BEIJING—China is filled with sports fans, from President Xi Jinping on down. Now Chinese companies are betting big that those fans will pony up to watch their favorite teams.
Chinese media and Internet companies have struck big deals in recent months for the rights for everything from the Los Angeles Clippers to Spanish soccer-club matches, often paying many multiples to the prices they paid in the past. The companies are driven by a growing Internet audience and a new government push to promote professional sports.
“China is a huge market for us, and we are always trying to increase our fan base here,” said Ignacio Martinez Trujillo, general director of Spain’s La Liga soccer league, which this year struck a €250 million ($275 million) deal to show the games there. He said the La Liga professional soccer league is scheduling some games with popular teams like Real Madrid and Barcelona earlier for Chinese audiences.
Asked why La Liga struck its deal in China with an online firm rather than a traditional television broadcaster, Mr. Martinez Trujillo said, “they pay more than others.”
Industry figures say the bidding represents an increasingly lucrative revenue stream for global sports leagues and teams. But Chinese companies have yet to prove that sports fans will pay for even the biggest games and marquee names.
“All the money is suddenly rushing in and they are disrupting the rules of the game,” said Ren Wen, chairwoman of Hong Kong-listed sports media company Wisdom Holdings Group. “China’s sports industry is still very underdeveloped, and red-hot money will burn it, not ripen it.”
Tencent Holdings Ltd. earlier beat out Leshi Internet Information & Technology Corp. for the exclusive online five-year rights for the National Basketball Association in mainland China, in a deal that people familiar with the negotiations said was worth at least $500 million. For the 2014-2015 season, a handful of Chinese Internet companies paid $10 million to $20 million for game packages, according to SportCal, a London-based tracker of sponsorship and marketing deals.
Shanghai PPTV Media Tech Co., a Web company backed by electronics retailer Suning Commerce Group Co. , in August acquired the five-year exclusive all-media rights for La Liga in mainland China, Macau and Taiwan. Previously a mix of Chinese state and provincial broadcasters paid a total of $12 million for four-year rights, according to SportCal.
“We believe the football industry has huge development potential, and La Liga with its top-flight games provides us with a great strategic opportunity to explore and develop this intellectual property,” said Dong Li, head of PPTV Sports, the sports arm of the video site.
The biggest deal so far has been home-focused. State-backed sports distributor China Sports Media pledged 8 billion yuan ($1.26 billion) in September for the rights to broadcast China’s Super League on television and online for the next five years. By comparison, it paid only about 85 million yuan for the right to broadcast this year’s games, according to SportCal. The deal marks a bet on improved play from a soccer league notorious in past years for corruption and poor play.