Le Sports intends to use the new funds to buy copyright resources to pursue its strategy of building a complete sports ecosystem, including rights to sports matches and events. (Photo : REUTERS)
Le Sports, the sports arm of China's leading online video provider Le Holdings, received funding of $1 billion in its series B financing round, the biggest investment so far in China's sports entertainment industry, according to Chinese technology news portal tech.sina.com.cn.
Citing sources privy to the matter, the report said that Le Sports will hold a press conference next week to announce the completion of the financing. Other details such as the identity of the investors will be disclosed at the press conference, the report said.
The Global Times reported that Le Holdings declined to comment on the report when contacted.
Analysts, however, said that they expect Le Sports to use the new funding on media rights for sports events.
"The main purpose of its series B financing is to purchase copyright resources so that the company can continue to pursue its strategy of building a complete sports ecosystem," Chen Wei, an analyst with Beijing-based investment consulting firm ChinaVenture, told the Global Times on Monday, Feb. 15.
According to the report, Le Sports is aiming to establish an "eco-sports company" that runs athletic events, offers a content platform, serves smart devices, and provides other value-added services.
Le Sports has the rights to more than 200 sports events covering 10,000 matches, the company's website said.
Le Sports raised 800 million yuan ($123.17 million) in its series A financing in May 2015 which valued the company at about 2.8 billion yuan at that time. The lead investors in that round were Yunfeng Capital, a private equity firm established by Alibaba Group Holding's Jack Ma Yun, as well as Wanda Investment, a firm controlled by Wanda Group chairman Wang Jianlin.
Now, Le Sports' valuation has been increased to $4 billion as a result of the series B funding.
Chen said that the sharp increase in the company's financing and valuation indicates that the capital market recognizes the company. He added that sports entertainment sites will now earn profits from paid streaming, noting that Le Holdings has built up a big base of paying customers in recent years.
The report added that Le Sports has been investing heavily in the athletic sector after its series A financing. In January, the company announced a strategic partnership with U.S.-based Major League Baseball (MLB) for exclusive media rights to broadcast its games in China for three years beginning in Jan. 2016.
The company also announced plans on Jan. 25 to pay 39.2 million yuan for 56 percent of Sodasoccer, a Beijing-based soccer-oriented data company, and on Jan. 28, it acquired sports broadcasting platform zhangyu.tv for 300 million yuan.
Also in January, under a strategic partnership, Le Sports renamed Beijing Guoan Football Club, a professional soccer club, as Beijing Guoan LeEco Team.
The report mentioned that besides Le Sports, other Internet companies are also betting big on sports. It cited Alibaba's new sports business, Alibaba Sports Group, which was set up in Sept. 2015, and expected to integrate e-commerce, media, marketing, video, home entertainment and cloud computing. The move was aimed at forming a sports platform that will partake in different aspects of the professional sports industry which include sports copyrights, sports media, events and ticketing.
Alibaba also purchased a 50-percent stake in Guangzhou Evergrande Football Club in June 2014, and in late Dec. 2015, Suning Commerce Group Co. acquired Jiangsu Guoxin-Sanity Football Club.
