CMC secures $1.3b China football rights deal

A CMC-backed entity called Tiao Power will broadcast the Chinese Super League - currently contested by 16 teams, which play each other twice over the course of a season - for five years. It won the contract from state-owned broadcaster CCTV, which has been paying RMB50 million per year.

Ruigang Li, chairman of CMC - and before that president of Shanghai Media Group - told the Financial Times that the price was high but still a fraction of the sums broadcasters pay for rights to England's Premier League, the NBA in the US and Spain's La Liga. He also did little to distance himself from reports that a CMC-led consortium is looking to buy control of Formula One from CVC Capital Partners.

CMC, which was founded by Li in 2010, is currently raising its latest media-focused fund, which is targeting $1 billion across US dollar-denominated and renminbi tranches. The previous US dollar fund closed in early 2014 at $350 million, with commitments from fund-of-funds and six corporations from the US, Japan and Australia. Before that, CMC raised a RMB2 billion local currency fund, which is now fully deployed.

Last week, the private equity firm agreed to form a joint venture with London-based Merlin Entertainments Group to develop a Legoland park in Shanghai. CMC already has a string of joint ventures with the likes of DreamWorks Animation, FremantleMedia, IMAX and Warner Brothers Entertainment. It helps these foreign companies navigate China's media and entertainment industry.

The arrangement with IMAX saw CMC and FountainVest Partners take a 20% stake in the US company's China subsidiary in 2014 for $80 million. They recently made a partial exit as IMAX China went public in Hong Kong. CMC helped IMAX China develop a new business line - such as building film theatres in luxury homes - and also launched a joint fund that invests in local movie production and distribution.

Speaking to AVCJ, Li said that CMC is no longer interested in traditional movie and TV businesses. Prospective portfolio companies must demonstrate the potential and capabilities to operate along the entire value chain - from content creation to distribution.

This emphasis on the media value chain is reminiscent of the strategies pursued by several Chinese companies, ranging from internet giants Alibaba Group and Tencent Holdings to property and movie theater conglomerate Wanda Group. Content - and in particular sporting content - has become highly prized.

Wanda recently acquired World Triathlon Corporation (WTC), adding it to a portfolio that already includes sports marketing firm Infront Sports & Media and a 20% stake in Spanish football club Athletico Madrid. On the domestic front, Wanda's activities include participating in a funding round for sports channel LeTV Sports.

A spin-off from Leshi Internet Information & Technology (LeTV), LeTV Sports owns broadcast and media rights to 121 events in 17 sports categories, with 4,000 matches for live broadcast. LeTV, which started out as a video-streaming platform before getting into licensing and production, picked up the Hong Kong broadcast rights to England's Premier League in September for a reported $400 million.

Meanwhile, Alibaba has set up a sports unit alongside Sina Corp. and Yunfeng Capital, a PE firm backed by Alibaba co-founder Jack Ma. Alibaba has forged partnerships with football clubs Bayern Munich and Real Madrid and with NBA star Kobe Bryant, and last year paid $192 million for a 50% stake in Chinese super league team Guangzhou Evergrande in June 2014.

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