By Paul Nicholson
January 6 – The scramble for football properties and a foothold in China is gathering pace with the winning bid for a 50% stake in Chinese Super League (CSL) side Beijing Guoan expected to be announced in the next few days.
Rumours that the stake, held by Chinese institutional investor CITIC Capital, had been bought by online video company LeTV which is making rapid inroads into the sports rights sector and football in particular, were denied by the company.
LeTV did make a bid in December, alongside a number of other bidders, but the winning bid has not been unveiled. The rumour said that LeTV had acquired a 50% share in Beijing Guoan for 2 billion yuan ($307 million), but was denied by Lei Zhenjian, CEO of Letv Sports, who said he was in the US at the time and that this could not have happened.
CITIC is an active football investor, having partnered with CMC (China Media Capital) to buy a 13% minority shareholding in City Football Group (CFG), the Abu Dhabi-owned football investment firm that counts English Premier League club Manchester City as one of its clubs.
The $400 million investment valued CFG at $3 billion and the money will be used exclusively to provide CFG with a platform to break into China’s rapidly growing football market. At the time of the announcement in December it was unclear whether that push would include the acquisition of a Chinese Super League club by CFG to add to its other clubs Manchester City, New York City FC, Melbourne City, and Yokohama F. Marinos where it is a minority shareholder.
CFG owns a number of football related businesses that would benefit from access to the Chinese market and the new partnership was said to be “predicated on the opportunity to create new value for CFG in China and beyond by working with CMC, CITIC Capital and the Chinese football industry.”
The group says it has already been “working together, along with third parties, to identify and implement China-based initiatives for the CFG portfolio of clubs and companies.” Buying into Beijing Guoan would make sense and would bring the Chinese club into a wider global group with a significant foot in four continents.
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Letv Sports & Technology acquired broadcast rights for the Premier League in Hong Kong for three seasons from 2016-17 for a reported £400 million and has rebranded its acquisitive sports division LeSports.
The self-styled ” unicorn company in the Chinese sports market”, a “unicorn” being a business that achieves a valuation of $1 billion before its initial public offering (IPO) – expects to try to raise $500 million in a new fundraising. The company raised around RMB1 billion ($150 million) last in April.
The Letv management team currently owns around 21% of the company, while the biggest outside investors are Alibaba and Wanda with about 10% each.
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