More super sports business deals set to be scored
Golden era of diplomatic relations seen paving way for raft of new business, Hao Nan reports.
With China-UK diplomatic relations enjoying a mutually proclaimed “golden era”, sports companies in both countries are being urged by industry insiders and government to grab the chance to boost business ties and take them to the next level.
Liu Xiaoming, China’s ambassador to the United Kingdom, compared his nation’s sports sector to a “gold mine” in his speech at last year’s Telegraph Business of Sport conference, held on May 9-10 in London.
The country’s large population and stable economy are bonuses for the development of its sports industry and the market potential is great, Liu said.
An estimated 360 million people regularly participate in sports in China.
The total value of China’s sports-related industries was 1.36 trillion yuan ($212.85 billion) in 2014 and is expected to exceed 5 trillion yuan by 2025, according to the State Council, China’s cabinet.
The government initiatives to accelerate the development of the sports industry are also providing a strong impetus for change.
China is rolling out a “300 million people on ice” national campaign in the run-up to the Beijing 2022 Winter Olympics.
The General Administration of Sport mapped out a five-year plan (2016-20) for the sports industry, setting out the goals of building 10,000 multifunctional playgrounds in cities, 500 public fitness centers in counties, and 15,000 fitness facilities in villages and towns.
Chinese investors have been actively seeking business opportunities in sports with their British counterparts in recent years, especially after President Xi Jinping visited Manchester City’s Etihad Stadium during his state visit to the UK in October 2015.
That helped yield major deals in the past three years.
Chinese consortium CMC invested $400 million in November 2015 to buy 13 percent in Manchester City.
A leading Chinese digital sports media platform, Sina Sports, signed a multiyear deal with Manchester United in 2016 to make the club’s official television channel available to 108 million fans in China.
Beijing Sport University signed a memorandum of understanding with the University of East London in 2016 on expanding students and staff exchange channels in sports and promoting China’s soccer development from grassroots to the highest level.
An increasing number of British companies and investors have also been attracted by China’s sport markets, which feature huge potential and growing demand for investment, management expertise and technologies.
To better identify Chinese partners, UK Trade and Investment — a government arm of the British Embassy in Beijing which was replaced by Department for International Trade in July last year — set up a sports department at the embassy in September 2015.
It was designed to serve as a “bridge” for UK and Chinese sports companies, by boosting business communications and sharing resources.
In the light of China’s ambition to establish itself as a world soccer power, many British investors have chosen to invest in this field.
In 2016, Sky Sports bought the rights to the Chinese Super League, and England’s Premier League secured its biggest overseas TV rights contract with Chinese digital broadcaster PPTV.
“The importance of the Chinese market for football is growing, and the trend is reflected in the differences in brand value between those clubs that do well in China and those that are only starting to realize the country’s potential,” said Andy Moore, insights director of Brand Finance, a London-based brand valuation consultancy.
As a close partner of the Premier League, the UK embassy’s sports department said China could expect more investment from it.
Commenting on the Beijing 2022 Winter Olympic Games, the sports department said it will bring more business opportunities for Chinese and British companies.
The department said it would help China to introduce more advanced technologies, in terms of ropeway engineering and ice surface production and maintenance.
It added there will also be gains in other areas where British companies have expertise, such as financing, accounting, environmentally friendly technologies and the construction of marketing systems.