LeSport COO, Vice President Have Quit, Sources Say
(Beijing) — Two top executives at LeEco’s once-ambitious sports division — Chief Operating Officer Yu Hang and Vice President Zhang Zhiyong — have resigned, sources inside the company tell Caixin.
The departures come after Chairman Jia Yueting admitted in November that the company was suffering a cash crunch that led it to reduce its heavy spending on electric cars, smartphones and sports.
Twenty percent of LeSport employees were laid off in December, Caixin earlier reported.
Caixin sources said Zhang, who was CEO of sporting goods company Li-Ning before overseeing LeSport’s e-commerce business, no longer works at the company.
Yu, who has been in charge of LeSports’ deals and overseas strategy, published a post on social media on Tuesday that said he would be “going back to work in the LeSports office this afternoon.” However, he did not directly address whether he had handed in his resignation.
A company spokesperson said on WeChat on Wednesday that he was “unaware” of the resignations.
The sports arm of LeEco was created with the hope of cashing in on the rise of China’s middle class, with its greater awareness of fitness and willingness to pay to watch live tournaments.
LeEco, a sprawling giant that began as a video-streaming site, paid over $100 million for exclusive NBA broadcast rights in Hong Kong and another 2.7 billion yuan ($392 million) for exclusive rights to broadcast China’s Super League football games. These are just two of the more than 250 rights the company has swallowed up in the course of a year, Yu earlier said.
However, the investments have not been profitable.
“We’ve discovered that monetization for quality sports matches is not as easy as we expected,” LeSport CEO Lei Zhenjian said in an interview in November. “This has caused a large cash void, and we are now being tested over the stamina of this company.”
The company was forced to scrap the International Championship Cup in July, a last-minute letdown to fans who were anticipating a match between English soccer clubs Manchester City and Manchester United.
An investment deal in major local soccer club Beijing Guoan was terminated in late October, as the club’s chairman said that LeEco failed to meet its capital commitments.
Rumors that the cash-troubled LeEco could be giving up comprehensive rights to China Super League tournaments for the coming season began swirling as one investor during a company call said that Super League rights were both “expensive and pointless.”
“We’ve got over 10,000 live games each year. We could do without the Super League,” the investor said.
One report claims that LeSport has already sold off new-media rights to the matches. LeEco declined to comment on the matter.
Contact reporter April Ma (email@example.com)
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