Wanda Sports to aim for double-digit profit margin by 2020, says Wang Jianlin
The Chinese tycoon says cooperating with international sports federations, overseas M&A and profit-first mentality are priorities
Chinese tycoon Wang Jianlin said he wants the sports arm of his business empire to achieve a double-digit profit margin by 2020 so that it can be listed on the stock exchange.
The chairman of Dalian Wanda Group said generating profits is paramount for building a successful sports company, which is why the acquisition of expensive foreign sports clubs was not a priority in his “sports empire roadmap”.
“We don’t care about ‘face’. We just care about money,” Wang said, citing an entrenched tradition in East Asia that fear of losing face, or dignity, takes priority over fear of losing money.
Speaking at a sports industry forum hosted by Caixin, the Beijing-based media group, on Sunday, Jianlin shared his four-pronged approach to creating a profitable sports company. The four pillars of his system are: expanding partnerships with international sports federations, overseas mergers and acquisitions, importing major international sports events, and being profit-oriented.
He said Wanda Sports Holding Company, the sports unit of his Wanda empire, will strive to reach a profit margin of at least 10 per cent by 2020, in order to “present an exclusive, high-value, promising company to the capital market”, meaning one that is ready to be listed.
He stressed that as an emerging economy, China cannot challenge the status quo of the international sports landscape. It will have to cooperate with existing international federations and their rules, rather than creating something of its own.
This conviction is in full evidence in a series of moves Wanda Sports has made this year. Last Thursday, the company announced an agreement with Union Cycliste Internationale, cycling’s world governing body, allowing China to host UCI world tour races, starting in 2017.
In June, Wanda signed a partnership deal with basketball’s international governing body (FIBA) to oversee sales and marketing for the sponsorship and licensing rights for FIBA events globally. Wang also struck a deal with FIFA to hold the first China Cup international football competition in southern China in January 2017.
Wanda Sports’ cooperation with international associations includes those related to basketball, football, triathlons and badminton. Wang earlier vowed to introduce at least 10 major international sports events to China before 2020.
Wanda has been on a buying spree since 2015. Its trophies include Infront Sports & Media, one of the world’s largest sports media production and broadcasting companies; World Triathlon Corporation (WTC), the owner of the world’s famous Ironman triathlon brand; and a 20 per cent equity stake in Club Atlético de Madrid.
“Partnering world sports associations is our priority, through which we can gain licenses of international sports events. Many people think sports business is about buying clubs, that’s a mistake,” he said.