(Bloomberg) -- The English Premier League, soccer’s richest, has cashed in on a boom in the sport in China by signing a three-year television contract worth more than $650 million, according to a person familiar with the matter.
The deal is with digital broadcaster PPTV, a unit of Suning Holdings Co., the company that acquired a majority stake in Italian soccer team Inter Milan in June, according to the person, who asked not to be identified because the terms are private.
The agreement is worth about 12 times more than the current accord for TV rights in China. It starts with the 2019-20 season, the person said. The Premier League declined to comment. PPTV didn’t reply to an e-mail seeking comment and Suning didn’t immediately respond to a request for comment sent by text message.
The pact is likely to be the league’s biggest overseas television contract and follows a surge in soccer spending in China, which was triggered by President Xi Jinping’s desire for the country to build a sports economy around soccer.
“What we have now in China that we didn’t have even three years ago is this massive competition for sports properties that’s driving prices up,” said Mark Dreyer, the Beijing-based founder of industry website China Sports Insider. “While it’s still less than what broadcast rights go for in the U.K. or U.S., it is untested if Chinese consumers will pay to watch in enough numbers that these investments can be recouped.”
Shares of Suning Commerce Group Co., the listed appliance-retailer unit of Suning, rose 0.4 percent to 11.30 yuan as of 10:52 a.m. in Shenzhen trading.
Rights Sale
The Premier League made the rare move of starting a rights sale years before the expiration of its current deal in China with Super Sport Media Group. That agreement is worth as little as $18 million annually, after the league decided to target viewership rather than profit in China. The six-year deal signed in 2012 came after an ill-fated three-year contract with a pay-TV operator that saw some matches attract fewer than 1,000 viewers.
Some of the Premier League’s overseas rivals will be left smarting by the size of the current contract, the latest sign of the English circuit’s ability to out-earn competitors from Spain, Germany and Italy. The Premier League’s latest three-year television deals covering worldwide rights are worth more than 8 billion pounds ($9.9 billion).
There was “huge competition” for the rights in China, according to Richard Welbirg of TV Sports Markets, a researcher that follows the sales. Welbirg said PPTV will probably license some of its rights to online and pay TV operators. Under its agreements in China, the Premier League has also requested some matches be available on broadcast television.
PPTV, a video-streaming website, paid $270 million last year for the exclusive media rights to the Spanish soccer league La Liga. It also has licensing and distribution agreements with CBS studios and the professional wrestling league WWE.
RECOMMENDED FOR YOU
POPULAR