Spent 850 million yuan to buy the World Cup broadcasting rights, the "godfather of variety shows" was scammed and went bankrupt.
Since the start of the World Cup until now, the South Korean team has been eliminated, and the South Korean TV station broadcasting this game has also encountered problems in advance.
Not long ago, JTBC, known as the "godfather of South Korean variety shows," was found to be in debt default because it failed to repay a due asset - backed securitization financing of 20.6 billion won (equivalent to about 92 million RMB) on time.
Two days later, the situation quickly deteriorated. JTBC and its parent company, Central Holdings, Contentree Central, Megabox Central, Central P&I and other five companies jointly filed an application for corporate rehabilitation with the Seoul Rehabilitation Court, which is the South Korean version of the bankruptcy protection procedure.
Vice - Chairman Hong Jung - do held a press conference in the JoongAng Ilbo Building, bowed to the public to apologize, and said that it was "unavoidable" to reach this step. Moreover, he guaranteed that the main businesses such as World Cup broadcasting, drama production and variety show production would continue and would not stop.
Such a comforting statement instead drew more attention from the outside world to another thing: Will the Hong family behind this TV station, which has created a series of hit dramas such as "Sky Castle", "Itaewon Class", "The World of the Married" and is known as the "empire of Korean dramas" and the "godfather of variety shows", also go bankrupt?
When a chaebol - affiliated media reaches the point of applying for bankruptcy protection, it involves not only an unrepayable debt, but also a series of stories about copyright gambling, family - business management and the survival mode of the traditional TV industry. Credit rating agencies quickly raised the risk level of the relevant corporate bonds to a very high degree. The market reaction was more direct than the apology at the press conference, and it turned this TV station's financial problem into an observational sample for the outside world to understand the South Korean media capital circle.
Started with Samsung
JTBC's origin can be traced back to Tongyang Broadcasting (TBC), which was established around 1964. The founder was Lee Byung - chul, the founder of Samsung Group, and a politician named Hong Jin - ki also joined him in running the media. The next year, they jointly founded the JoongAng Ilbo. One newspaper and one TV station formed the initial framework of the later "JoongAng Group". This cooperation only lasted for a while. After Chun Doo - hwan came to power, he implemented the policy of "unification, abolition and merger of the media". TBC was forcibly merged into the public KBS TV station, and the TV channels once owned by the JoongAng Group disappeared.
JTBC reappeared after 2008. The government of Lee Myung - bak revised the relevant media laws and regulations and abolished the rule that a newspaper could operate a TV station at the same time. In 2011, JTBC under the JoongAng Ilbo was officially launched and became one of the earliest comprehensive channels in South Korea. This time, the JoongAng Group didn't hand over the TV station to others.
The relationship between Hong Jin - ki and Lee Byung - chul later developed into an in - law relationship between the two families. Hong Ra - hee, Hong Jin - ki's eldest daughter, married Lee Kun - hee, Lee Byung - chul's son, who later became the chairman of Samsung. Their child is the current chairman of Samsung, Lee Jae - yong.
In other words, there is a cousin relationship between the current helmsman of the JoongAng Group and the helmsman of Samsung. The current vice - chairman of the JoongAng Group, Hong Jung - do, is the son of Hong Seok - hyun, the eldest brother of Hong Ra - hee. So he can call Lee Jae - yong his cousin. Lee Byung - chul once commented on Hong Jin - ki, saying, "I only set the basic guidelines for media operation, and other things are handled by President Hong." Therefore, the two were "brothers in weal and woe". This statement also explains to some extent what happened later: Both the JoongAng Ilbo and JTBC were founded by Lee Byung - chul, but decades later, the actual management rights all fell into the hands of the Hong family.
With such a relationship, JTBC didn't lack resources at the beginning. Samsung - affiliated companies have long been one of the biggest advertisers of the JoongAng Ilbo and JTBC. A mutually beneficial tacit understanding has been formed between the two: The media controlled by the Hong family provides public - opinion support for Samsung, and Samsung rewards the Hong family with a large amount of funds. Therefore, JTBC dared to invest a large amount of money in program production at the beginning of its broadcast, and gradually got rid of the dilemma of low ratings and low credibility at the beginning.
