A company housing the media and sponsorship rights of Italian football club FC Internazionale Milano SpA risks a potential ratings downgrade after a lack of payments from a cryptocurrency market sponsor.
(Bloomberg) — A company housing the media and sponsorship rights of Italian football club FC Internazionale Milano SpA risks a potential ratings downgrade after a lack of payments from a cryptocurrency market sponsor.
S&P Global Ratings has placed Inter Media and Communication SpA on a negative credit watch after DigitalBits, a blockchain used to power crypto assets, didn’t pay €16 million ($16.9 million) in bonus payments for the current sports season nor €1.6 million for the previous one, the ratings firm said in a statement on Thursday.
Inter Media, currently rated B, could be downgraded by one notch if Inter Milan cannot replace DigitalBits with another sponsor offering a similar contract, S&P said. The crypto firm, which adorned the club’s shirts, depends on cashflows from a deteriorating crypto market, and the lost cash for Inter could lead to a more than 50% decline in forecast sponsorship revenues from 2024, S&P said.
“Current weak economic conditions should frustrate the club’s search to replace DigitalBits on similar terms,” wrote S&P analysts in the statement. “The current economic environment would also demand full due diligence and solid understanding of the credit quality of potential sponsorship partners.”
That could be a worry for holders of Inter Media and Communication’s €415 million in high-yield bonds, which pay an annual interest payment of 6.75% and are due in 2027. The football club already had to seek a €275 million emergency credit line in 2021, to weather the gap in its finances experienced during the pandemic when stadiums remained empty.
FC Internazionale Chairman Steven Zhang has recently denied media reports that the club is for sale. Suning Holdings Group Co. is the team’s majority owner.
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