Chinese live-streaming giant Huya has cut its licensing fees for broadcasting League of Legends esports events by almost 70 percent. The new deal will reduce the fees to 230 million RMB (about $32.8 million USD) for the next two years.
As reported by the Esports Advocate, Huya has entered into the second supplemental agreement with Tengjing Sports & Culture Development (Shanghai) Co., Ltd (TJ Sports). TJ Sports is the official organizer of the League of Legends Pro League (LPL) and a joint venture of Tencent Holdings and Riot Games, where Tencent owns 66% of Huya.
This new deal, which has been approved by the Huya’s Board of Directors and the audit committee, is lower than the previous fee of 300 million RMB ($42.8 million USD). The initial deal provided Huya with the right to stream the LPL in mainland China for the 2021 and 2022 seasons. However, a 2023 amendment made the rights non-exclusive and deprived Huya of sub-licensing rights, while including the rights for broadcasting the League of Legends World Championship until 2025. However, the overall fee was still cut down to 450 million RMB ($64.2 million USD) for this inclusion.
This latest cut in fees is a result of the current financial challenges facing Huya and its parent company Tencent. Huya’s 2023 financial report also showed a sharp decline in live-streaming revenues, which stood at 8.2 billion RMB ($1.17 billion USD) in 2022 and 6.5 billion RMB ($930 million USD) in 2023, down by 21.3%. The decline has been blamed on lower consumption of live-streaming services and increased competition in the market.
In the middle of this revenue decline, Huya is cutting its spending, seeking to cut costs by raising the bar for content purchasing and production. The announcement of the reduced fees comes just days before LPL teams start their trip to the League of Legends World Championship in Europe, with the event starting on October 3 with the Swiss stage.
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