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Samstag, 24. Dezember 2016

Football is booming in China

Eastern Promise – What Continued Investment in China Could Mean for Sponsors
Football is booming in China. Around 790 million Chinese fans followed the World Cup in 2014 and, as reported on these pages previously, will also profit from an investment by Suning Retail Group to provide online streaming of the English Premier League from the 2019/20 season. The sport is also being heavily supported by the government, to the extent where it is being made a mandatory subject at school. In addition, over 100,000 young hopefuls are already in the academy system and plans are afoot to expand the number of those academies to 50,000 by 2025; something to which SAP partners, Bayern Munich and Manchester City, have already contributed. The German champions recently agreed a deal to establish the “FC Bayern Football School” in Qingdao while Pep Guardiola’s side has partnered with the Ministry of Education to provide up to 30 coaches in football academies across nine major cities.
The huge interest in football has helped the Chinese Super League (CSL) to grow dramatically over the last couple of years. Within 10 years the average attendance at games has doubled from 10,000 to over 22,000, with the objective of hitting 25,000 by the end of 2016 still a very real possibility. The clubs with the highest average attendance are Guangzhou Evergrande (45,889) and Beijing Guoan (40,997), surpassing a number of well-known European clubs’ figures, and helped by the influx of stars to the CSL at a cost of over €337 million in the winter of 2016 alone – more than any other league in the world.
Through central commercialization of sponsorship and TV rights, the CSL earned €95 million in the 2015 season. For example, the insurance company Ping An pays €20 million per season for the league title sponsorship while Nike signed a 10 year deal in 2009, paying €15 million per year. The overall figure will, however, increase significantly in the upcoming years as the league has just signed a new TV deal with China Sports Media worth €230 million per season. Including the CSL revenue, the 16 clubs generated around €440 million in 2015, averaging €27.5 million per club, which is slightly less than the €504.6 million generated in the 2. Bundesliga, Germany’s second tier, in 2014/2015. That said, there does remain a stark contrast between the top and bottom clubs in terms of revenue-generation, with only the likes of Gangzhou Evergrande and Shanghai SIPG turning a profit.
This may change in the future though as the positive development of the CSL is a great opportunity for sponsors. Many Chinese businesses, especially from the real-estate industry, sponsor clubs in order to increase sales and gain a political advantage over their competition. Similarly, as we have seen with the likes of CMC’s (China Holding Capital) investment in Manchester City and Suning Holding Group’s acquisition of Inter Milan, there has also been a significant level of foreign investment and external deal-making. The spotlight is well and truly on China and, with seemingly no let-up in investment and interest, sponsors also look set to profit in a way like never before.

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