6 p. m., the Presidential Suite at the Four Seasons Hotel Milan.
Lin Qi took off his suit jacket, loosened his tie, and stood in front of the floor-to-ceiling window.
Outside the window, the spire of Milan Cathedral rises, and the setting sun bathes the entire city in gold.
Lin Qi spread the documents out on the large desk...
The Boston Celtics ' financial report, information on major Europe basketball clubs, budget lists for arena construction, and preliminary plans for the EBA League.
Lin Qi turned and walked to the table, picked up a pen, and opened a blank notebook.
He picked up his pen and wrote on the first page of his notebook.
EBA League Financial Planning (2001-2005)
Part 1: Income.
The first thing Lin Qi needed to figure out was how much money he actually had.
He opened the Celtics ' financial report and examined the numbers line by line.
"The 1999-2000 season," he muttered to himself, "Ticket revenue $39.4 million, broadcasting revenue $30 million, local broadcasting rights $18 million, playoff tickets $18 million, sponsorships and merchandise $12 million... total revenue $117 million."
He paused for a moment and wrote the number down in his notebook.
"And the costs?" he continued flipping through the documents. "Player salaries: 56.55 million; coaches and management: 9 million; arena operations: 18 million; other operating costs: 15 million... Total costs: 104 million."
With rising salaries, the Celtics' net profit last season was only $13 million. But outside of the team, the New Garden generates $18 million in net profit annually. The arena is more profitable than the team. That's why they're building 13 arenas in Europe. Data companies and streetwear businesses contribute about $15 million, plus the long-tail revenue of about $10 million annually from Good Will Hunting's video and television licensing.
Lin Qi drew a line at the bottom. With approximately $80 million in net cash flow annually, it could provide a safety cushion of over $300 million over the next five years.
Then, he turned to a new page and wrote: Available funds at the beginning of 2001.
With the bursting of the tech stock bubble, his short options on Nasdaq, which he had placed in advance, will be liquidated next spring. After deducting the funds he has already used over the past two years, he will have a solid $3.2 billion in cash on hand at the beginning of next year.
With this money in hand, the next step is to project the expenditures.
Lin Qi turned his gaze to another thick document on the table, the cover of which read " Europe Team Acquisition Assessment Report".
Lin Qi turned to the first page, where four clubs he had already acquired controlling stakes in— Olimpia Milan, Badalona Joventut, Virtus Rome, and Belgrade Red Star —were set aside. These were already his assets and no longer needed consideration.
Now we need to deal with the remaining 9.
On the information page, Italy Bologna, despite its EuroLeague League pedigree, is mired in financial crisis, incurring annual losses of up to $7 million. Lin Qi has marked "fully owned" next to the team's name. Gherardini's team has already contacted Bologna's creditors, whose attitude is clear: they are ready to give away 100% of the equity for free if someone is willing to assume the debt and commit to operating funds for the next three years.
Next to Bologna, Lin Qi wrote: $0 equity, $12 million in debt, $21 million in three-year operating capital commitment (with a loss of $7 million per year), and a total cost of $33 million.
Other companies in this category include ASVEL Lyon from France, Bayern Munich from Germany, Baskonia from Spain, AEK Athens from Greece, and Efes, which is controlled by the Turkey beer company.
ASVEL Lyon is in a slightly better position, with annual losses between $4 million and $5 million, but it still needs external capital injection. Lin Qi estimates: $2 million in equity, $8 million in debt, $15 million in operating costs over three years, and a total cost of $25 million.
Although Bayern Munich's basketball department bears the name of a Germany powerhouse, it has long been overshadowed by the football department, resulting in poor financial independence. Lin Qi's strategy is to directly buy out 40% of the basketball department's equity and operating rights from Bayern Football Club. Estimated costs: equity 2 million, three years of operating funds 20 million, total cost 22 million.
Baskonia, located in the Basque Country, has a nationalist ethos, but its financial situation is equally dire, with annual losses of approximately $6 million. Lin Qi estimates: $3 million in equity, $10 million in debt, $18 million in operating costs over three years, and a total cost of $31 million.
AEK Athens was one of the three giants of Greece football, but financial problems began to emerge in the 2000-2001 season. Lin Qi's strategy was to sell before the club fell into a deep crisis. Estimated costs: equity 4 million, debt 6 million, three years of operation 15 million, total cost 25 million.
Efes in Turkey is controlled by a beer company and has a very clear commercial focus, but its parent company began to reduce investment in non-core businesses around 2000. It is expected that 100% of the equity can be acquired directly. Estimated cost: 15 million for equity, and 5 million in operating funds will be required annually for the first three years after the acquisition, for a total cost of 30 million.
