Sports a hard sell in mainland commercial league

PUBLISHED : Monday, 19 November, 2007, 12:00am
UPDATED : Monday, 19 November, 2007, 12:00am

The Olympic Games next year will be the most commercial in the history of the event, with the nation expected to provide a sporting platform to deliver big corporate bucks. Yet, amid all the Olympic buzz, domestic sport languishes at the bottom of the commercial league.

The China Basketball Association (CBA), possibly the most successful sporting league in the mainland, receives less than four million yuan per year for selling television rights to its matches. Broadcasting income for the Chinese Super League, the premier football competition, is just as bad.

Compare that to the United States' National Basketball Association, which recently signed an eight-year national broadcasting package worth US$930 million annually, or to England's football Premier League, due to pocket US$5.5 billion from worldwide media rights over the next three seasons.

With an impressive fan base - the CBA pulled in an aggregate 400 million television viewers last season - big sport in the mainland should be a money-spinner.

'With the world's largest single television audience, rising consumer wealth and a public passionate about the sport, China is an embryonic superpower of world football, whose market is now an essential part of any forward-thinking football brand's global strategy,' industry publisher Sport Business Group concluded in a 2003 report.

Fast-forward four years and China has just recorded its worst performance in the Asian Cup for 25 years, while the domestic league continues to suffer the fallout from a series of match-fixings, known as the 'black whistle' scandal.

Foreign sports marketing firms have jumped in, identifying the untapped potential of the mainland's sports market, hoping to develop a product that will be more successful both on the pitch and commercially.

Infront Sports & Media, a sports marketing company based in Austria, represents China's two most popular sports - football and basketball - at league and national team level, covering the marketing and the technical development of the national teams.

'China contributes almost nothing to the international company's revenues. In fact, we are still burning money, but it is still a developing model,' said Paul Wong, managing director of Infront Sports and Media China.

Insiders say Infront, which poured considerable resources into re-launching the China Super League in 2004, is bogged down by the bureaucracy and infighting that characterises the country's football administration.

'We spend a lot of money with sporting administrations helping them to get a product in place that we can then commercialise,' said Nick Mould, north Asia president of the Singapore-based World Sport Group, which helped create the mainland's first professional golf tour in 2005.

'Our revenues are very limited in China, and the country is years off being a major source of revenue for us,' Mr Mould said.

Golf is difficult to sell because it is relatively new, has little in the way of grassroots support and is played by a small, wealthy elite. Like all domestic sports, it also suffers from a lack of lack of television income.

As the only national sports channel, CCTV 5 has a broadcasting monopoly that gives it a stranglehold over domestic sport.

'CCTV has largely killed off the provincial opposition,' said Mr Wong, leaving just a handful of the richest regional broadcasters showing any sport on local television channels.

'CCTV 5 pays almost nothing for domestic sport. And in many cases they even charge to show it. If we had another national sports TV station it would make life much easier,' he said.

'Let's just say they're in a strong position,' said Mr Mould, pointing out that the China Tour has to pay CCTV 5 to air its weekly golf highlights programme.

Another difficulty faced by many cash-strapped sports administrations is a lack of domestic corporate support, which is where foreign companies frequently come into play. Watch brand Omega is the China Tour chief sponsor, Mercedes-Benz sponsors two premier tennis events and FedEx Corp kits out the national badminton team.

'Domestic companies do not know what sponsoring sporting events can do for them because there is no history of Chinese companies and sports sponsorship. It only commenced with the Olympics,' Mr Mould said.

The exceptions are China Mobile, which sponsors the basketball league and national team, and CCTV, which sponsors the national volleyball teams. No surprise then that Chinese television is awash with volleyball matches.

Paltry television revenues for other sports mean that sponsorship remains the only key source of income. 'The Olympics has made Chinese companies wake up to the fact that sport can be a good marketing platform,' Mr Wong said.

He said there were two key business considerations for any sponsor or company looking to profit from domestic sports: the popularity of the sport and the national team's performance.

'No fans, no money. The popularity of a sport depends on how teams perform internationally - and that's why we are struggling with football,' Mr Wong said.

Conversely, the symbiotic relationship between sport and business means that a good business model is often vital for creating sporting success.

The quality of top-tier English football, for example, improved immeasurably when the Premier League sold its media rights to the highest bidder - Rupert Murdoch's Sky TV rather than the state-owned BBC.

'If there was a genuine business association with mainland sports - with television, sponsors and successful local players - there would be a trickle down to the grassroots that might eventually produce greater success on the pitch,' Mr Mould said.