Chinese live-streaming platform Huya 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 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 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’s 20-F form.
Under the deal, Huya 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, which is also the world’s leading games publisher, holds a 37% stake in NYSE-listed Huya and that TJ Sports is a joint venture between Tencent and Riot Games, mainly focused on running and managing the LPL.
Last August, Chinese online video platform Bilibili 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 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 initiated a merger between Huya and Nasdaq-listed Douyu, another Chinese live-streaming platform, as the tech giant looks to dominate the domestic gaming and e-sports market.
After the transaction, Tencent will hold 51% of Huya’s shares and 70.4% of its voting power. Tencent is also the largest shareholder of Nasdaq-traded Douyu, 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.