LeEco scraps deal for soc­cer club eq­uity

China Daily (USA) - - BUSINESS - By MASI and OUYANG SHIJIA Con­tact the writ­ers through masi@chi­nadaily.com.cn

Chi­nese tech­nol­ogy ma­jor LeEco said on Thurs­day its sports unit has can­celed an in­vest­ment deal with a ma­jor lo­cal soc­cer club, af­ter the two sides failed to reach an agree­ment on “core is­sues”.

Le Sports said it had paid the spon­sor­ship fees ac­cord­ing to the con­tract, but a dis­agree­ment with Bei­jing Guoan soc­cer club on “core is­sues” led to the col­lapse of an eq­uity part­ner­ship be­tween the two sides.

The Bei­jing-based firm signed a 100-mil­lion-yuan ($14.9 mil­lion) ti­tle spon­sor­ship deal with Bei­jing Guoan in Jan­uary. It was also widely re­ported that LeEco would buy half of the club’s own­er­ship for about 2 bil­lion yuan.

Luo Ning, the club’s hon­orary chair­man, said in an ear­lier in­ter­view that LeEco failed to pay the money needed to carry on an eq­uity part­ner­ship.

The soc­cer club, the Chi­nese main­land’s first pro­fes­sional one, was now look­ing for new in­vestors, he had said.

On Wed­nes­day, lo­cal tech web­site 36kr.com cited peo­ple fa­mil­iar with the mat­ter as say­ing that Ant Fi­nan­cial, the fi­nan­cial af­fil­i­ate of e-com­merce gi­ant Alibaba Group Hold­ing Ltd, would be one of the new in­vestors.

Ant Fi­nan­cial was not

value of the spon­sor­ship deal be­tween LeEco and Bei­jing Guoan soc­cer club

im­me­di­ately com­ment.

Founded in 2004, LeEco started as a video-streaming ser­vice provider akin to Net­flix Inc, but it rapidly grew into a tech heavy­weight with pres­ence in smart­phones, TVs and most re­cently, the sports in­dus­try.

Le Sports said in March that it had raised 8 bil­lion yuan from in­vestors, which val­ued it at 21.5 bil­lion yuan.

Shen Meng, di­rec­tor of Chan­son & Co, a bou­tique in­vest­ment bank in China, said the scrap­ping of the deal will have lim­ited im­pact on LeEco.

“Ev­ery one knows LeEco is good at mar­ket­ing. Though the deal was ended, LeEco has al­ready boosted its brand im­age and con­sumers’ aware­ness of its sports arm by as­so­ci­at­ing it­self with a ma­jor soc­cer club,” Shen said.

LeEco has been work­ing hard to ex­pand its pres­ence in the sports sec­tor, an in­dus­try that is re­ceiv­ing pol­icy sup­port from the cen­tral gov­ern­ment as lo­cal au­di­ences pay in­creas­ing at­ten­tion to ex­er­cise, fitness and health. avail­able for

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