LeSports seeks to allay market fears with third round of funding
By Jonathan Rest at Sportel America
LeSports, the beleaguered sports arm of the big-spending Chinese technology giant LeEco, has launched a third round of funding, the proceeds of which will be used, it hopes, to allay rights-owners' concerns over payment of bills.
The Series B+ round is presently under way, although no financial target has been publicly revealed.
A year ago, LeSports raised Yn8 billion ($1.16 billion) in Series B financing, having generated an initial Yn800 million in May 2015 when Wang Jianlin, the head of entertainment and property giant Wanda, and Jack Ma, the founder and chairman of e-commerce firm Alibaba Group Holding, both invested.
LeSports is using the Sportel America convention here in Miami this week to stress to clients that "money is coming in," one source told Sportcal.
Once the round of funding has closed, the company will take stock and assess which rights it wants to retain when they come up for renewal.
At the turn of the year, LeEco landed Yn16.8 billion in new investment, with 90 per cent of the funds coming from property developer Sunac China Holdings, albeit only a small proportion of that was directed to LeSports.
Chief operating officer Yu Hang left LeSports earlier this month amid the restructuring at the company.
Last month, LeSports was dealt a significant financial and public relations blow when the Asian Football Confederation, the region's soccer body, awarded media rights to its competitions to China Sports Media after ripping up an agreement with LeSports. CSM was awarded rights in China to AFC events from 2017 to 2020 in a deal brokered by the Lagardère Sports agency.
Announcing the switch of rights owner, the AFC said that it had been left with “no alternative” but to terminate its four-year contract with LeSports worth in excess of $100 million, following LeSports’ failure to pay a tranche of the money.
A week later PPTV, the video streaming site owned by Suning, a Chinese electronics retailer, secured exclusive digital rights to soccer's Chinese Super League in a one-year deal with CSM, worth a reported Yn1.35 billion to live-stream all 240 matches this season.
A year ago, LeSports had signed an exclusive five-year deal with CSM to live stream every CSL game in high-definition. It was reported to be paying Yn2.7 billion for the CSL rights in 2016 and 2017 alone, and announced plans to launch a subscription offering.
At the end of last year, LeSports struck a compromise agreement with the Super Sports Media agency over the payment of instalments for rights to English soccer's Premier League, after running into financial difficulties following its lavish spending on rights.
LeEco has amassed rights to hundreds of properties in an astonishing spending spree, but has suffered problems in meeting payment deadlines and has admitted to "overextending" itself.