England’s Premier League terminated its lucrative broadcast agreement in China, a move that could exacerbate the financial fallout one of the world’s most-watched sporting competitions is already seeing from COVID-19.
The league cut off access after its Chinese licensee withheld payment, according to a person familiar with the situation who asked not to be named because the matter is private. The value of the agreement has been reported at more than £500 million ($665 million) over three years.
The decision means Suning Holdings Group Co.’s PPTV, which held rights to a majority of Premier League matches in China, will not be able to show the start of the new season, scheduled for Sept. 12. The league is now seeking a new broadcast partner in China, according to the person familiar with the matter.
The Premier League did not offer further comment in an emailed statement. PPLive Sports International Ltd. — which signed the broadcast deal with the league, according to Chinese media — said on its Weibo social media account that it was regrettable the firm hadn’t been able to reach an agreement with the league.
“The global pandemic has brought many challenges, which manifest themselves even more during copyright negotiations,” PPLive said Thursday. Chinese state broadcaster CCTV, which has also screened some English soccer matches, could not be reached.
The league’s move to cut off access comes after CCTV relegated the matches from its main sports channel to one that lures fewer viewers. Ties between the United Kingdom and China have also deteriorated in recent months, with the U.K. banning telecommunications giant Huawei Technologies Co. and opposing a new security law imposed in Hong Kong.
“This development is taking place against the backdrop of increasingly sour relations between the U.K. and China,” said Simon Chadwick, director of the Centre for the Eurasian Sport Industry. “It therefore seems likely that there is some not inconsiderable politicking behind this decision.”
The breakdown between the Premier League and one of its largest overseas markets could have a major impact on club finances. Some of England’s top clubs, such as Manchester United, have millions of supporters in China and operate fan shops there.
After the pandemic led sports organizers around the world to cancel matches and start their new seasons in empty stadiums, some broadcasters have negotiated discounts for carriage rights.
Consultant Deloitte estimates that Premier League clubs are heading for a record pretax loss for 2019-20. The pandemic cost the organization and its clubs around €1 billion ($1.1 billion) in revenue for last season, according to the firm.
The Premier League has boosted its popularity in Asia substantially in the past few years, staging pre-season tournaments in the region. Manchester United and Tottenham Hotspur traveled to Shanghai for an exhibition game last year.
Some English clubs such as Manchester City, Southampton and West Bromwich Albion count Chinese tycoons or firms as investors. The Fosun Group, controlled by billionaire Guo Guangchang, owns Wolverhampton Wanderers FC.