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Investments should be followed by promotions

By Liu Huayu 25 May 2016

Having  followed the development of the sports industry, it is obvious that media rights prices of high-profile events in China and beyond  are increasing rapidly. The ownership of NBA, La Liga and CSL’s media rights are no exception. And the president of Ti’ao Power, Li Yidong, who has acquired the broadcasting rights of CSL for RMB 8billion, is still continually asked many related questions.

Why do people pay so much attention to those astronomical figures? On the one hand, the final prices are astonishing. On the other hand, people have no idea of the logic behind those figures.

Apart from the high prices of broadcasting rights, the competition in professional leagues is getting increasingly intense, creating more pressure for the operation of the CSL. As the manager of Liaoning Hongyun FC Mr.Huangyan puts it, “It is difficult for the club to make ends meet. ”

The five-time CSL champion Guangzhou Taobao Evergrande FC show us the cruel reality again. According to the 2015 financial statements published by Guangzhou Evergrande last month, prime operating revenue for last year was 380m while the cost was 1.306b. In other words, Guangzhou Evergrande lose 953m last year which makes the goal ,“to make a profit for 2016” even harder to realize. After all, Guangzhou Taobao Evergrande surprisingly went out in the group phase of the AFC.

Real estate also plays an important part in the boom of investment in the sports industry and, among others,Lander Sports is widely known in that area. After their name-change Lander Sports has been involved in broadcasting, women’s football, outdoor sports and the operation of basketball events  successively. After the new year of the lunar calendar, a host of sports related companies were acquired by Lander sports, from which we can see the ambition of Lander sports to get their share of the sports industry.

Generally speaking, the sports goods industry is still the only one that makes a profit in the sports industry which implies a big gap between the condition of the domestic sports industry and the competitive performance-based sport industry in a narrow sense. Anyway, both the capital and people with special skills coming into the sports industry show the positive side of the Chinese sports industry.

Yutang believes that there is still a lot waiting to be explored in sports marketing in a narrow sense. The acquirement of all kinds of sports IP is only a start. It has to be followed by efficient marketing activities.

Proofread by Sean O Diobhilin

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