JTBC defaults on $15 million debt amid World Cup broadcast, faces 'emergency management'

JTBC, the broadcaster that secured exclusive rights to the North, Central American, and Caribbean World Cup, is facing a severe liquidity crisis. The company defaulted on a 20.6 billion won debt payment on June 11, the same day the South Korean national team achieved a comeback victory against the Czech Republic in a World Cup qualifier.

The broadcaster's financial difficulties stem from aggressive investments in major sports broadcasting rights, even as the media landscape shifts. Advertising revenue for terrestrial broadcasters has been steadily declining, projected to fall from 4.02 trillion won in 2022 to 3.003 trillion won in 2024 and 2.77 trillion won in 2025, according to the Korea Broadcast Advertising Corporation. This decline is largely due to competition from over-the-top (OTT) streaming services like Netflix.

Despite these market challenges, JTBC moved away from the traditional joint broadcasting rights acquisition model used by terrestrial channels and pursued exclusive rights independently. The company purchased broadcasting rights for the Olympics (2026-2032) and the North, Central American, and Caribbean World Cup (2026-2030) for a combined $500 million (approximately 700 billion won). The strategy was to secure live content and then resell it to the domestic market for profit.

However, this strategy has backfired. The terrestrial broadcasters declined to purchase rights for the 2026 Milan-Cortina Winter Olympics after resale price negotiations failed. For the current World Cup, only KBS and Naver signed broadcasting rights agreements. Considering JTBC bought the World Cup rights for $125 million (190 billion won) and resold them to KBS for only 14 billion won, the financial burden is immense. As of the end of the first quarter, JTBC's debt-to-equity ratio stood at a staggering 2,443.6% on a consolidated basis and 528.4% on a separate basis.

The liquidity risk has extended to JTBC's parent company, JoongAng Group. On June 12, NICE Investors Service downgraded JTBC's long-term credit rating from 'BBB/Negative' to 'CCC' (speculative grade). It also lowered JoongAng Group's rating from 'BBB/Negative' to 'BB/Negative,' citing the group's already strained finances due to the poor operating performance of its major affiliates and the increased uncertainty in fundraising across the group following JTBC's payment default.

In response, JTBC issued a statement acknowledging the liquidity crisis and announcing that it has entered a state of "emergency management" to improve operational efficiency. The company assured that its news and major sports broadcasting operations would continue as normal.

“

We have made every effort, including entering a state of emergency management for operational efficiency, to overcome the liquidity crisis. News and major sports broadcasting will all operate normally.