PPLive Announces Suspension of Serie A Rights Deal as China’s Major Sports Media Platforms Undergo Business Overhaul

Chinese digital broadcaster PPLive announced on Friday that broadcasting of Serie A football and FA Cup has been suspended due to disagreements between PPLive and IMG. (Source: Kyro Sports)

Chinese digital broadcaster PPLive announced late Friday that the broadcasting of Serie A football and FA Cup has been suspended due to disagreements between PPLive and IMG, amid a broader repositioning of content across China’s major sports media platforms.

Schemes to protect the rights and interests of members during the suspended rounds have been applied, according to PPLive’s announcement posted on its app.

PPLive has been in year-long negotiations with IMG, which holds the global media rights to the Italian top-flight soccer league, to seek delay or reductions in their rights payment following a large impact on the platform’s business due to the Covid-19 pandemic. Although PPLive was still making payments, it refused to pay the high prepayments required by IMG, according to people familiar with the matter.

Broadcast rights agreements around the world have been hit by interruptions to sport event schedules and normal programming due to the pandemic.

At the same time, Serie A had previously refused to give any leeway to broadcast rights holders including Sky Italia, DAZN and IMG, and demanded payments be made for the final installment of the season. PPLive has been required to make monthly rights fee payments to IMG.

IMG has also breached the license agreement and signed the broadcast rights to a third party without the permission of PPLive, which had an exclusive deal, the sources added.

Compared with how mature sports markets are run overseas, experts and analysts said China’s sports industry more or less lacked coordinated management and operation, which created obstacles during the commercialization process and drove the industry towards a bubble period of disorderly expansion over the past few years.

Recently, the trend of large corporations flocking to invest in the broadcasting rights of sports events had driven up costs, resulting in a “copyright bubble” that had burst due to the pandemic.

Additionally, ever-rising fees of media rights for premium sporting events have triggered an evaluation process among sports media platforms to reposition themselves.

Both Youku and Tencent Sports did not renew their contracts with the Chinese Basketball Association (CBA), China’s top professional basketball league, in October last year.

In September, the Premier League signed a short-term, cut-price deal with Tencent Sports for its 2020-21 season, a significant drop in rights fees from its previous three-year deal with PPLive that was reportedly worth around $650 million.

“PPLive will continue to dedicate itself to providing high quality services to fans, copyright holders and partners, and is committed to building a leading sports and health platform,” the company said.

In an internal meeting, PPLive President Wang Dong clarified the direction of the platform’s strategic development, saying that the company must “must actively transform and seek changes, develop a new ecosystem for health and sports, and build a new platform for social e-commerce.”

As part of the transformation, PPLive’s three core pillars of business will focus on traffic, revenue and its core sports retail operations.

The Serie A could face a broadcast suspension among China’s sports media platforms, analysts believe, as PPLive’s move could signify a broader reversal of sentiment when it comes to spending an extravagant amount of money on media rights deals.

At the same time, the rise of short video content and formats as well as the emergence of the country’s e-sports industry have been rapidly squeezing out long‑form TV and broadcast content.

Analysts said that as the largest mobile-first market, success will belong to whichever platform that can capture fragmented time of Chinese consumers.

Moreover, as consumers become more and more health-conscious, staying up till three in the morning just to watch a live broadcast of a football match has become a thing of the past.

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PPLive’s transformation comes amid a backdrop of renewed calls for the sustainable development of China’s sports industry. Just like any other business recovering from the pandemic, PPLive has taken a proactive approach in reinventing its business model and modifying its operations, promising a bigger, better platform for the nation’s sport fanatics and loyal viewers.

In the long run, with the copyright market returning to rationality as the general trend, the industry should welcome platforms such as PPLive and Tencent to take on copyright owners and rein in runaway costs.

Furthermore, from domestic copyright operators such as Tencent, iQiyi, PPLive, Youku and other platforms, it can be seen that it is unrealistic to balance the revenue and expenditures simply by operating the copyright of the competition. Of course, transformation is not achieved overnight, and it remains to be seen whether sports platforms like PPLive can generate real change and impact.