The real change took place in 2013. Sun Seok - hee was once a news anchor at MBC. In 2013, he switched to JTBC and hosted the "JTBC Newsroom" program. Three years later, his team exclusively tracked the Choi Soon - sil "cronyism in politics" incident that shocked the South Korean political arena, and directly led to the impeachment and arrest of then - President Park Geun - hye. This report enabled JTBC to surpass the three major terrestrial TV stations in terms of news credibility. In the following years, it successively launched hit dramas such as "Sky Castle", "Itaewon Class", "The Youngest Son of a Chaebol Family", as well as long - running variety shows such as "Knowing Bros" and "Please Take Care of My Refrigerator". Thus, the terms "empire of Korean dramas" and "godfather of variety shows" emerged in the industry and have been used ever since.
However, one of the conditions Sun Seok - hee put forward when joining JTBC was to ensure the independence of news reporting, without being affected by the stance of the JoongAng Ilbo, which belongs to the same consortium. Therefore, when JTBC reported on the Park Geun - hye case a few years later, it exposed the fact that Lee Jae - yong had bribed Park Geun - hye many times and sent the current chairman of Samsung to prison. The relationship between the Hong family, which had supported JTBC, and their nephew Lee Jae - yong became very tense during this report. This detail will be mentioned again in this bankruptcy reorganization event that happened a few years later.
Cheated in Betting on World Cup Broadcasting Rights
What pushed JTBC to the brink of default was a bold gambling on broadcasting rights that started in 2019. Previously, the broadcasting rights of major South Korean sports events were jointly purchased by "Korea Pool", which consisted of three TV stations, KBS, MBC and SBS. This mechanism had lasted for decades, aiming to prevent the copyright price from being inflated and to ensure that everyone could watch the games. JTBC broke the convention, directly contacted the International Olympic Committee and FIFA without joint negotiation with the three major TV stations, and obtained the exclusive South Korean broadcasting rights for the 2026 - 2032 Olympics through bidding. Then, it did the same thing and got the broadcasting rights for the 2026 and 2030 World Cups.
In total, JTBC spent more than 500 million US dollars on these deals. For the 2026 FIFA World Cup in the United States, Canada and Mexico, the broadcasting rights cost 190 billion won, equivalent to about 125 million US dollars, or about 850 million RMB. JTBC's initial idea was that this money wouldn't be wasted. Major sports events could enhance the influence of the channel brand, and it could also transfer the copyright to local TV stations without satellite signals to obtain distribution fees to cover the costs.
The actual situation didn't develop as planned. The 2026 Milan Winter Olympics was used as a pilot attempt, but JTBC failed to reach an agreement with any distributor, so it had to bear all the costs by itself. The distribution negotiation for the World Cup was also not smooth. JTBC proposed to ensure the "right of the whole nation to watch" and wanted to negotiate separately with the non - satellite TV stations among KBS, MBC and SBS, but the price difference had never been eliminated. In March this year, JTBC released what it called the "final negotiation plan", and MBC quickly responded, saying that it had no intention of negotiating and that JTBC had unilaterally broken the South Korean broadcasting rights market mechanism in 2019, disrupting the entire pricing system of the broadcasting rights market.
Finally, JTBC only reached an agreement with KBS, and the contract amount was about 14 billion won, far less than the initial procurement cost of 190 billion won. Even more ridiculous is that when the World Cup officially started, the ratings data didn't favor JTBC either. According to Nielsen (South Korea), during the first game of the South Korean team against the Czech Republic team, the national rating of KBS 2TV was 8.5%, while that of JTBC was only 5.7%. After three group games, the advertising revenue JTBC obtained was about 18.5 billion won, which was insignificant compared with the billions - of - won copyright investment. Meanwhile, on the Naver platform, which has the exclusive new - media broadcasting rights, the number of simultaneous online viewers once exceeded 4.8 million, which shows from the side that the viewing habits of the audience have obviously shifted to digital platforms.
