Lynk Insights: Soccer Politics

President Xi Jinping’s 50-point plan in 2014, underscored his determination for sport to become a major driving force for China’s economic, and cultural development in the foreseeable future.

According to Chris Leung, a Lynk Knowledge Partner, and Senior Vice President at SECA Worldwide – a leading Chinese sports marketing agency – the government is making good progress, so far.

“Domestically they are investing heavily in the Chinese Super League (CSL) and Chinese Basketball Association (CBA).”

These domestic IP’s offer big businesses attractive investment opportunities. In the CSL, high profile companies are acting on this. Quanjian Natural Medical Group, for example, have spent ¥600 million competing in the CSL in 2016, and are on track to spend ¥1 billion in 2017, largely thanks to its advertising benefits.

Chris goes on to discuss the wealth of opportunities on offer, by stating that

“Progress is not limited to these popular IPs. Sizeable investments are also being made in badminton, squash and athletics, in an attempt to financially jump-start this revolution. Interest in international sports IP is also growing, with Beijing’s 2022 Winter Olympics set to build on the successes of the annual Shanghai ATP masters, and the Formula 1 Grand Prix.”

Sport is expected to contribute between 1.2%, and 1.5% of China’s GDP by 2025, with soccer seen by many as key to driving this growth. In an interview with BBC Sport, former, England Manager, and Shenzhen Football Coach attests to the progress made in such a short amount of time,

“It is an exciting place to be, and football is getting bigger, and bigger every day.”

On the other hand, this enthusiastic financial backing has led to what many believe to be detrimental side-effects, potentially including a financial bubble in the sports industry. As such, measures have been taken to moderate this growth. Threats to ‘name and shame’ reckless investors in overseas properties, and new regulations for CSL such as 100% tax on overseas talent, have both been implemented to attempt to insert stability. Yet, with previous spending totaling a record €388 million in the January-February transfer window, the true effectiveness of these measures is yet to be seen.

However, according to Chris, the future is bright for Chinese sport, and soccer in particular.

“The current growth estimations are actually very achievable, with some even considering them conservative. By 2025 the number of people participating in soccer needs to increase by 39%. To put that into perspective, participation in marathon running alone saw a 60% increase 2016. Soccer should have no problem reaching its next milestone.”

All signs point to China being well on their way to becoming the sporting nation President Xi envisioned, in 2014. Spending on sport-related entertainment goods and services grew 17.1% in the first half of 2017. Not only that but domestic IP’s such as the CSL still offers big businesses attractive investment opportunities. With high profile companies such as Quanjian Natural Medical Group spending ¥600 million competing in the CSL during 2016, and are on track to spend ¥1 billion in 2017, largely thanks to its advertising benefits.

Sooner rather than later, sport will capture more people’s imaginations, and contribute to their wellness, and prosperity. Soccer is just the start.

 

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