Death knell sounds for MP & Silva in High Court ruling
By Martin Ross
The UK High Court’s Bankruptcy Court today ruled that the MP & Silva agency is to be wound up after a petition was lodged by the French Tennis Federation.
The court order will now lead to the dissolution of MP & Silva Limited, the London-based headquarters operations of the agency, as assets and remaining revenues go towards payments to various creditors.
MP & Silva had been teetering on the brink of collapse since it emerged in July that it has been financially ‘paralysed’ by a lack of support from its Chinese owners Everbright and Baofeng.
There were two supporting creditors that joined the FFT action brought against MP & Silva, one of them being Jochen Lösch, former chief executive of the agency.
The case was heard under the UK’s Insolvency Act 1986.
Lösch was forced out as chief executive 12 months ago and was replaced by Seamus O’Brien, but was retained in a consultancy role.
The winding-up petition from the FFT, which claims to be owed millions in rights fee payments as one of several rights-holders to have terminated its media rights sales agreement with the agency, was adjourned by seven days until today.
Norton Rose Fulbright, MP & Silva’s lawyers, had informed the FFT in writing of the company’s opposition to the winding-up order, although no representatives of the agency were present in court last week.
The winding up only concerned MP & Silva Limited and not the agency’s other offices around the world. However, sources close to MP & Silva expect the remaining offices to now fall “like a house of cards.”
Sportcal understands that there are around a dozen MP & Silva staff remaining in London and that they were not paid their salaries last month (the October salary would be due in around 10 days’ time). Leading senior executives, including O’Brien, have already exited the agency.
Rental payments on the agency’s plush Mayfair offices were paid up until the end of September, while agreements with consultants were terminated over the summer, leaving them unpaid for the month of August.
Any remaining MP & Silva assets are not likely to be sizeable, given that the agency – unlike its rivals IMG and Infront – does not have physical assets such as broadcast equipment and facilities at its disposal.
MP & Silva signed a five-year agreement with the FFT to sell the French Open’s media rights across Europe (excluding France) from 2012 to 2016.
The deal was subsequently extended to cover the 2017 edition of the ‘Grand Slam’ and then an extension was signed from 2018 to 2021. Following the termination of the MP & Silva agreement, the FFT has been selling its rights in-house and honouring existing deals with broadcasters.
Today’s judgement leaves open the obvious question as to how the AGCM, Italy’s antitrust body, can now be successful in recovering any fine handed out to MP & Silva in a probe into the alleged collusion between the agency, B4 Capital and IMG over the sale of international broadcast rights to Serie A. MP & Silva, B4 and IMG were all the subject of European Commission raids in April in a crackdown on possible violation of antitrust regulations.
Everbright and Baofeng teamed up in 2016 to secure a joint 65-per-cent stake in MP & Silva in a deal valuing the agency at over $1 billion, leaving the remaining 35 per cent divided between founders Riccardo Silva, Andrea Radrizzani and Carlo Pozzali, as well as members of the management team.
However, operations at Baofeng have been drastically scaled down since its investment, leaving Everbright to effectively take control from a shareholder perspective, but displaying little appetite to support the agency amid a Chinese government crackdown on foreign spending on sport.
Riccardo Silva, who co-founded MP & Silva by teaming up with Media Partners, the Italian rights agency, is understood to have held unsuccessful discussions earlier this year with a view to help facilitate a restructuring and recapitalisation of the agency.
A full analysis of MP & Silva's fall from grace features in the latest edition of Sportcal Insight magazine, which can be read here.