Chinese Super League’s Broadcast Rights Holder Renegotiates Amid Fears of Loss

(Beijing) — The holder of the broadcasting rights for China’s professional soccer league said it is delaying payments to the league while its contract is renegotiated.

China Sports Media Ltd. (CSM), the holder of broadcasting rights for the Chinese Super League (CSL), is seeking to extend its contract period from five to 10 years, amid concerns over a series of new rules introduced recently by the Chinese Football Association (CFA) — rules CSM says will hurt its ability to recoup its investment in the short term.

In 2015, the Beijing-based media firm acquired the five-year broadcast rights for CSL matches, agreeing to pay 8 billion yuan ($1.18 billion) in yearly installments.

The investment was in line with China’s government-led drive to make soccer its national sport, but the expensive deal raised skepticism in the industry about whether it would be paid back.

The investment returns initially seemed probable. In 2016, CSM sold two-year exclusive rights for online broadcasting to technology giant LeEco, for 2.7 billion yuan. But due to a cash crunch, LeEco in turn sold the 2017 online rights to video platform PPTV for 1.35 billion yuan.

Meanwhile, the CFA — a government supervisory body and the largest shareholder of the CSL — recently rolled out a series of administrative restrictions that have dampened interest in the matches, and have raised concerns from broadcasting rights holders. The new rules cut the number of foreign players, who often make the most appealing highlights and attract the most viewers.

Last month, CSM decided to delay paying its second installment of 600 million yuan. “At that time, what we bought was ‘a future,’ but the future didn’t come, so we need to renegotiate,” said Zhao Jun, general manager of CSM.

As a result, CSM proposed a solution to the CSL, hoping to offset potential losses by extending its contract period from five years to 10 years as the soccer market will improve in the long run, Zhao said Friday at the Leaders Sports Business Summit in Beijing.

Contact reporter Song Shiqing (shiqingsong@caixin.com)