China AND Football: World Sport'S Newest Superpower
China AND Football: World Sport'S Newest Superpower
A ND
FO OT B A L L
WORLD SPORT ’S
NEWEST SUPERPOWER
The global sports calendar is also increasingly littered with major events
in China. Formula One has raced there since 2004, the FIBA Basketball
World Cup is heading there in 2019 and in 2022 Beijing will become
CONTENTS
the first city to host both the summer and winter Olympic Games when
it plays host to the winter version. Given the size and fluidity of the
1
market and with new investments being made on a near-weekly basis,
a detailed understanding of the Chinese consumer is more vital 4 I T
HE CHINESE CONSUMER
than ever. This Nielsen Sports report aims to provide an outline of that Understanding the consumer must be at the heart
consumer, China’s media landscape and where domestic and inter of any global sports organisation’s China strategy.
national football fits into the picture.
2
8 I MEDIA
GLENN LOVETT DANNY TOWNSEND China’s media landscape has changed dramatically,
led by a new wave of broadcast groups.
3
12 I CHINA’S
FOOTBALL MARKET
The Chinese Super League is growing in
prominence and sparking international interest.
4
18 I CHINA’S INTERNATIONAL INVESTMENT
China is increasingly looking at global sport as
a tool to raise profile and enhance business links.
CO N SUMER
China is a global powerhouse and it is no surprise that the sports industry –
1.37
teams, federations, leagues and sponsors – are looking towards the
country and its 1.37 billion people and eyeing major growth opportunities.
As China looks increasingly outwards at the opportunities investment
in sport at a global level can open up, so the world’s leading sports
leagues and teams have recognised the potential that exists to engage BILLION
UNDERSTANDING THE CHINESE a large group of new fans and unlock revenue opportunities within
China. Technology is opening up direct access to the Chinese consumer POPUL ATION
CONSUMER – THEIR LOCATIONS, HABITS like never before, underlining the opportunity – in 2015, for example,
the CIA World Factbook estimated there are now 1.305 billion mobile
AND PREFERENCES – IS A PRIORIT Y phones in the country.
July 2015 est. CIA World Factbook
36.8
YEARS
AVERAGE AGE
MAJOR CITIES
75.41
YEARS
MILLIONS OF PEOPLE
million
LIFE EXPECTANCY
SHANGHAI 23.74
1.305
BEIJING 20.38
CHONGQING 13.3
BILLION
GUANGDONG 12.46 NUMBER OF
MOBILE PHONES:
TIANJIN 11.21
SHENZHEN 10.75
There are currently 1.3 billion mobile phones active in China. Source: CIA World Factbook
Football accounts for three of the top five most popular sports events COLOUR CODING INDICATES THE RATE OF CHANGE OVER THE LAST THREE YEARS
in China, with the FIFA World Cup and National Basketball Association
STRONG GROWTH STEADY GROWTH PRETTY FLAT SLIGHT DECLINE
heading the list. Table tennis’ world championship is the only other
31%
non-football event to make the top five.
In terms of sports overall, interest in football has been growing steadily 26% 21% 14% 34% 31%
over the last 3 years, and now stands at 31% of the urban population
OF URBAN CHINA aged 16–59. Basketball is the country’s most popular sport – the China
Basketball Association, the top-tier basketball league in China, was
IS INTERESTED founded in 1995, while the NBA has played games in the country for over
IN FOOTBALL a decade – ahead of traditional favourites, table tennis and badminton. CYCLING MOTORSPORT MMA SWIMMING FOOTBALL
1 2 3
106 106
Source: Nielsen Sports (Urban China), May 2016
FC INTERNAZIONALE AC MILAN
REAL MADRID
680
such as Tencent’s QQ, WeChat, Sina Weibo plus retail and e-commerce,
smartphones and games.
Of China’s 1.37 billion population, there are currently 680 million active
internet users, with 653 million of them active users of social media. MILLION ACTIVE
577 million of those people are active on social platforms via a mobile.* INTERNET USERS
1 2 3
82% 27%
79%
Celebrations during a live screening of the Super Bowl in Shanghai. Source: Nielsen China
China’s new breed of digital broadcasters are now investing heavily in domestic and international sports rights,
JANUARY 2016 MAY 2016 to drive subscriptions and help showcase their other services. The major players in an increasingly competitive
Sina Sports – ‘long-term strategic Tencent – nine-year marketplace are developing long-term, mutually beneficial partnerships with teams, leagues and events looking
agreement’ with the UFC, including partnership with FIBA, to raise their own profile and attract new viewers and fans in the country.
live streaming of UFC events international basketball’s
JANUARY 2015 in China and a website relaunch. governing body, covering
Tencent – NBA; five-year partnership two editions of FIBA
extension described as the ‘league’s Basketball World Cup and
largest international digital partnership’. other international events.
