Le Sports (formerly known as LeTV Sports) held a press conference on October 31 and announced that it has acquired a wide-ranging broadcast rights to all Asian Football Confederation (AFC) events across all platforms in China from 2017 to 2020 for US $110 million.
In addition, the blooming Chinese company also acquired 20% shares of World Sports Group (WSG), a subsidiary of Lagardere Sports and Entertainment, for a reported US $75 million fee, making it one of the three major shareholders of WSG.
The series of moves is believed to be an important part of the global strategy made by the online sports streamer in pursuit of further expansion of its blue-ribbon sports rights portfolio as well as a reinforced focus on sports layout inside LeTV.
Shift to niche sports?
Acquiring rights to top events means more users, web traffic, advertisers, sponsors and industry talents could be introduced to the rights holder. Besides, it is also a great way to support related product of the company.
However, it also means heavy investment on a long-term basis for the company to have the related rights and to monetize on the investment. As a result, these kinds of investments often make headlines in newspaper.
For example, Wanda Group made an acquisition of Infront Sports & Media for 1.05 billion euros, making it the agency and broadcaster for seven sports in winter Olympics; Ti’ao Power, a subsidiary of CMC, acquired right to Chinese Super League (CSL) for the next five years with an offer of RMB8 billion; Tencent Sports made an offer of US $500 million to have the broadcast rights to NBA in China for five years; PPTV signed a 250 million euro-deal to have La Liga rights for five years; Le Sports, Tencent Sports and Sina Sports offered 18 million US dollars separately to have the rights to Premier League from Super Sports.
As a major player in the sports right market, Le Sports turned its attention to “niche sports”, a result which is believed to be a compromise made by Le Sports for ever-growing costs and lack of core events. According to statistics, Le Sports has more than 120 events in its sports right portfolio, which enable the company to screen an average of 4000 matches per year.
Moreover, Le Sports has begun to create new sports events and rights inventory around its smart hardware. For example, Le Sports has organized some cycling events based on its launch of smart bicycle.
As sports rights become more expensive, company who have acquired those rights should come out more way to pay off the investment and eventually make profit. For other companies, who want to enter the sports business, should have a better understanding of the market and find a reasonable way to get themselves involved.