The Premier League has eased immediate financial pressure facing clubs by signing up a new Chinese broadcasting giant just a fortnight after being forced to terminate a previous £564 million deal.
A one-year digital streaming agreement with internet giant Tencent may be worth as little as £20 million up front - dramatically less than the previous three-year contract with PPLive Sports International, which had defaulted on a payment during the pandemic. However, instead of paying a one-off fee to match the previous deal, Tencent have agreed to share profits on subscriptions with the league, which has assured clubs they will not be out of pocket by the end of the season.
Tencent had plenty of wiggle room to secure a relative bargain as PPLive had already paid 50 per cent of its previous agreement for this season. The league says it will also generate more revenue by offering other free-to-air broadcast packages in China this season.
After a turbulent summer, Richard Masters, the Premier League chief executive, and his director of broadcasting Paul Molnar had scrambled to secure a quick agreement after tearing up the previous deal over an unpaid £160m bill from PPLive’s parent company, Suning Holdings. Securing a deal to immediately match the previous agreement was described as "impossible" by industry insiders.
The likes of BeIN, the biggest overseas rights owner, had warned even before the pandemic that valuations may have peaked. Nevertheless, China remains one of the league's biggest television markets, and the replacement deal with Tencent includes a revenue-sharing agreement based on subscriber numbers.
Telegraph Sport disclosed two weeks ago how Tencent, a technology conglomerate recently rated as the world’s biggest video game company, and iQIYI, one of the largest online video sites, were among the leading suitors.
Tencent has 114 million video subscribers and a number of deals with sports groups around the world, including with the NBA. The Premier League said in a statement that its shareholders "unanimously agreed" to the new partnership which expires at the end of the season.
"From Saturday, supporters in China will be able to watch all 372 remaining Premier League matches live and follow the latest updates and news about their favourite clubs and players via Tencent’s digital platforms - including WeChat, QQ.com, Tencent Video, Penguin Live App, Tencent News App, Tencent Sports App and Kan Dian," the league said.
Tencent will make more than half of all matches available for free in China, with the remaining fixtures available on Tencent Sports’ membership service.
Masters said: “We are excited to have agreed this partnership with Tencent ensuring our supporters in China can enjoy following Premier League action throughout this season. We and our clubs have an extremely passionate fanbase in China and are looking forward to working with the team at Tencent to engage with fans in new ways over the coming season.”
Ewell Zhao, of Tencent, added: “In collaboration with the Premier League, Tencent Sports hopes to leverage its platforms and technology to bring the drama of Premier League matches to fans and share with them the passion and excitement of football.”
The deal comes against the backdrop of ongoing uncertainty over the return of fans. Top-tier clubs estimate they are losing £100m a month while delays continue. Domestic rights are set to be negotiated by early 2021.