1/2015 5/2016
PLATFORM PREFERENCES Charlotte Hornets take on Los Angeles Clippers in a 2015 NBA pre-season game in Shanghai Tencent is the league’s Chinese digital partner.
THE CHINESE SPORTS PLATFORMS MOST FREQUENTLY USED TO ACCESS INFORMATION ABOUT SPORT. TENCENT SINA SPORTS LEECO
A nine-year partnership with FIBA, As well as an agreement with UEFA, Formerly Letv, the online media
WHICH OF THESE PLATFORMS world basketball’s governing body, in Sina is in the first year of a multi-year company has secured an enviable
DO YOU FREQUENTLY USE TO FOLLOW SPORTS? May 2016 followed a five-year tie-up partnership with Manchester United – portfolio of broadcast rights to
with the NBA which includes live a tie-up which revolves around international events including
1 TENCENT 69% 5 PHOENIX SPORTS 32% 8 NETEASE SPORTS 27% streaming and related programming the distribution of the club’s MUTV agreements with Wimbledon, Tour de
across Tencent’s suite of apps and channel. In January 2016, the digital France, the US Golf Association, the
2 SINA SPORTS 57% 6 LE SPORTS 30% 9 HUPU SPORTS 24% websites. Tencent shares rights sports media platform signed a International Equestrian Federation,
to UEFA Champions League games long-term strategic agreement with the Football Association and,
3 CCTV5 WESBITE 38% 7 YOUKU SPORTS 27% 10 PPTV SPORTS 23% in China with Sina Sports, while the UFC. through a sub-licensing deal with
it also has a major content-sharing Super Sports, the Premier League.
agreement with ESPN.
4 SOHU SPORTS 36%
Source: Nielsen China
$813
sponsorships, inside and outside the country.
STRATEGIC GOALS
In October 2014, China’s government, through the General Administration
of Sport in China, outlined its plan to build a CNY5 trillion (US$813 BILLION SPORTS
billion) sports industry by 2025, a strategy which involves everything INDUSTRY BY 2025.
from promoting fitness, to encouraging foreign investment in sport
by opening up previously complicated administrative approval processes.
It is against this backdrop that a multitude of Chinese companies,
including headliners such as Wanda Group, Alibaba Group and property
giant Kaisa Group, which has created a multi-billion dollar fund
designed to assist with the construction of new sports facilities in the
country have invested.
Football is now part of the schools system in China, with major clubs
and their owners investing heavily in developing grassroots initiatives
and facilities – Guangzhou Evergrande, one of China’s most established
professional outfits (its outlay on international transfers was twice that
of any other club in the Chinese Super League in 2015, according to FIFA
TMS), has partnered with Real Madrid to develop a 50-pitch training
CHINA WANTS ONE
academy.
FOOTBALL PITCH
3 In April 2016, the Chinese Football Association unveiled its own plan FOR EVERY
10,000
for the country to become a ‘world football superpower’ by 2050,
with the aim of building participation levels and rapidly increasing the
CHIN A’ S
number of training centres and pitches across China – specifically
one football pitch for every 10,000 people by 2030. At a professional
level, performance targets have been set for the men’s and women’s PEOPLE BY 2030.
FO OT B A L L M A R KE T
national teams.
An all-action Chinese Super League encounter between Hebei CFFC and Guangzhou R&F in March 2016.
E
D
A BEIJING
GUOAN
CITC Group 2014 TO 2015 CHINESE SUPER LEAGUE
(state investment company)
B CHANGCHUN
YATAI G HEBEI
CFFC L SHANGHAI
GREENLAND
SPENDING BY ALL CHINESE CLUBS ON BIGGEST PLAYER TRANSFERS
Jilin Yatai Group China Fortune Land Development SHENHUA
PLAYER TRANSFERS
(real estate, coal mining, securities)
H HENAN
JIANYE
Greenland Group (developer)
1 2 3
C CHONGQING LIFAN Jianye Residential Group (real estate) M SHANGHAI SIPG TOTAL SPENDING, MILLION $ HULK ALEX TEIXEIRA JACKSON MARTINEZ
Lifan Group Shanghai International Port Group SPENDING ON PLAYERS
(motorcycles, cars, spare parts) I JIANGSU
SUNING (port operator) FROM EUROPE, MILLION $
Suning Appliance Group
D GUANGZHOU
EVERGRANDE (retailers, online retail) N SHIJIAZHUANG
EVER BRIGHT
TAOBAO Hebel Ever Bright Real Estate
Evergrande Real Estate Group (60%); J LIAONING
WHOWIN Development Co.
