Less than a week after MLB Commissioner Rob Manfred said he was “100% certain” there’d be baseball this summer, he told ESPN’s Mike Greenberg he’s “not confident” there will be a season. “The owners are 100 percent committed to getting baseball back on the field,” he said. “Unfortunately, I can’t tell you that I’m 100 percent certain that’s gonna happen.” 

Manfred’s comments came after the MLB Players Association told the league to set a date to return to play, effectively ending negotiations and setting the table for a future labor issue. Manfred said he believed the union was set to file a grievance against the league saying it did not fulfill its duty to play as many games as possible. In a letter to the MLBPA, the league reportedly said there would not be season unless the players waive any legal claims.

In response, MLBPA Executive Director Tony Clark said players are “disgusted” at Manfred’s decision to back away from his confidence. “This latest threat is just one more indication that Major League Baseball has been negotiating in bad faith since the beginning,” Clark said.

League Updates:

• Along with the new conflict between MLB and the MLBPA, there were also reports several players and coaches tested positive for COVID-19, which could also further delay the season.
• The WNBA has its official plan: a 22-game season at the IMG Academy in Florida starting in late July. Players who participate will receive 100% of their 2020 salaries, but details – including start date – are still being sorted out.
• The NBA reportedly won’t test for recreational drugs when play resumes in Orlando, hoping to help ease the stressful situation. 
• NFL agents were told protocols for the upcoming season would be determined in the next several weeks, including testing players three times a week.
• NASCAR’s All-Star race at Bristol Motor Speedway will allow 30,000 fans, but will not require them to wear masks although they will be “highly encouraged.”

The private equity duo of Josh Harris and David Blitzer continue to grow their foothold in sports, acquiring a less than 5% stake in the Pittsburgh Steelers. The Steelers franchise was most recently valued at $2.8 billion by Forbes, suggesting Harris and Blitzer might have paid up to $140 million for their stake. 

The Steelers reportedly won’t be part of Harris Blitzer Sports & Entertainment’s global portfolio, however, which includes the Philadelphia 76ers, New Jersey Devils, and the Prudential Center, as well as the English Premier League’s Crystal Palace. The investors were also reportedly looking at a bid for the New York Mets recently.  

The investment into the sports world seems to be paying off for Harris and Blitzer; they paid $280 million for the Sixers in 2011, a franchise now valued at $2 billion. Harris is the co-founder of Apollo Global Management and worth $4.9 billion, while Blitzer is the global head of tactical opportunities at Blackstone Group Inc.

Investment News

• Brooklyn Nets forward Kevin Durant is now a minority owner of the Philadelphia Union. The price wasn’t disclosed, but Durant’s 5% ownership comes with an option for an additional 5% down the line. Union majority owner Jay Sugarman said the deal values the Union above the recent expansion fee of $325 million paid by Carolina Panthers owner David Tepper for an MLS franchise in Charlotte. Durant joins fellow NBA star James Harden as an MLS owner, who invested $15 million into the Houston Dynamo last July.
• Bain Capital has reportedly offered to purchase a 25% stake in Italy’s Serie A for $3.4 billion, which would top an earlier $2.3 billion bid for 20% by CVC Capital Partners. The bids are for a unit of the league that owns its television rights, which account for nearly 60% of the Serie A’s $2.8 billion in revenue.
• The owners of AS Roma have secured Goldman Sachs to help find a new owner after a nearly $850 million deal with Texas-based billionaire Daniel Friedkin recently fell through.

UFC is reportedly looking to take on more debt, as Moody’s Investors Service and S&P Global Ratings suggest the organization could add $150 million to its current $2.3 billion loan. Moody’s has judged the loan to be “speculative and a high credit risk.”

The risk comes from a high debt-to-EBITDA ratio, a measurement that is often used to assess the ability of a company to service any debt it holds. UFC’s ratio would be approximately 6.7 with an estimated EBITDA of $350 million in 2019 – typically anything above four or five is considered high. Moody’s warned that UFC’s leverage could increase even further this year with the new loan and with its cash flow expected to decrease because of the pandemic, rising potentially up to eight times EBITDA.

Even without fans for a big chunk of 2020, UFC has been able to increase the cash on the balance sheet, from $151 million in December 2019 to $205 million on May 31. A five-year, $1.2 billion media rights deal with ESPN signed in 2018 will also help UFC shield against some of the debt risk, as will a gradual increase in attendance. UFC was able to resume fights in May, holding events first in Florida and then Las Vegas. It will head to Abu Dhabi for its much-anticipated Fight Island events next month.

The struggles of gyms and the fitness industry from the coronavirus pandemic has continued, claiming 24 Hour Fitness as its latest casualty. The national chain filed for bankruptcy yesterday as it permanently closed 100 locations in 14 states as it hopes to keep another 300 afloat.

In its Chapter 11 filing, 24 Hour Fitness said it secured $250 million to help reopen the majority of its gyms by the end of the month. CEO Tony Ueber said the company would reinvest in the remaining clubs and introduce “new innovative products and services.”

Gyms like 24 Hour Fitness are struggling as the pandemic shuttered locations for months. Gold’s Gym filed for bankruptcy in May, and other fitness companies have also expressed financial pain in 2020, including New York Sports Club warning it’s considering bankruptcy. Like small businesses across the country, the coronavirus outbreak has also caused small gym operators to close permanently.

The past few months have expedited a shift in the $94 billion fitness industry as gym-goers have dropped memberships for at-home alternatives like Peloton or upgraded to boutique studios. Peloton’s revenue rose 66% in the first three months of 2020 as the company now has more than 888,100 connected subscribers.