Deal focus: CMC’s big ambitions for Chinese football
Having paid $1.3 billion for the broadcasting rights to domestic Chinese football, CMC Capital Partners is targeting better players, better production standards and broader market appeal
The Chinese government announced an ambitious plan this year to turn the country into a global football superpower within a decade. Initiatives include establishing a free-market mechanism for selling broadcasting rights in order to maximize revenue for organizers and participants. It sees a further boost in revenue coming from the integration of traditional and new media in covering the sport.
Against this backdrop, media rights to the Chinese Super League were put up for auction two months ago. Bidders participating in the final round included three state-owned broadcasters - CCTV, Shanghai Media Group, and Guangdong Television - plus CMC Capital Partners-backed Tiao Power.
Tiao Power emerged victorious after agreeing to pay a record RMB8 billion ($1.3 billion) to broadcast matches 30 matches a season - the league is contested by 16 teams, which play each other twice each season - for five years, starting from 2016. The deal is a massive increase from the roughly RMB45 million per year currently paid by CCTV.
"Perhaps many people are surprised that we are spending RMB8 billion," Yidong Li, Tiao Power's executive director, said in a statement. "But this shows our determination to obtain the rights and we feel confident in the future of the Chinese Super League."
The price is still a fraction of what international broadcasters pay for the rights to the NBA in the US, England's Premier League, and Spain's La Liga. However, in China the value of media assets is rising rapidly albeit from a low base.
Earlier this year, Tencent Holdings spent RMB3.1 billion to become the exclusive Chinese digital partner of NBA from 2016-2021. Previously, Sina Corporation paid RMB252 million for a two-year deal and before that it had a three-year contract worth just RMB132 million. Three months ago, China online video platform PPTV paid RMB1.78 billion to become the exclusive broadcaster of La Liga for five years in mainland China, Hong Kong, Macau and Taiwan across TV, digital media and other channels.
Then in September, LeTV Sports - a spin-off from Leshi Internet Information & Technology (LeTV) - picked up the Hong Kong broadcast rights to England's Premier League for RMB2.52 billion, covering the 2016-2019 seasons. The package is said to be about double the amount that Now TV, a Hong Kong pay TV operator controlled by PCCW, paid for the current rights.
The Chinese Super League deal, which will be financed through a CMC-managed investment platform rather than a traditional fund, is intended to provide enough firepower for clubs to import high-profile players from overseas. It is hoped this will boost the quality and appeal of the league. In addition, Tiao Power has drawn up its own five-year plan to improve the quality of production and broadcasting and also expand the sub-licensing portfolio.
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