LeSports acquires global broadcast rights for $410m

JOYCE HO, Nikkei staff writer

HONG KONG -- After spending a whopping $400 million to win the three-year broadcast rights to the English Premier League soccer games in Hong Kong, LeSports, an affiliate of Leshi Internet Information & Technology, has become the sole worldwide broadcaster for the Chinese Super League in the coming two seasons.

     The rights to airing 480 matches of China's highest-tier professional soccer are worth 2.7 billion yuan ($410 million), Yizhong Cheng, the CEO of LeSports Hong Kong, told reporters at an event. LeSports acquired the rights from Ti'ao Dongli, a unit of China Media Capital, which paid the league 8 billion yuan in October to control the rights for five years.

     Cheng said the games could attract 100 million viewers across the globe. According to the Chinese Super League organizer, total attendance for the 2015 season ended in November reached 5.33 million, with more than 23,000 people turning up at each game on average, up 15% from the previous year.

     An increase in world-class players would boost the appeal, Cheng said.

     In the latest transfer window, the Chinese Super League clubs already surpassed the English Premier League in term of cash spent on player transfers. The Chinese clubs reportedly splashed out with 194.2 million British pounds ($274 million) in spending altogether, while their British counterparts spent 175 million British pounds.

     Early this month, Jiangsu Suning signed Brazilian player Alex Teixera from Shakhtar Donetsk for a record 38 million pounds, following Guangzhou Evergrande's 31.5 million pound recruitment of Columbian Jackson Martinez from Club Atletico de Madrid, and Jiangsu Suning's 21 million pound hire of Ramires, the Chelsea midfielder.

     They are among the 16 clubs participating in the Chinese Super League, sponsored by Ping An Insurance since last year.

     Cheng has also revealed the company will obtain three more rights to broadcast international sporting events in Hong Kong this year.

     Such acquisitions are enabled by LeSports's completion of its Series B financing last week, according to a report by Shanghai Securities News published by state-owned news agency Xinhua, which said the company had raised $1 billion to obtain the biggest investment in China's sports entertainment industry on record.

     The company also saw its valuation swell to $4 billion from $2.8 billion last May when its Series A financing closed. That round helped bring in 800 million yuan for the company. China's two richest men, Wang Jianlin, owner of Dalian Wanda Commercial Properties, and Jack Ma Yun, chairman of Alibaba Group Holding through his private fund Yunfeng Capital, were among the lead investors.

Synergies

The exclusive programs of LeSports, displayed with high-definition and 4K technology, are accessible for free through the gadgets developed by its sister companies -- be it mobile phones, tablets, televisions, or set-top boxes.

     Through building an all-encompassing ecosystem to grow its customer base, the company said it generated an estimated $1.6 billion in revenue from online content as well as sales of smart televisions in China last year.

     Beginning as a video-streaming platform called LeTV founded by billionaire Jia Yueting in 2004, the companies grouped under Le Holdings have forayed into everything from Internet television, video production and distribution, smart gadgets, and mobile applications to Internet finance and electric vehicles.

     There is also speculation that the Beijing-based company is teaming up with Sinvo Capital, Shanghai Shimao, Shenzhen O-film Tech, and four other companies to build a nonlife insurance firm with registered capital of 1 billion yuan. Le Holdings is reported to be the largest shareholder with a 17% stake worth 170 million yuan.

     The Le companies were rebranded under the LeEco name in January. Leshi's Shenzhen-traded shares have been suspended since Dec. 7 due to a pending asset restructuring, set to be disclosed by March 7.

     Outside of Beijing, parent Le Holdings has a regional headquarters in Silicon Valley, where it has invested in electric-car designer Atieva.

     Last week it unveiled a partnership with Aston Martin, the English automobile maker most famous for building James Bond cars. They aim to launch an Internet-based electric vehicle modeled on Aston Martin's RapidE in 2018. The partnership also implicitly includes Faraday Future, another electric-car startup that the conglomerate backs.