Despite previous denials, ONE Championship’s losses have continued to increase significantly.
For the last few years, Bloody Elbow has obtained copies of ONE Championship’s annual financial statements to ACRA, similar to the SEC in Singapore. When the 2020 report indicated a $48 million annual loss, ONE Championship CEO Chatri Sitoyotton dismissed it as fake news.
“Let me just say this: If you believe everything you read, the internet is a dangerous place,” Sitoyotton said in September 2021. It seemed like one or two things I would point out. That is, it’s not worth dealing with. Again, I’m like, I want you to take your time and tell me the truth. ”
However, a year later, Group One Holdings, the parent company of ONE Championship, submitted updated financial statements to ACRA, revealing even larger losses in 2020 and a doubling of the losses in 2021.
ONE’s losses for 2021 now stand at $111 million, according to recent filings. This brings ONE’s total cumulative losses to $383 million as of December 31, 2021.
statement
| Year | 2021 | 2020 |
|---|---|---|
| Year | 2021 | 2020 |
| revenue | 67,698 | 56,797 |
| Cost of sales | -35,327.00 | -18,117 |
| Other (expenses/)income | -36,810 | 9,079 |
| marketing costs | -56,172 | -46,836 |
| Administrative and other costs | -50,280 | -49,401 |
| Impairment loss on trade receivables | -97 | -427 |
| Pre-tax loss | -110,988 | -48,905 |
| income tax expense | -56 | -265 |
| loss after tax | -111,044 | -49,170 |
The annual reports revealed $56 million in “marketing expenses” and $50 million in “administrative and other expenses” for the year.
These latest annual reports were signed on August 8, 2022 by two directors, Mr. Chatri Trisiripisar (Sitoyotton) and Mr. Tehua Fong, and certified public accountants Ernst & Young.
Increase in income?
ONE reported annual revenue of $67.7 million, a 19% increase from 2020’s $56.8 million. Most of its revenue comes from broadcast rights fees, totaling over $50 million in 2021, up slightly from $47 million the previous year.
The second largest source of revenue is sponsorship revenue, which totaled $9.2 million in 2021, a nearly 30% increase from $7.1 million in 2020. Digital platform earnings also saw a significant increase, from $1.75 million in 2020 to nearly $7 million in 2021.
However, it’s important to note that over 97% ($66.2 million) of ONE’s total 2021 revenue is comprised of goods and services that will be transferred “over time” in the future, according to deal street asia, which reported these latest filings.
group revenue
| revenue | 2021 | 2020 |
|---|---|---|
| revenue | 2021 | 2020 |
| ticket income | 86 | 105 |
| sponsorship income | 9,220 | 7,145 |
| Broadcasting income | 50,094 | 47,078 |
| Digital platform revenue | 6,969 | 1,754 |
| product income | 1,329 | 715 |
| total income | 67,698 | 56,797 |
Last year’s financial statements may differ from this new filing for 2020 due to changes in how broadcast revenue and marketing expenses were calculated based on a “pro forma approach.” An additional $8.6 million was added to broadcast revenue in 2020 offset by an $8.8 million increase in marketing expenses.
A significant portion of the reported capital and losses for 2021 is also due to the conversion of $72 million plus interest convertible notes issued in June 2020 into preferred stock in November 2021 at a valuation of approximately $93 million. This included $56 million as equity capital and recorded a $38 million fair value loss.
Is this sustainable?
ONE’s mounting losses were made possible by its ability to raise funds despite significant losses. The company started 2021 with a share capital balance of $274 million, but only $88 million in cash and fixed deposits remained. In 2021, the company raised an additional $243 million through the issuance of preferred stock, with $56 million through convertible debt.
As of December 31, 2021, the company ended the year with a share capital of $519 million, but reported only $172 million in cash and term deposits.
ONE’s CEO, Sitoyotton, has claimed that the company expects double-digit revenue growth in 2022 and profitability within three years. This is a recurring claim made by ONE executives over the years, yet their reported losses continue to grow.
The sweeping claims ONE has made to the public have yet to match the actual numbers they privately report to the government.
Given the more opaque business structure after its recent move to the Cayman Islands, this 2021 report could likely be the last financial statements made available to the public until or unless the company goes public.
