ESL signs deal to stream eSports on Huya in China

The Huya mascot on display at the New York Stock Exchange (NYSE) in New York, US. Huya had previously been a media partner for ESL, streaming events to a Chinese audience, and the tie-up could enable expansion in the vast Chinese market. — Reuters

Sweden’s MTG AB surged after its portfolio company ESL, the world’s largest eSports company, said it is partnering with Tencent Holdings Ltd-backed streaming platform Huya Inc to expand in the Chinese market for competitive gaming.

ESL’s majority owner MTG AB has entered into a binding term sheet with Huya, and plans to form a joint venture with the Chinese company. Huya will also buy US$30mil (RM126.62mil) worth of shares in the company, in a deal that will see ESL issue new US$22mil (RM92.85mil) in new shares and that gives the German company a pre-money enterprise value of US$425mil (RM1.79bil).

Shares in MTG gained as much as 25%, the most on record. They were trading at 94.2 kronor (RM40.26) as of 9.15am in Stockholm, giving the Stockholm-based company a market value of US$644mil (RM2.71bil).

MTG earlier this year spun off its TV business to focus entirely on gaming and eSports, the latter of which has grown rapidly in recent years but has yet to turn a profit. Expanding viewership is an important factor in making the business profitable by boosting sponsorship deals, increasing advertising revenue and selling media rights. In the first six months of this year, the business posted a 174mil krona (RM74.36mil) operating loss.

The companies plan to host local Chinese eSports competitions connected to the global ESL tournament calendar. ESL hosts tournaments and leagues where the top players and teams compete in games such as Counter-Strike: Global Offensive, Dota 2 and Overwatch. The agreement provides the company with a “strong partner” to “pave the way for successful ESL expansion into the thriving Chinese eSport and gaming market in due time”, MTG’s chief executive officer Jorgen Madsen Lindemann said in a statement.

Huya had previously been a media partner for ESL, streaming events to a Chinese audience, and the tie-up could enable expansion in the vast Chinese market. Huya is in fierce rivalry with Douyu for the position as the biggest platform for eSports streaming in China. – Bloomberg