European soccer teams draws crowds and sponsors from China

Soccer has grown into a social phenomenon in China that is now reaching far beyond the bounds of mere sport. It has become the ultimate moneymaking machine. Eight teams from Europe's soccer elite traveled to China during July and August, to play in four different tournaments to cash in on the growing appetite for the sport in China.

On July 21 a crowd of Chinese soccer fans rushed through downtown Shanghai, chanting, "Super Bayern! Super Bayern!" They wore red uniforms like those of the Chinese national team, but they were supporting Bayern Munich, the club that recently captured its 25th championship in the Bundesliga, the first division of the German professional league. Manuel Neuer, goalkeeper for both Bayern and the German national team who won the 2014 World Cup, delighted the fans with an unannounced appearance out of the pitch.

The Shanghai event was part of the offseason lineup sponsored by German automaker Audi. The team toured three major Chinese cities on July 16-24. The club faced Valencia of Spain in Beijing, Inter Milan of Italy in Shanghai and local powerhouse Guangzhou Evergrande Taobao in Guangzhou. According to the German club, the three exhibition matches on average attracted over 40,000 fans -- more than double what the top local professional league matches drew during the last regular season. Besides, the Bundesliga champions raked in more than 10 million euros from their recent nine-day China trip, according to German newspaper Bild.

Audi is not only the major shareholder of Bayern; it is also the No. 1 brand in the Chinese luxury car market. The Chinese economy has been showing signs of a slowdown, but the club and the automaker share a common interest in further cementing their brand image in the major and growing market.

Jorg Wacker, Bayern's executive board member with responsibility for internationalization and strategy, said the club designed the tour to build up its profile in China and the rest of Asia. He claims the club has 400 million followers worldwide, and "90 million of them are in China." To add to the team's advantage, "last year's World Cup boosted public interest for Germany," where seven Bayern players were on the pitch in the final. Since soccer is the most popular sport in China and most of Asia, the club intends to expand its fan base and conclude sponsorship agreements with Chinese companies, like the one it signed with solar panel maker Yingli Green Energy Holding.

Italy's Inter Milan, another giant of the European game, meanwhile, sold a total of 92,000 tickets for the three matches it played in China.

Drawing sponsors

The ever-growing loyal fan base in the region is luring more corporate sponsors. Qbao secured a three-year sponsorship deal with Rayo Vallecano last year. Although no financial details were disclosed, Spanish media reported that Qbao paid 600,000 euros in sponsoring rights, subject to two conditions: The team's participation in a China tour and the addition of a Chinese player. Zhang's signing was confirmed during the tour.

Two-way street

Asian money has been making its way into Europe, not only as partial sponsorship deals but also for buying up clubs and other core assets.

Wang Jianlin, chairman of shopping mall operator Dalian Wanda Group of China, has been on a shopping spree in the sports market. After paying 45 million euros for a 20% stake in Spanish soccer club Atletico Madrid earlier this year, Wanda in February announced that it had acquired Swiss-based sports marketing company Infront Sports & Media, which holds the broadcasting rights for the World Cup in Asia.

At Wanda's semiannual meeting in Beijing this July, Wang explained his rationale for targeting Western sports assets. "There are hundreds of tennis tournaments globally but only five are under the meticulous care of the International Tennis Federation: Wimbledon, the French Open, the U.S. Open, the Australian Open and the German Open. Three Chinese cities are vying to offer international tennis tournaments. Their prize money may be even higher than that of the five top tournaments but not all top players choose to attend these Chinese tournaments when invited," he said.

That is because the points awarded for these tournaments, which determine the rankings, are nowhere near what the five major tournaments offer. "These resources are attainable only through mergers and acquisitions," Wang said.

Wanda, China's biggest operator of cinemas, has seen tremendous success in the growth of China's movie industry. "China's film industry posted growth of 35% for six consecutive years," he said at the semiannual meeting, but for the tycoon the "sports industry is even more valuable."

Other sports

Soccer dominates the scene, but other sports are also eager to win Asian attention. A.T. Kearney estimates the sporting events market in the Asia-Pacific totaled $9.7 billion in 2013, with soccer taking up the largest slice at $3.6 billion. In second place, however, is the "U.S. sports," including Major League Baseball.

Basketball is another U.S. sport that is beloved by Chinese. Daisuke Fukushima, executive manager of the sports business division, said that "I advise companies to either put up ads at the NBA matches or sponsor a local pro league to attract Chinese consumers' attention."

"In an era of economic uncertainty, what's clear is that the balance of global economic power is shifting to the east and south," PricewaterhouseCoopers said in its report on the global sports market outlook to 2015. Therefore, "sports will seek new revenues from the growing middle classes in emerging nations," including Asia.

Of course, there are negative effects as well; PwC also says that in Asia "there is already concern that the obsession with overseas [soccer] leagues ... may actually be stunting the development of local clubs and the game as a whole." However, the expansion of the sports market and corporate moves to capture growth are sure to continue in the foreseeable future.

Taken from Ecns & Asian Review