Alibaba (40%) Liaoning Sport Technology College/ 168.3
90.6
Huludao Hongyun O TIANJIN
TEDA
E GUANGZHOU
R&F Tianjin TEDA Group
44.0
101.8
Guangzhou R&F (property developers) K SHANDONG
LUNENG (state-owned enterprise)
TAISHAN 2016/17 2015/16 2015/16
F HANGZHOU
GREENTOWN Luneng Group P YANBIAN
FUNDE Zenit St. Petersburg Shakhtar Donestsk Atletico Madrid
Greentown China Holdings Limited (electric energy provider) Yanbian Sports Bureau/Funder
(real estate) Holdings Group (insurance) 2014 2015 SIPG JS Suning GZ Evergrande
Source: Nielsen Sports market intelligence Source: FIFA TMS Source: Nielsen Sports market intelligence
OPERATING IN CHINA INTERVIEW ▸ SIMON CHADWICK, Professor of Sports Enterprise, University of Salford, Manchester
Through a combination of digital tools (both the utilisation of social What’s your assessment of China’s growing influence in reciprocation – they trust you, you trust them – and both
media platforms and Chinese-language websites), pre-season tours and football? sides of the relationship win.
the development of local training camps and grassroots projects, the SIMON CHADWICK ▸ The club purchases, the acquisi-
major European football clubs have over the last decade built strategies to tion of agencies, the sponsorship deals, the inward invest- Are there opportunities for strategic tie-ups between
increase fan acquisition and retention in China. While the major European ment may seem to be football-focused, but ultimately it’s Chinese and European clubs?
leagues in which they play have developed broadcast strategies to ensure all about building an industrial sector over the next ten CHADWICK ▸ There will always be an element of com-
greater coverage of games in the country – Serie A was the first European years. Fundamentally, that’s what this is about. What the petitiveness in business, but there is a collaborative mod-
league to be broadcast in China in the late 1980s, a legacy of which is government is doing is to use football to drive China to- el of business too, and the world is full of collaborative
continuing high levels of support for major Italian clubs like AC Milan wards that vision. Within that, there is a particular view business opportunities. Perhaps this will force European
and Internazionale – Europe’s major clubs have also begun working with that if China can bid for the right to host the FIFA World football clubs to think more carefully about their business
local media partners to distribute club content or channels. Tie-ups Cup and then ideally win the World Cup then that will be models, their way of doing business, their way of conduct-
with local corporate partners in China have not only unlocked new revenue a key part of this move towards creating this domestic ing business and the way they formulate a strategy – espe-
streams but opened up new local market engagement opportunities. sports economy. cially in relation to China.
They are trying to build a sustainable and sizeable industri- Chinese football at the moment is engaged in competence
al sector – just as they’ve done in computing, with micro- acquisition. The Chinese are going through a period where
CASE STUDY chips and tablets, and just as they have in smartphones. they are acquiring competence. They are acquiring knowl-
We see it in scientific research, in space travel and even edge of how to run a football club, they’re acquiring FIFA
with military. It serves a number of purposes, notably eco- sponsorship so they can understand better how the global
BLAZING A TRAIL: THE NBA IN CHINA nomic and industrial strength, but essentially this is around governing body runs, they’re hiring players in order to up-
creating sports entities that will generate income for China, skill their domestic labour force, and if clubs were to think
The National Basketball Association has led the way in More than 760 million fans watched the NBA in China create jobs, create export earnings and then beyond that about it in those terms, it presents a commercial opportu-
terms of international sports leagues operating in China. during the 2015 –16 season. Media partners, including a maybe there will be an element of soft power and of spread- nity if they’re involved in this process of competence ac-
In 2008, the NBA announced the formation of NBA Chi- partnership of 30 years with CCTV provide fans with un- ing Chinese socio-cultural influence around the world. quisition. They just need to start thinking more laterally
na, a new entity to conduct all of the league’s business in precedented access to NBA games and content. Tencent, and creatively about the type of relationships they could
Greater China with five strategic partners: Disney/ ESPN, the league’s largest international partner streams 600 live How have European clubs’ strategies for growth in China have, and about how this impacts upon their strategies.
