Chinese companies invest heavily in broadcasting sports events

Chinese media and Internet companies have over the past few months signed significant deals for the rights to air everything from worldwide TV and film, to European sports matches such as the Spanish soccer league, La Liga. The companies are driven by a growing internet audience in China – the largest market in the world at 461 million video watchers – and government encouragement for the promotion of professional sports.
However, according to a Wall Street Journal report the market in China is still underdeveloped, and despite being the largest worldwide, industry revenue amounted to only RMB 24 billion in 2014, much of that from advertising.
Baidu Inc. says that it has more than five million paying customers for its video streaming service. The Chinese search giant signed a USD269 million deal this year to stream matches of popular teams such as Real Madrid and Barcelona from Spain’s La Liga and deliver them to Chinese audiences. “China is a huge market for us, and we are always trying to increase our fan base [there],” said Ignacio Martinez Trujillo, general director of La Liga. Trujillo added that the online search engine “pay[s] more than other” traditional television broadcasters.
While some industry figures say that bidding for broadcasting rights can be extremely lucrative for sports leagues and teams, others warn that there is little evidence to suggest that Chinese consumers will necessarily pay for the service.
Ren Wen, the chairwoman of sports media company Wisdom Holdings Group in Hong Kong, told the Wall Street Journal that “China’s sports industry is still very underdeveloped, and red-hot money will burn it, not ripen it.”
In August, Shanghai PPTV Media Tech Co. acquired the five-year exclusive all-media rights for La Liga in mainland China, Macau and Taiwan. Earlier in the year, Tencent Holdings secured a similar five-year deal for the rights for the National Basketball Association in mainland China – a deal which was estimated to be worth at least USD 500 million.
“We believe the football industry has huge development potential, and La Liga with its top-tier games provides us with a great strategic opportunity to explore and develop this market,” said Dong Li, head of PPTV Sports.
“China used to get content for free or at a very low cost, but now there is a serious shift as the broadcasters themselves are competing to get the different rights,” said David Hornby, sports director of Shanghai-based sports digital agency Mailman Group. “Prices will keep going up as long as the demand is there.” Staff reporter