LionRock buys stake in Italian football club Inter Milan

LionRock is taking a 31.05% interest held by Erick Thohir, an Indonesian media tycoon who led an acquisition of the club in 2013. The deal is reportedly worth EUR150 million ($171 million). Suning paid EUR270 million for 70% of Inter Milan as part of a wider effort to diversify into sports, media, and entertainment. Steven Zhang, the 26-year-old son of Suning chairman Jindong Zhang, replaced Thohir as chairman in October 2018.

Last year, LionRock became a shareholder in Suning Sports, which holds the Chinese media rights to a range of sporting competitions, including England’s Premier League, Spain’s La Liga, Italy’s Serie A, Germany’s Bundesliga, and France’s Ligue 1. It participated in a $600 million Series A round led by Goldman Sachs and Alibaba Group that valued the business at more than RMB10 billion ($1.5 billion).

“We are very optimistic about the business development prospects of all sports-related activities and with over 110 years of history and global influence in the football area, FC Internazionale Milano has exciting future development potential. LionRock Capital will fully support Inter’s key objective to make the club one of the world’s top football clubs both on and off the pitch,” said Daniel Tseung, LionRock’s founder and managing director, in a statement.

Inter Milan’s achievements include 18 Italian league titles, seven Coppa Italia victories, and three UEFA Champions League trophies. The club currently sits third in the league table – five points ahead of local rival AC Milan but 19 behind leaders Juventus – with 12 wins out of 21 matches. It finished fourth last season to qualify for the Champions League, though failed to reach the knockout stages.

Amidst a flurry of activity in 2015 and 2016, Chinese investors committed $1.07 billion across eight outbound football-related transactions, according to Mergermarket. PE deals included CMC Holdings and CITIC Capital paying $400 million for a 13% stake in Abu Dhabi-based City Football Group, which owns the Manchester City Football Club and other related businesses, and IDG Capital taking a 20% interest in OL Groupe, the holding company of French football club Olympique Lyonnais, for EUR100 million.

It reflects a wider trend of strategic and financial investors seeking to monetize sports assets in China. In some cases, these deals could be seen as part of wider efforts to better engage with consumers and bolster core businesses: for example, while Alibaba has lined up with Suning on sports streaming, Baidu-backed iQiyi Sports has won support from the likes of CMC and IDG. In others, there are concerns that wealthy groups and individuals are pursuing assets opportunistically with little strategic rationale.

Notably, AC Milan was sold to a Chinese consortium – including an investment firm controlled by the State Development & Investment Corporation – a few months after the Inter Milan deal. Yonghong Li was described as the main sponsor of the group and chairman of the acquisition vehicle. Li reportedly financed his portion of the deal with a loan from Elliott Management and the hedge fund took majority control of the club last year after he failed to repay the debt.

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• Topics
• Greater China
• Europe
• Media
• Expansion
• Consumer
• China
• Lion Rock Capital
• Growth capital