Bank of China Group Investment, Legend Holdings, Chi- games and content to hundreds of millions users on Ten- developed?
na Merchant Group, and Li Ka Shing Foundation. At the cent platforms each year. CHADWICK ▸ I think European football clubs have learnt How far away are we from seeing Chinese clubs think
time, then-NBA Commissioner David Stern said: “The op- about China, they’ve looked at the likes of the NBA and more globally?
portunity for basketball and the NBA in China is simply As well as regular promotional visits by league stars such learnt that you need to be more actively engaged in the CHADWICK ▸ It was extremely unhelpful that Guangzhou
extraordinary.” He added: “The expertise, resources and as LeBron James and Stephen Curry, the league has made coutnry, even with things like being available for auto- Evergrande got knocked out of the Asian Champions League
shared vision of these immensely successful companies China the centre of its annual pre-season Global Games graphs. There’s a greater appreciation beyond that for this season. Had they won, I think we were on the cusp of
will help us to achieve the potential we see in the region. series. October’s games in Shanghai and Beijing, involv- grassroots football projects, investment into community something quite significant happening: a Chinese football
The strategic investment from these companies will allow ing the New Orleans Pelicans and Houston Rockets, development. There is more sophistication there than 10 club being very prominent in several international markets
us to continue working with the General Administration of marked the tenth edition of the NBA Global Games in Chi- or 11 years ago. The way in which, for example, Bayern and gaining the potential to expand their business there.
Sports and the Chinese Basketball Association to grow na. The festivities around the NBA Global Games China Munich and FC Barcelona use social media in China is
our sport and emphasize, in both rural and urban Chinese 2016 included the fifth NBA Fan Appreciation Day, plus significant and I think Manchester City understand and Given the pace of what’s happening at the moment, given
communities, its contributions to fitness, healthy lifestyle NBA Cares and Jr. NBA community events. These double get much more what they need to do to be successful in the exposure that many of us now have to Chinese foot-
and an appreciation of teamwork.” up as activation opportunities for league partners, while China. Short-term, almost unilateral, approaches to foot- ball, familiarity will build. That process of brand familiarity
the NBA Global Games China series is presented this year ball there are likely to be largely unsuccessful. Clubs that and the building of some kind of affiliation with a brand
Today, the NBA is the most popular sports league in China by Master Kong; the NBA Fan Appreciation Day present- are going to succeed are those that engage in deeply- then leads on to loyalty. I think that will develop more and
▸
with more than 110 million followers on social media. ing sponsor is Dongfeng Nissan. rooted, mutually beneficial relationships where there is more within the next five years.
IN T ER N AT IO N A L
Investment from Chinese companies and individuals in sport outside
China, through acquisitions in teams, agencies, events and sponsor-
ship, is increasing, with activity in football, as the leading global sport,
IN V ES TMEN T
leading the way. The country’s influence on the international sporting
stage is growing.
8
itself as one of the world’s leading destinations for professional sailing;
Nanjing, meanwhile, staged the 2014 Youth Olympic Games to much
acclaim and will be one of eight Chinese host cities for the 2019 FIBA
Basketball World Cup. CHINESE CITIES
WILL HOST THE
Aside from the full or part acquisition of football teams across Europe,
Chinese companies are increasingly looking at football as a sponsorship 2019 BASKETBALL
platform – either at a global level, such as Wanda Group’s sponsorship WORLD CUP
of FIFA or smartphone manufacturer Huawei’s portfolio of sponsorship
deals with football clubs, or as a regional club or event sponsor.
Zhang Jindong, chairman of the Suning Holdings Group, announces Suning’s acquisition of Inter Milan in June 2016.
12/2015 F CITY
FOOTBALL GROUP 5/2016 J ASTON
VILLA
China Media Capital acquired 13% stake US owner sold to Tony Xia’s Recon Group
Source: Sponsorglobe by Nielsen Sports (deals active in 2015/16 only) Source: Nielsen Sports market intelligence
Just over a year later, in May 2016, another major sports rights agency
received significant investment from China. MP & Silva, specialists in
sports media rights sales, announced the creation of a ‘strategic
partnership’ with Chinese financial services company Everbright and
internet entertainment company Baofeng, through an investment from
Shanghai Jin Xin. Boafeng and Everbright now own 65% of MP & Silva.
ABOUT NIELSEN
That investment came just five months after Gestifute, the Portuguese
football agency founded by renowned player agency Jorge Mendes,
launched a ‘strategic partnership’ with Foyo Culture and Entertainment Co., Nielsen Holdings N.V. (NYSE: NLSN) is a global information and
a subsidiary of Chinese investment group Fosun International. The measurement company with leading market positions in marketing and
company, perhaps best known for representing Cristiano Ronaldo, consumer information, television and other media measurement,
aims to become a force in the transfer of players to and from China. In online intelligence and mobile measurement. Nielsen has a presence in
July, Fosun followed up its Gestifute investment by acquiring English approximately 100 countries, with headquarters in New York, USA and
second-tier club Wolverhampton Wanderers. Diemen, the Netherlands.