LeTV Sports was terminated by the AFC, and the financial pressure exceeded expectations.

Content copyright is a core factor in the development of LeSports 'ecology. The early termination of cooperation seems to indicate that LeSports' financial pressure may exceed external expectations. How to quickly relieve the financial pressure is a major problem facing LeSports 'development.

Original title: AFC cooperation reimburses LeSports 'money shortage When will the copyright of

more than 300 events be suspended? It seems to exceed LeSports' scope. The discussion about copyright changes in the Super League's exclusive broadcast of new media has not stopped. On February 28, LeSports officially issued a statement admitting that its cooperation with the AFC was terminated and expressed its willingness to compensate users. Content copyright is a core factor in the development of LeSports 'ecology. The early termination of cooperation seems to indicate that LeSports' financial pressure may exceed external expectations. How to quickly relieve the financial pressure is a major problem facing LeSports 'development.

The cooperation made a "mistake"

on the same day that the Oscar "Best Picture" made a mistake, and LeSports also made a big mistake. On February 28, LeSports officially issued a statement announcing the termination of cooperation with the Asian Football Confederation (hereinafter referred to as "AFC"). The statement stated that the copyright cooperation previously signed by the two parties on events such as the AFC Champions League and the Top 12 Tournament will be terminated, and live broadcasts of relevant competitions will not be available on the LeSports platform.

The day before, the termination of cooperation between LeSports and the AFC had already been exposed by many media. However, on the same day, some media reported "LeSports 'Statement on Copyright of the AFC Champions League and Super League", which denied the termination of cooperation between LeSports and the AFC, and pointed out that LeSports and the AFC Football Association had on copyright such as the AFC Champions League and the Top 12 Games. Cooperation is proceeding smoothly.

In response to the statement, the reporter learned from LeSports that the denial statement on February 27 was not officially released by LeSports, and there is currently no specific explanation on how it appeared on the Internet.

LeSports and AFC reached a cooperation in October 2015. LeSports purchased the all-media copyright of all AFC events in mainland China from 2017 to 2020 for US$110 million, including the AFC's all-media copyright and signal production rights for 12 categories of events from 2017 to 2020, a total of more than 1000 games, including the 2018 FIFA World Cup Asian qualifying finals (Top 12), 2018 AFC Women's Asian Cup, 2019 AFC Asian Cup, etc. With the termination of cooperation, the rights to broadcast these events also changed ownership.

The AFC official announced on February 28 that it would cancel its four-year event broadcast rights with LeSports. Sports Sports Power will take over the offer to obtain all-media copyright and signal production rights for all AFC events in mainland China for a period of four years. However, the AFC did not announce the price of the deal.

The termination of cooperation has had a significant impact on many users who have purchased LeSports members. In response, LeSports also apologized to users in a statement on February 28, and also expressed its willingness to compensate users. For specific details, please contact the phone number 10109000. However, when the reporter called the above-mentioned phone number, the customer service said that a specialized technical department would contact the specific compensation matters within 48 hours. LeTV Sports Marketing Department said that specific plans are under study.

Financial pressure

is severe. The termination of LeEco's cooperation with the AFC is unexpected and reasonable. Since the second half of last year, LeSports has been under financial pressure. In the second half of last year, LeEco and Guoan broke up less than half a year after their marriage. LeEco said that they could not reach an agreement with Guoan on the core terms, and ultimately the two sides could not continue their cooperation in equity. Guoan hinted that the separation was due to LeEco's financial problems.

At the end of 2016, LeSports was reported to have a significant layoff. LeSports denied it and said that the company had completed new organizational changes and personnel adjustments, transforming the original four major business modules of media content, event operations, smart hardware and Internet applications into three major business groups. But at the same time, it was pointed out that the company will strictly adopt the last elimination system in the year-end assessment.

In addition, LeSports won the exclusive new media copyright for two seasons of the Chinese Super League for 2.7 billion yuan last year. Recently, news showed that due to funding reasons, the copyright may undergo new changes this year.

When talking about LeSports funding, industry observer Hong Shibin believes that funding pressure is the inevitable result of the rapid rise of LeSports content in the short term. In the past few years, LeSports has been one of the most sophisticated buyers in the sports industry. In Hong Kong, LeSports won the copyright of the 2016-2019 Premier League events for more than 200 million euros. In the mainland, the five-year new media broadcasting contract signed with ATP costs US$20 million per year, including US$110 million to win the English Football Premier League, US$300 million to acquire Octopus TV, US$100 million to name the Guoan Football Team, and US$2.7 billion to win the new media copyright of the Super League. The copyright cooperation cycle for these events often lasts for several years and requires regular payment of copyright fees. LeSports needs to pay a lot of copyright fees every year if it wants to maintain these events.

However, compared with the high copyright fees, LeSports 'revenue has not formed a reciprocal relationship. In terms of its own profits, according to LeSports data at the end of last year, the total number of LeSports members has exceeded 3 million since its launch in April. However, the main way of member growth is to buy members to send TVs and mobile phones. The real member fees are actually not accounted for. much. During this year's "9.19" fan e-commerce festival, LeE-commerce sales were 4.97 billion yuan, but the renewal amount of sports members was only 5.1 million yuan. Sports smart hardware and sports peripherals only contributed 20 million yuan and 1.9 million yuan in sales, which is a big gap with other mobile phone and TV business revenue.

An

uncertain future is more like a true reflection of LeSports's current predicament. Some industry insiders pointed out that behind the rapid growth of LeSports revenue is the rapid growth of LeSports content copyrights, many of which use high premium forms to obtain event broadcast rights, which has largely led to today's difficulties. A senior official of LeSports also said,"The domestic pay-for-viewing model has not yet been established and perfected, and the scale of advertising revenue is small, making it difficult to support the high copyright costs."

Previously, Liu Jianhong, co-president in charge of LeSports 'new media and online business group, told the media that in 2016, LeSports ranked first in all terminal UV numbers for a long time and became the number one media in Internet sports. Its operating income in 2016 was 6 times that of 2015., even higher than the five-fold growth rate in 2015. Based on LeSports 'revenue of 418 million yuan in 2015, this means that LeSports' revenue last year exceeded 2.4 billion yuan.

However, high revenue means higher copyright fees. This may explain why LeTV experienced financial pressure after raising 8 billion yuan in April 2016.

Event copyright has always been the key to LeSports 'rapid development and expansion. Liu Jianhong previously used three moats to describe the reasons for LeSports 'rapid growth, the first of which was copyright. "Before others could figure it out, we had already rushed in; when others were just about to rush in, we had already brought back all the copyright; when others paid a high price for the copyright, we were already considering the refinement of IP. Operation." Liu Jianhong said.

From the current point of view, LeTV has indeed achieved the first opportunity to snatch copyright, but it does not have enough funds to support it. Sun Hongbin, an investor just introduced by LeTV and founder of Sunac, said in a previous conference call: "LeTV Sports does not need to buy the Super League this year. I don't think it makes sense to pay more than one billion yuan for the Super League. There are 10,000 live broadcasts a year. It doesn't matter if there is no Super League."

Some practitioners pointed out that LeSports gave up cooperation with the AFC. If it combined with giving up the exclusive rights of the Super League, it is expected to save itself nearly 2 billion yuan in copyright expenses. However, the question is how big is LeSports's funding gap? This will directly affect LeSports's next operation. If funds are still scarce and new financing cannot be obtained in time, then LeSports 'copyright for other events may also have variables, which will directly affect LeSports' future development.

Editor: Nancy