Friday Dump 🥟 - Inter Milan debt, Goodbye TNT, Hello TNT?

Oh behaveeee Friday Dump 🥟

Each Friday, we’ll breakdown 3 sports business stories that have caught our eye throughout the week. They will be assembled in the following format:

🔴 - Stories that make us stop, think, and question.

🟡 - Stories with a hint of risk and unpredictability.

🟢 - Stories that make us feel good to go and empowered.

Enjoy these three stories…baby

🔴 Italian club owner rejected at the ATM. Powerhouse soccer clubs and financial distress just seem to be the perfect combo these days, don’t they 😳? Just the other day it was announced that Inter Milan, this season’s Serie A champion, has a new owner in U.S.-based investment firm Oaktree Capital Management. This, after the club’s previous owner, Chinese holding company, Suning, missed a $428M loan payment deadline on Tuesday (i.e. they defaulted on the loan). So how did this all come about?

• Suning bought 70% of the club in 2016 that valued Inter at ~$400M.

• Then, in 2021, Suning took an emergency “short-term” $297M loan (with 12% interest for 3 years) from Oaktree to shore up the club’s finances as ticket sales were plummeting due to effects of the pandemic.

  • You already know how this goes down: if Suning wasn’t able to pay Oaktree back, then Oaktree would take hold of Suning’s share of the club.

• In 2022, Inter attempted to refinance their debt by hiring bankers and exploring a sale of the club (Suning was looking for ~$1.2B)…but that unfortunately didn’t happen.

• Potential buyers were scared off by the fact that Inter was drowning in $900M of total debt + continued operating losses and stadium uncertainty (as Inter shares a stadium with rival AC Milan 🤨).

🟡 You’ll be in my heart, Inside the NBA on TNT. Thank you, Phil Collins, for that wonderful rendition of your 1999 hit from the movie, Tarzan. Well folks, it’s just about done. After weeks of speculation, reports came out from Sports Business Journal that the NBA is formalizing written contracts with Disney (ESPN), NBC, and Amazon this week, calling it the final stage of this long-awaited NBA media rights negotiation. This means, Warner Brothers Discovery and their beautiful step-child, TNT, will end up losing the media rights after broadcasting NBA games since 1989 🤯 (guys, Michael Jordan hadn’t even won his 1st of 6 championships yet!). Let’s break this down even more…

• ESPN is expected to pay ~$2.8B annually for the league's "A" package.

  • This would include the NBA Finals, a conference final, weekly primetime games, primetime WNBA games, and shared international rights.

• NBC would hold rights to the "B" package which is said to be worth ~$2.6B annually.

  • This would include a "Sunday Night Basketball" following the NFL season, a total of two primetime windows a week, conference semifinals, and a conference final.

• Amazon’s deal would be worth ~$2B.

  • This would include the Emirates In-Season Tournament, the SoFi Play-In Tournament, first-round playoff games, some WNBA games, and international rights.

• But there’s still some hope for the ever-so-popular (lol jk, not popular at all 😂) David Zaslav-run company, WBD…

  • Sources said the NBA will take NBC's contract to WBD and see if Zaslav will match it in "total value."

  • …But that might be a problem as WBD is $40B in debt and does not have the same broadcasting infrastructure like NBC.

• Ultimately, this will come down as one of the bigger choke-jobs in media & entertainment history. WBD & Zaslav had an exclusive negotiating window of opportunity from mid-March to April 22 to sign, seal, and deliver a deal the NBA couldn’t refuse.

  • Unfortunately, Zaslav publicly made it known he was a) not going to pay more than their last deal ($1.2B) as they would naturally get less games and b) he clearly didn’t believe too much in the product, after making a statement saying “We [WBD] don’t have to have the NBA.” 😬

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🟢 TNT’s loss stings a little less. Oh you thought we were done talking about TNT? Yeah, we actually did too. Then news broke on Wednesday that TNT Sports inked a 5-year deal with ESPN that will allow the network to carry two first round games of the College Football Playoff (CFP) for both the 2024 and 2025 season. And for the three seasons following, they will add two more quarterfinals games to their roster. This comes in as big news after the NBA is rumored to be sleeping around with NBC. But, let’s review what we know…

• Back in February, ESPN and the CFP agreed on a six-year, $7.8B extension that made the network the home of the tournament through the 2031-32 season.

  • Financials were not disclosed for this particular deal, but even though games will be shown on TNT, they will be produced by ESPN.

• Remember that skinny sports bundle we hit on a couple months ago? Well, we officially have a name…Venu Sports. And this is important, because the bundle is consisted of ESPN, WBD, and Fox. Which means both ESPN and WBD have history in terms of partnering and collaborating on projects.