Due to the failure of copyright gambling and long - term operating pressure, it soon showed up in the capital chain. Credit rating agencies repeatedly downgraded their evaluations of JoongAng - affiliated companies. JTBC was once rated as CCC, which is in the high - risk zone. Therefore, investors and creditors became more cautious, making it difficult for the group to raise funds through the capital market to repay debts. The JoongAng Group once intended to sell the JoongAng Ilbo Building, the JTBC Building and the studio in Goyang to recover funds, but the transaction was expected to be completed in August, which was far from solving the urgent problem. The 20.6 - billion - won due loan became the last fuse, and five companies almost simultaneously applied for corporate rehabilitation.
However, even though the Lee and Hong families have maintained an in - law relationship for six decades, Samsung didn't offer a helping hand in this crisis. The rift between the uncle and nephew mentioned in the previous chapter may partially explain this silence. The person who really decides whether to take action is not the blood relationship itself, but the unwritten accounts.
A Bigger Bill Than the World Cup
Is the Past Map of the Entire Industry
If only looking at the World - Cup accounts, JTBC's dilemma can be easily simplified into a story of "buying the copyright too expensively". However, if we take a broader view, we can find that this is a microcosm of the collective pressure that the entire traditional TV industry is facing under the impact of streaming media. In recent years, local South Korean audiences have continuously shifted from scheduled live broadcasts to on - demand platforms, and the advertising budget has also changed accordingly. Overseas streaming - media giants have occupied a large market share, but the cost of drama production has increased due to the high - price purchases of streaming media. Local TV stations are caught in a double squeeze of not being able to get the ratings bonus and not being able to retain the advertising revenue. JTBC is not the only struggling enterprise.
From this perspective, JTBC's move to spend 500 million US dollars to obtain exclusive broadcasting rights is essentially an attempt to use the strategies of the traditional TV era to face the changed market environment. In the past, exclusive resources were one of the most effective means for TV stations to build their own moats. Viewers had no other choices, and advertisers would pay for the scarce viewing time slots.
However, after the large - scale shift of viewing behavior to streaming media and new - media platforms, the bargaining power of exclusive broadcasting rights has been greatly reduced, which can also be seen in the comments of South Korean media. Some people analyzed that JTBC still believes that exclusive copyrights can bring sufficient profits, but it ignores the continuous decline in advertising sales and the dominant position of streaming - media platforms.
This crisis also exposed another problem, which is more worthy of attention in industry and investment reports. The fact that five companies under the JoongAng Group almost simultaneously filed for reorganization shows that there is a great correlation among these companies in terms of funds. Diversified family - controlled groups generally rely on mutual borrowing and cross - guaranteeing among subsidiaries to maintain cash flow. Once a default occurs in one link, the risk will be transmitted to the entire system through the relationship between equity and debt. The print - media part of the JoongAng Ilbo and the Megabox cinema part have also been affected by the digital wave, and being involved in the restructuring process together with JTBC this time also proves such a linkage effect to some extent.
For investors in the content and media fields, such cases actually provide a ready - made textbook. The value of copyrights and IP - related assets is easily inflated in a highly competitive environment. Especially, assets such as sports events are regarded as scarce and having certain returns, so they will attract buyers to compete at all costs.
However, buying the copyright is just the first step. Whether the value can be truly transformed depends on whether the distribution channels are unobstructed and whether the audience's attention still stays on the medium, which are exactly the factors most likely to be ignored in the bidding process. The internal governance structure of family - owned enterprises and the situation of related - party transactions are also parts that cannot be ignored in due diligence. The creditworthiness of a company cannot be judged only by looking at its own balance sheet, but by examining the health of the entire family - owned enterprise.
However, from the current situation, it hasn't developed to the worst. The purpose of the corporate rehabilitation program is to give the company a chance to renegotiate with creditors to avoid direct bankruptcy. The JoongAng Group has also stated that broadcasting, drama production and TV - station operation will proceed normally, and there won't be large - scale layoffs.
What JTBC is actually facing is a problem with the capital chain, not a collapse of content - production ability and brand value. Whether this TV station can continue to maintain its title of the "empire of Korean dramas" depends on whether this reform can be implemented smoothly. Whether the entire JoongAng Group can find a new way in line with the streaming - media era depends on whether it can get rid of the old methods of relying on exclusive resources and consortium resources.
This article is from the WeChat official account “Rongzhong Finance” (ID: thecapital), author: Wang Tao. Republished by 36Kr with authorization.