How can One Championship free itself from a financial chokehold?

Willis Wee, Terence Lee, and Joseph Gan co-reported for this story.

It hasn’t exactly been a rosy picture for One Championship this year. The sports media company had to lay off 20% of its workforce after live events – its bread and butter – were put on ice due to Covid-19.

But on the bright side, it secured US$70 million in funding, which, along with the retrenchment, extended its runway to around four years, according to Tech in Asia estimates.

Given all these, the big question remains: How can the company turn a profit?

One’s losses have been growing, although this is normal for any VC-backed company that is burning money to expand.

But here’s what all of us at Tech in Asia have been wondering: Why hasn’t One turned on its subscription or pay-per-view (PPV) revenue stream yet?

After all, it has a treasure trove of content, having held over 100 events and thousands of matches to date, and it could go down Disney’s route of charging fans a flat yearly fee for access to its historical content.

It could also emulate Ultimate Fighting Championship (UFC) by allowing viewers to watch exclusive live coverage of its events at a price.

One had actually attempted to sell PPV packages up until 2017, though it didn’t make much money from them, according to its financial statement.

But things have changed since then. In October 2018, One raised a massive US$166 million round from blue-chip investors such as Sequoia Capital and Temasek. And then there’s the US$70 million lifeline it got this year.

The company’s 2018 financial statement, which was the latest to be filed, has been subjected to scrutiny by naysayers, but its numbers simply reflect One’s early attempts to grow exponentially.

Exponential growth

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The calculations

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