Should Fans be Worried about Forrest Li / SEA Losing Money?

You’ve seen the news. Sensational headlines about how Forrest Li’s wealth has crashed, and how he’s only worth US$4.7 billion now, as opposed to US$22 billion sometime back when SEA shares were worth a ton. (Only US$4.7 billion huh! How I wish I was worth even US$4.7 million haha)

For the longest time, these news, plus rumours and confirmed statements of SEA/Shopee employees being let go made me wonder – should we as LCS fans be worried? Will there be cost-cutting measures that will result in our players and non-playing staff leaving?

I tried to do some research myself. I downloaded the Corporate Compliance and Financial Profile of Lion City Sailors Private Limited off ACRA, and tried to take a look at the financials to see what they could tell me.

Well, ok that didn’t tell me anything much. First thing I noticed is this profile was perhaps purchased too early – 2022 hasn’t ended, so I cannot see the financial data for this year, which is when most of the drama happened at SEA.

But what could I make of the rest of the stats?

Some initial thoughts – if you zoom in on revenue, you will see that for 2020, we had S$3 million revenue, and the next year, we had S$13.6 million revenue. LCS is a private limited company so they do not need to disclose exactly to the public where they get their revenue from. But even from a rough estimate, you sense that academy fees, merchandise sales and ticket sales are not gonna give us S$13.6 million.

You can do some quick math if you’d like – but let’s take ticket sales. If you take an optimistic figure of 4000 tickets sold every game (the truth is far from this), then you’re still not cracking a million dollars if you take the figure and multiply it over 14 home games last season.

And how did our revenue increase from 3 million to 13.6 million over one year? Surely the re-opening of stadiums after COVID had some impact, but this was way too much. It is more likely than not that this is an injection from Garena Ventures Private Limited, which is the sole shareholder of LCS. Note also that Garena Ventures is a subsidiary of SEA Limited. This part may get confusing – I’ll address this later.

Anyway, the point is – there is nothing much conclusive I could see from the financial reports. So I knew I had to call in someone who knew way more about this than myself.

Enter Anthony, childhood friend of mine I’ve known since I was 7. Nowadays he is one of the hosts on a local financial podcast called The Financial Coconut, and I thought, hey, let’s get him to talk about the financial situation at SEA/Shopee/LCS and whether or not I should be worried.

Conclusion

Long story short – we shouldn’t be worried because from LCS’s statements, it looks like we’re spending 8 figure-sums max, tens of millions. That’s a fraction of Forrest Li’s net worth – that is also a fraction of the figures we’re talking about when it comes to SEA.

Anthony and I go into a deep dive in our podcast episode, and we even talk about how LCS could go about signing Cristiano Ronaldo if we needed to (haha). Do check it out! Click here – https://open.spotify.com/episode/4Tx8WeEOeVgvfdGVV28Gf3?si=6d8b3ed9491c4955

Oh, and may the best team win in the Singapore Cup final later!