularity, some of their instructors have gained cult-like followings; almost becoming fitness influencers. While your product is app based, do you view those companies as competitors?

Joosten: We’re more competitors with companies like that, than we are with your standard Beachbody or Daily Burn; companies that are doing traditional general fitness. They (Orangetheory, Peloton) did a great a great job of making fitness fun, which is what the core emphasis for Star Vizn is. We added the different sports element to interval training.

JWS: I read that Star Vizn has its own line of hardware. Do you see yourselves as a hardware or software company?

Joosten: The hardware is a way to accentuate the different software programs; so, for the audio workouts, having headphones that improve that experience. We want people to be able to stay on Star Vizn and be able to purchase anything that they need, as opposed to buying a fitness program and realizing they need a jump rope and having to go somewhere else. Right now, we’re just selling resistance bands for our fitness programs and headphones for our app; but, over time we’ll definitely have more hardware (hint: a watch is coming).

Howie Long-Short: Star Vizn has raised just $2 million of friends and family money, less than half the amount Orangetheory has raised ($4.8 million). Peloton, a hardware company first, has raised $444.7 million over 7 rounds; but, nearly all that money is privately backed. There is one way to play Peloton. NBCUniversal (CMCSA) was one of 8 investors to have participated in the company’s May ’17 Series E investment round ($325 million).

Fan Marino: Roy Jones Jr.’s boxing program was among the first to launch; smart choice, his promo video has me ready to run through a brick wall. I had the chance to interview Roy about a variety of topics including his thoughts on the Deontay Wilder/Luis Ortiz fight (March 3^rd). The interview will run in our Heavyweight World Championship preview edition on March 2^nd.

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