China’s success in hosting and competing at the 2008 Beijing Olympics is still being talked about and the country’s reputation as a sports leader continues to grow, even though it fell short of its medal goals at the recently concluded Rio Games.
The country has been shifting its sporting focus from winning medals to public well-being and sports business, setting the goal to create an industry worth 5 trillion yuan (US$750 billion) by 2025, when it is expected to account for about 1% of its gross domestic product (GDP), compared with 0.65% in 2012.
A few years ago, President Xi Jinping, a football fanatic himself, stressed the importance of football not just as a sport but as part of the economy, saying he wanted to build the world’s biggest sports economy.
“Ever since they announced that they want to be a global football powerhouse by 2050, the government has been really investing in a very big way in both the Chinese Super League from a quality of product perspective, the players they are buying, and the management and marketing of that league. These things have definitely improved dramatically even in the last 12 months,” says Claude Ringuet, managing director for Southeast Asia and Greater China at Nielsen Sports, a provider of sports analytics and insights.
Mr Xi’s comment was not just a political sound-bite. Political commitment has been strong, and when the government speaks, the private sector responds. A report from the sports and entertainment consulting group Gemba notes that 2,000 football programmes have already been established in Chinese schools.
Investment in sports properties abroad has also taken off, noted Mr Ringuet. The Wanda Group, a property development and media group controlled by Wang Jianlin, China’s richest man, is on an ambitious growth trajectory with the acquisition of the World Triathlon Corporation, the European sports and media agency InFront, and a stake in Atletico Madrid.
Last year, Shanghai-based CMC Holdings made a $400-million investment in City Football Group, the owner of Manchester City, New York City FC, Melbourne City and Yokohama F Marinos. And just this month, the storied Italian side AC Milan, once coveted by Thai investor Bee Taechaubol, was sold to a Chinese group led by the state-owned Development & Investment Corp for $826 million.
“There has been a huge amount of investment coming out of China in the business of sports and that’s not going away,” Mr Ringuet told Asia Focus in a telephone interview. “It’s magnified even more and more now as China continues toward taking a leadership role in the sports industry globally.”
Another country with potential as a sporting power is India. Sport is yet to be recognised as a major economic sector in the country of 1.2 billion, partly because there is only one major sport to speak of. But Indian cricket is having a huge influence on the game worldwide. Reports suggest that 80% of the International Cricket Council’s revenue originates from Indian sponsors and broadcasters, resulting in India being the key player in the global administration of the sport.
Mr Ringuet said there was a very significant gap between cricket and other sports, which have struggled to gain a foothold in the huge market there.
“In India and the subcontinent in general, cricket is the next thing behind religion. It’s really such a dominant sport in India that there is nothing really coming close to challenging it. It’s so strong,” he said. Historically, field hockey always been popular, together with wrestling and kabaddi, but cricket is far more well-entrenched.
The establishment of the Indian Premier League for cricket has created a massive competition for talent, with huge salaries and endorsement deals offered to star players. Established in 2007, the professional Twenty20 competition ranks sixth among all sports leagues worldwide in terms of attendance. The brand value of IPL is estimated at $4.5 billion and last year it contributed an estimated $182 million to national GDP.
Other new initiatives such as the Hockey Indian League, Indian Badminton League, Pro Kabaddi League and Indian Super League for football are also helping to change the face of Indian sports.
“In the last few years, other sports are trying to copy the Indian Premier League model by starting with a franchise model where you bid for it or you buy yourself a franchise, not through a traditional way where clubs start to get together and form a league. So if you are a wealthy individual, you own a football team or a cricket team,” says Marcus Luer, founder and group CEO of Total Sports Asia, a Malaysia-based sports marketing agency.
“The money paid to own a franchise was huge money that poured into the sport right away. It’s a good format because it has worked in India, as you’re going after people who have funding and passion for sports to grow it,” he added.
CVL Srinivas, CEO of GroupM South Asia, was quoted as saying in The Diplomat that the value of the Indian sports industry grew from 43.7 billion rupees in 2013 to 48 billion rupees ($713 million) in 2015 — mainly due to the emergence of new sporting leagues.
If hockey, kabaddi, badminton, tennis and football can emulate the success of the IPL, the sports industry could be the next big thing for India’s economy. The business potential is seen as tremendous, especially in the fields of marketing, management and sponsorship, exporting goods or apparel, as well as sports medicine and tourism.
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