LeSports could no longer air in China the Asian Football Confederation soccer games because it had defaulted twice in payments. It missed the January payment and one more deadline for its potion of a $100-million contract last week. The company owned the broadcast rights to the Asian Champions League, qualifying matches to the World Cup and the Asian Cup.
Missed Payment
Bloomberg reported that LeSports was given in mid-February to make the missed January payment, but it still could not, leading to the termination of its contract with the Asian Confederation. The confederation plans to initiate legal action to secure the funds.
The problem of missed payments could be explained by sports broadcasting in China becoming so competitive that media companies pay premium rates to good sports content. Some of the deals involve big businesses in China which help the media companies defray the high cost of top content. Even if some of the ventures are losing money right now, most of them hold on to the hope of enjoying profits later with growth in subscription and viewer numbers which never came for some media ventures.
Other Businesses Too?
It is not just the deal with Asian Confederation that LeSports, a subsidiary owned by billionaire Jia Yueting who also owns LeEco, a smartphone-to-taxi service, has allegedly been having difficulty in paying its financial obligations. In 2016, he admitted that his businesses expanded too fast and spread themselves too thing. As a result, LeSports laid off 10 percent of its staff in December on the grounds that the company needs to improve efficiency.
According to Nasdaq, the Asian Football Confederation said that China Sports Media would take over the rights to broadcast the soccer games for the rest of the 2017-2020 commercial cycle because it was left with no alternative except to terminate its contract with LeSports.