China's LeSports Said to Default on Major Soccer TV ContractBy
Billionaire Jia Yueting’s company had Asian soccer agreement
Default first sign of crack in explosive China rights market
Chinese sports media company LeSports has been stripped of its rights to broadcast Asian Football Confederation soccer games after defaulting on payments, according to people familiar with the matter.
The company, a subsidiary of billionaire Jia Yueting’s smartphone-to-taxi service business LeEco, missed a payment in January and another deadline to pay a portion of its $100 million contract by last week, said the people, who asked not to be identified because the matter is subject to a lawsuit.
LeSports’ Hong Kong office declined to comment, as did a China-based spokesman for LeEco. The Asian Football Confederation didn’t immediately respond to an e-mail seeking comment.
LeSports’ failure to make the payment is the first sign of cracks in China’s super-charged media market for sports rights, which has seen companies in the world’s most-populous country bid up the price of soccer properties from the domestic Super League to England’s Premier League to record levels. PPTV in November agreed to buy three years of Premier League for more than $650 million, more than 12 times the current contract.
The deal between LeSports and the Asian Confederation was negotiated by Lagardere Sport and Entertainment, an agency that has exclusive rights to sell the AFC’s media and marketing properties. LeSports’ agreement allowed it to broadcast the Asian Champions League, qualifying matches to the World Cup and the Asian Cup.
LeSports was given a final mid-February deadline to make a payment that was due at the start of January, and after missing that too, the company was told that its contract was terminated and legal action would be taken to secure the funds, one of the people said.
LeSports’ problems come amid an increasingly competitive race between Chinese media companies paying premium prices for top sports content. The companies, including units underpinned by some of the country’s biggest businesses, are betting that the loss-leading ventures will one day lead to profits following a growth in subscriber and viewer numbers.
Yueting has been battling allegations over missed payments related to some of his other ventures, with some suppliers taking legal action in the U.S. over unpaid debts. Last month, the billionaire apologized for making “inappropriate” comments about boosting the stock price of LeEco’s main listed unit.
Known for speaking his mind, Yueting has taken aim at Apple Inc. and Tesla Inc., saying his firms, including electric car division Faraday Future, will one day overtake them. However, last year he said that his businesses grew too fast and spread themselves too thin. LeSports cut 10 percent of its staff in December, pinning the move on a drive to improve efficiency.
In January, Yueting helped arrange a 16.8 billion yuan ($2.4 billion)investment, mostly from fellow Chinese tycoon Sun Hongbin’s Sunac China Holdings Ltd. At the time, Yueting wouldn’t specify exactly how the funds would be disbursed, apart from saying “most if not all” would bankroll non-listed businesses under the LeEco banner.
— With assistance by David Ramli
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