Chinese video and live streaming company Bilibili announced that the company has agreed to share media rights for the 2020 League of Legends World Championship (Worlds) with Douyu, Huya, and eGame.
The precise financial terms of this media rights distribution deal were not disclosed.
In January, Bilibili was reported to pay ￥800 million yuan ($115 million USD) to Riot Games in a three-year agreement regarding Worlds media rights in China. Early this month, Bilibili officially signed a three-year strategic partnership deal with Riot Games endowing the company with exclusive Chinese broadcasting rights for Worlds, in addition to the Mid-Season Invitational (MSI), and All-Star event.
In China’s esports industry, this represents the first time that a Chinese company has successfully and legally acquired exclusive media rights, then distributed or resold it to other companies.
The copyright strategy is fairly common, both in traditional sports as well as in the film and television industries. A prominent example of this is IMG’s signing of a partnership deal with Premier League Productions (PLP) for the rights to distribute Premier League football content across European and Asian countries. According to global data analysis agency Newzoo’s newest report, overall revenue from media rights was predicted to decline this year, due to the delay and cancellation of large international tournaments. However, in the global esports market, projections suggest that media rights stand to serve as the second-largest source of revenue, swelling to a sum of over $163 million.
It should also be noted that Chinese conglomerate Tencent Holdings enjoys full ownership of eGame, in addition to holding large shares in Bilibili, Douyu, and Huya. Tencent is the second-largest shareholder in Bilibili, and the biggest shareholder in both Douyu and Huya. Given this, Bilibili will likely receive a large income from the deal in the Q3 2020, and audiences will have a wider variety of channels through which they can watch Worlds. Ultimately, these developments have reinforced Tencent’s status as the leading player in China’s live streaming competition.
On Monday, Tencent sent two preliminary non-binding merger proposal letters to the boards of directors for Douyu and Huya, seeking a stock-for-stock merger between the two companies. According to Douyu and Huya’s Q2 2020 financial report, the companies have a combined enterprise value of $8.9 billion, and 333.8M monthly active users (MAUs) distributed over both platforms. Douyu reported $45.1 million in profits in Q2, while Huya reported $32.1 million in profits.