TJ Sports and Huya $310M League of Legends deal is just another Tencent power move
TJ Sports and Huya signed a $310M League of Legends broadcasting deal what will see the latter earn exclusive rights to broadcast, distribute, and offer on-demand League content from the LPL, LDL and LPL All-Star event.
This is the second large broadcasting contract TJ Sports signs with a Chinese streaming platform, after a previous $113M deal was reached with Bilibili last summer. All these deals however, have something in common. Tencent – the worlds largest video gaming company.
Dealing with an open deck
Gaming giant Tencent isn’t particularly well-liked in the gaming world. Not only does the company have an offensively awful record of user privacy issues, they are also known to charge users incredibly high fees for in-game content, while also occasionally straight up ripping off other games if it suits them. Of course, they also legitimately own quite a few titles and franchises – among others, PUBG, Call of Duty and Honor of Kings. They are the largest gaming company worldwide by revenue, but also own stock in Activision-Blizzard and the like.
Well, the game company ultimately has very few redeeming qualities – chief among them their ownership of Riot games, the creator of League of Legends. Why is this relevant? Because despite owning the company outright, Tencent also entered into a partnership with them in TJ Sports, as an exclusive partnership to handle league operations in China. That joint venture is responsible for all things League of Legends in the Chinese region. It’s exactly that partnership also that just signed an expensive broadcasting deal with Chinese livestream platform Huya. This deal gives the company exclusive rights to broadcast, distribute, and offer on-demand League content from the LPL, LDL and LPL All-Star event.
It is, all in all, not a particularly unusual deal – until you realise that Tencent also owns a large part of Huya. In other words – Tencent just paid Tencent for the rights to stream a Tencent game.
What’s even stranger is that this isn’t the first time they’ve done this. The previous deal with platform Bilibili to stream all international events within China, including the World Championship, MSI and All-Star event was similar. Once again, Tencent is the 2nd largest majority shareholder in Bilibili. In other words, that deal too was Tencent paying Tencent money in order to stream Tencent content.
Additionally, Tencent is pushing to monopolize streaming entirely by merging Douyu and Huya, and we are not far off from a world where Tencent potentially puts Bilibili in that mix and fully owns the entire streaming market in China on top off most of the esports market.
Overall, it looks quite a lot like Tencent is shuffling money between its companies. Given the company’s incredible size and financial power, the few hundred million paid for the deal are actually a raindrop in an ocean to Tencent, but that doesn’t stop these deals from looking a little odd. That said, it does of course make sense that Tencent wants to keep League’s entire earning potential in-house.
The exclusivity deals cover just about everything, including promo videos, written content, replays, highlights, news and commentary – pretty much everything Chinese audiences might see of a League event through official channels. The new deal with Huya is set to run for 5 years starting in 2021, with only the video on demand section of it limited to three years. Tencent’s previous deal with Bilibili was similar, lasting from 2020 until 2023 for the aforementioned international competitions.