Is China-owned MP & Silva about to become the biggest fail in sports marketing history?
Everbright Securities and Beijing Baofeng Technology acquired a 65 per cent stake in 2016 but the firm is struggling to fulfil payments to the Premier League
The Chinese majority owners of London-based MP & Silva, one of the world’s leading sports agencies, are said to be making a desperate effort to save the company from collapse as the mainland continues to rein in investment in overseas sporting properties.
Chinese brokerage Everbright Securities and internet entertainment company Beijing Baofeng Technology, which together own a 65 per cent stake in MPS, face a loss of US$700 million if MPS goes into administration – one of the biggest fails in sports marketing history.
The company, which has bought the rights to a number of high-profile sporting events such as the English Premier League and Italian Serie A, are struggling to fulfil payments for these rights since a promised recapitalisation by Everbright in January this year failed to materialise.
MPS was valued at US$1 billion when Everbright and Baofeng bought a majority stake in the company two years ago – based on the company’s annual turnover in excess of US$600 million for the year ending June 2015 –at the height of Chinese overseas investment in entertainment and sporting properties.
The swoop won the 2016 TMT Finance media deal of the year but in late 2017, the Chinese government started clamping down on overseas investments in property, sports, and entertainment, labelling them as “irrational”.