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Volume 10 No. 25

Finance

Creditors of Lehman Brothers "are on track for a turbocharged windfall" after the collapsed bank announced it is selling its stake in NASDAQ-listed Formula 1, giving it a payout of $1.5B from a $300M investment, according to Christian Sylt for the London GUARDIAN. The offering "also brings the chequered flag down" on former F1 CEO Bernie Ecclestone's time as a shareholder. The billionaire business magnate "is offloading his remaining stake" for $20M. Ecclestone "first took over the wheel of F1 40 years ago and transformed it from being an amateur hobby" into a race series which had revenue of $1.8B last year. Together, Ecclestone and his Bambino family trust have made an estimated $4.9B from dividends and the sale of their shares. Lehman has been involved with F1 since '02 when it gave a $300M loan to German media firm Kirch to finance its purchase of shares in the sport. The loan "was secured on the shares so when Kirch went into Chapter 11 bankruptcy in the same year it left Lehman with a 14.2% stake in F1." Four years later, Lehman sold its stake to CVC for $209.3M, which was "less than the loan it provided to Kirch." However, this was "only a loss on paper as Lehman made the smart decision to reinvest the money in F1," giving it a 15.1% stake. In '08, Lehman went into Chapter 11 bankruptcy and moved its F1 stake from its bankrupt arm, Lehman Commercial Paper, into LBI Group, a "newly formed holding company containing the valuable assets in its portfolio." LBI’s purpose is to "generate cash from its assets which is then used to pay Lehman’s creditors" (GUARDIAN, 9/21).

MAKING A SPLASH: THE DRUM's Shawn Lim reported analyst Blis unveiled insights from the recently concluded Singapore F1 Grand Prix, which found that the race "brought in a huge commercial benefit to the local economy." The analysis showed a "173% jump in mobile activity at key local restaurants and an 82% lift at local shopping malls during the race weekend," as compared with normal weekend activities. Overall, the weekend saw a "413% increase in traffic to key restaurants and a 332% jump at shopping malls," when compared to activity observed throughout the week. F1 grandstand locations were also nearly 500% busier on race weekend (THE DRUM, 9/22).

Struggling to "tackle mounting debt," Chinese tech group LeEco Founder Jia Yueting is reportedly "selling most of his stake in the group's LeSports unit to a new consortium," according to EJ INSIGHT. Jia currently holds a 30.66% stake in LeSports. The new consortium, formed by "several veteran investors," will replace Jia to become the largest shareholder of the company and revamp the board. The "exact date of the transaction has yet to be confirmed as there are still preconditions that must be met for the equity transfer." Members of the consortium and the value of the deal "were not revealed." The amount will cover the outstanding debts of LeSports, "with the balance going to the company's accounts," according to a person familiar with the matter. LeSports will revamp its board of directors after the deal, "aiming to enhance corporate governance, decision-making mechanism, as well as the management process" (EJ INSIGHT, 9/21).

Documents obtained by German publication Der Spiegel through Football Leaks revealed Neymar's "real salary" at Paris St. Germain, according to L'ÉQUIPE. The documents show the striker will earn €36.8M ($43.6M) per year. Earning around €100,000 ($118,512) per week, Neymar is the second-best paid player in the world behind Chinese Super League side Shanghai Shenhua's Carlos Tevez. The future salary of Lionel Messi with Barcelona is expected to be around €40M ($47.4M) (L'ÉQUIPE, 9/24). In London, Danny Gallagher reported the leaks also show that PSG will pay Barcelona up to £214M ($288.3M) for the attacker over his five-year deal in France, "while additionally giving insight into Barcelona's subsequent move" for Ousmane Dembélé. The Frenchman was purchased from Borussia Dortmund by Barcelona and "instantly inherited" Neymar's No. 11 shirt. The leaks show the deal for Dembélé, 20, totals £138M ($186M), with the player "more than quadrupling his earnings." Dembélé will pocket £10M ($13.5M) this year, with a further £3M ($4M) "coming his way should Barca win a treble" (DAILY MAIL, 9/24).