Lin Zhang, chairman and board member at Wanda Sports Group, the owner of the Infront agency, among other interests in sport, has relinquished his roles and will be succeeded as chairman by Maojun Zeng, who has been with the Wanda conglomerate for 14 years.
Wanda Sports announced today (Monday) that Zhang was stepping down from his positions to “assume a new role within the broader Wanda Group”.
The news coincided with Wanda Sports’ announcement of the completion of the sale of its Ironman business to US-based media and technology group Advance Publications for $730m (€638.7m). The sale came after Wanda warned of the ‘material adverse impact’ of the Covid-19 pandemic on its mass participation business before taking out a $240m loan facility to refinance its debts.
As a result of the sale, Andrew Messick, president and chief executive of the Ironman Group, has resigned his position on the Wanda Sports Group board.
Zeng has also assumed Zhang’s positions on the board committees for audit, compensation and nomination/corporate governance.
Zhang was Wanda Sports’ chairman as the company launched its (ultimately-downsized) initial public offering on the Nasdaq stock exchange in New York 12 months ago.
Detailing Zeng’s background, Wanda Sports said: “Since July 2017, Mr. Zeng has served as president of the Wanda Film Group, part of the Wanda Cultural Industry Group. Mr. Zeng served as senior vice-president of Wanda Cultural Industry Group from October 2016 to July 2017. He also has served as a director of AMC Entertainment Holdings, Inc., an indirect subsidiary of Wanda Group, since February 2016 and as chairman of the board from March 2018 until December 2019.”
He has also served as president of Wanda Film Holding, a Wanda subsidiary, since June 2015 and has been a member of its board of directors since the start of 2013.
Ironman sale over the line
On the completion of the Ironman sale, Wanda Sports said that net proceeds are expected to be in the range of $380m, a figure reflective of deductions for “existing indebtedness and transaction expenses, as well as the company’s expectations as to the ultimate outcome of an ongoing post-closing purchase price adjustment process”.
The company stated that it “used a portion of the net proceeds to repay the principal amount of $240m and related interest and fees outstanding under its existing 364-day facility, and intends to imminently use a portion of the net proceeds to repay $50m outstanding under a promissory note issued to Wanda Sports & Media (Hong Kong) Holding Co. Limited”.
Wanda Sports reiterated that it intends to use the balance of the net proceeds to return capital to its shareholders “and/or for general corporate purposes”.
Hengming Yang, president and chief executive of Wanda Sports Group, said: “The successful completion of this transaction within the anticipated time frame was a priority for us. We believe that through this completion, we achieved one of the critical steps towards increasing our financial stability and reducing debt leverage.”
Chief financial officer Brian Liao added: “We are pleased with the additional liquidity we are able to unlock through the application of a portion of the proceeds of the sale that closed today. The resulting reduction in our indebtedness will generate a meaningful finance cost savings of 33 per cent compared to the previous year.”
Advance owns publisher Condé Nast and a significant shareholding in Discovery, parent company to the Eurosport channel.
Spain’s markets and competition regulator the CNMC recently approved Advance Publications’ deal to acquire Ironman. The regulator had examined the two companies’ activities in Spain to see if the deal would pose a threat to competition in the markets where they operate.
Ironman parent company World Endurance Holdings runs a host of mass participation events in Spain, including Ironman triathlon and half distance Ironman 70.3 events in cities including Barcelona and Marbella, as well as the Madrid Marathon.
Wanda Sports reported revenues of €1.03bn ($1.16bn) in 2019, a 9-per-cent fall on 2018.
Wanda’s sports arm suffered a 26-per-cent year-on-year revenue drop in the first quarter of 2020 as its Spectator Sports and Mass Participation units were hit by a cyclicality effect and Covid-19, respectively.
Total first-quarter revenue was €163.7m, comprised of €139.8m from the Spectator Sports unit, €1m from the Mass Participation unit and €22.9m from the Digital, Production and Sports Solutions (DPSS) operations.