Industry

Huya Lands Exclusive Rights for Chinese League of Legends Events in $310 Million Deal

Apr 28, 2021, 16:39pm2021/04/29 06:01:43 Kelsey Cheng

Chinese live-streaming platform Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> Inc revealed it has signed a $310 million media rights deal with the country’s League of Legends operator TJ Sports, according to a filing to the US Securities and Exchange Commission.

The five-year partnership grants Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> exclusive broadcasting, video-on-demand and distribution rights in China to the League of Legends Pro League (LPL), League of Legends Development League (LDL) and LPL All-Star event.

“On April 27, 2021, Guangzhou Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> entered into a license agreement for broadcasting League of Legends matches with Tengjing Sports & Culture Development (Shanghai) Co., Ltd., under which we purchased an exclusive license for e-sports during the period from 2021 to 2025 for a total consideration of 2,013 million yuan ($310 million),” according to Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />’s 20-F form.

Under the deal, Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> is allowed to also produce promotional videos and written content, such as replays, highlights, news and commentary based on TJ Sports-authorized League of Legends resources, Riot Games told The Esports Observer, which first reported the deal.

It is worth noting that tech giant Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />, which is also the world’s leading games publisher, holds a 37% stake in NYSE-listed Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> and that TJ Sports is a joint venture between Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> and Riot Games, mainly focused on running and managing the LPL.

Last August, Chinese online video platform Bilibili<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> signed a three-year media rights deal with Riot Games for all International League of Legends competitions, The Esports Observer added.

Founded in 2014 as a business unit of live-streaming platform Joyy, Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> fully spun off in 2018 and has grown into one of the most popular game streaming platforms in China.

The Guangzhou-based company’s net revenue in the final quarter of 2020 rose 21% to 3 billion yuan ($458 million) while net profit surged 59% to 253 million yuan ($39 million), according to financial results published in March. Total monthly active users on the platform reached 179 million in the quarter.

Last August, Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> initiated a merger between Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> and Nasdaq-listed Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />, another Chinese live-streaming platform, as the tech giant looks to dominate the domestic gaming and e-sports market.

After the transaction, Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> will hold 51% of Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />’s shares and 70.4% of its voting power. Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> is also the largest shareholder of Nasdaq-traded Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />, owning 38% of shares and voting rights.

The deal, which is still under review by regulators, will create a streaming giant with more than 300 million total users and a combined market value of $10 billion, according to an earlier report by Bloomberg.

In the meantime, China’s esports industry is expected to continue to thrive. According to market research firm Frost & Sullivan, the country’s esports industry could reach 537 million gamers by 2022, which will in turn benefit the video game streaming market.

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