Lin Qi gathered this part of the documents on the left. These 6 teams, with a total cost of approximately $169 million, could be completely acquired.
Next up are the really tough nuts to crack.
Lin Qi pulled out the files of two Greece powerhouses, Panathinaikos and Olympiacos. The former is controlled by the Giannakopoulos family, which previously acquired a 10% stake under the guise of cooperation. The latter is family-owned and involves huge industrial interests in the port of Piraeus.
Further down the line, Turkey's Fenerbahçe involves both political and business circles, while Israel's Maccabi Tel Aviv is a politically sensitive asset with national symbolic significance.
Finally, there are two Spain giants: Royal Madrid and Barcelona. These two clubs, the most glorious in Europe history, operate on a membership system, and their basketball departments simply cannot be sold independently.
Lin Qi stared at the names of the six teams, lost in thought.
Forcibly acquiring such local power brokers would only backfire. But if they were to give up entirely, the EBA League would lose its core market appeal.
He wrote one word in his notebook, "Gymnasium".
Then he started writing down negotiation strategies on the side.
"I don't need equity; I'll build you the most luxurious stadium in all of Europe."
In exchange: the stadium belongs to me, you're responsible for playing the games, and we'll share the commercial profits.
"Strategic partnership model with Panathinaikos, Olympiacos, Real Madrid, Barça..."
" Fenerbahçe, Maccabi Tel Aviv... a tripartite agreement: I will fund the construction of the stadium, the government will provide land and policy support, and the club will commit to participating in the EBA League."
Next to each of these six names, Lin Qi noted. "Not pursuing complete control, but controlling the commercial operation rights of the stadium."
He leaned back in his chair and lit a cigarette.
The core of this strategy lies in controlling the commercial lifeline of elite clubs through stadiums, without angering local political forces.
For Panathinaikos and Olympiacos, Lin Qi would say: I'll build you two brand new, modern arenas that can hold 18,000 people each, with an investment of $250 million each. I'll retain the naming rights and commercial operation rights of the arenas, but you can use them for free and share the ticket and sponsorship revenue.
For Real Madrid and Barça, Lin Qi would say: I will build dedicated training bases and competition venues for your basketball departments, you can maintain your membership system, but we will cooperate deeply on broadcasting rights and commercial development.
For Fenerbahçe and Maccabi Tel Aviv, Lin Qi would say, "I'm investing in building stadiums with your governments. These are not just sports facilities, but also city landmarks and economic engines. The government provides the land, I provide the funding, and the club provides the brand—a win-win situation for all three."
After reviewing the acquisition strategies for all nine teams, Lin Qi turned to a new page in his notebook and began calculating the costs.
He wrote at the top of the page: The team acquisition and cooperation costs will be carried out in batches.
The first batch, in the summer of 2001, totaled $108 million.
The second batch, in the spring of 2002, totaled $61 million.
The third batch, from autumn 2002 to 2003.
Use the momentum built up from the first two batches to advance cooperation among powerful families with complex political backgrounds.
Panathinaikos, Olympiacos, Real Madrid, Barça, Fenerbahçe, Maccabi Tel Aviv... These six teams will not acquire equity, but instead invest in stadium construction (US$200-250 million per stadium) in exchange for: naming rights and commercial operation rights, broadcasting rights revenue sharing, sponsorship revenue sharing, and EBA League participation commitments...
Lin Qi underlined the two numbers, arriving at the final total: $169 million.
He wrote down next to it that the budget was set at $170 million (including negotiation and legal costs).
The real investment is the $3.1 billion stadium construction. Through the stadium, they can control the commercial lifeline of these elite clubs, whether they are willing to sell their equity or not.
Lin Qi leaned back in his chair, looking at the figures on the paper. $170 million to cover the debts and future operations of six Europe powerhouses, plus $3.1 billion for arena construction, would give him a firm grip on the 13 most commercially valuable basketball markets in Europe.
Six teams are wholly owned, four are already under our control, and the remaining three control commercial rights through the stadiums. But the result is the same...
All 13 founding teams of the EBA League have been incorporated into his business empire.
"Five years from now," Lin Qi said to the air, "We'll have $331 million in cash left. That's just enough for the next five years."
This figure seems generous, but it's contingent on the Celtics not running into any problems. If player salaries continue to balloon, a portion of that $80 million in net cash flow each year will be eaten up.
Lin Qi wrote a few words in the blank space of his notebook: Celtics salaries must be kept within a reasonable range, otherwise the overall cash flow will be under pressure.
wrong...
One item is missing.