Guangzhou Evergrande makes bold and short-term thinking move in logo switch

Chinese Super League (CSL) giants Guangzhou Evergrande Taobao FC lifted the AFC Champions League Trophy last Saturday following their win over 10 man Al Ahli in the final. They achieved this victory with a 1-0 win in the second leg in front of a stadium packed with passionate home fans.

Not long after their triumph, the 2015 AFC Champions League winners hit the headlines again, not only because of an impressive 2015 AFC campaign but also because of  the dispute over their sponsored logo switch before the match. The club changed their jerseys with an ad from Evergrande Life, a subsidiary insurance company of Evergrande Group, replacing that of Dongfeng Nissan, which reportedly paid around RMB110 million for the shirt sponsorship of the club.

According to their latest statement, Dongfeng Nissan, a joint-venture by Dongfeng and Nissan, will take legal action against the CSL side for the club’s “liberty of unilaterally changing and replacing the chest advertisement without our company's consent".

Having “made the bold move”, the club says the sponsor declined to reply to their previous request for the logo switch but they are open to negotiation on the issue. However, it “will be difficult (for Guangzhou Evergrande)to mend this situation with Dongfeng Nissan” as “it shows a lack of respect for the partnership” and “it demonstrates short-term thinking by the club”, commented Diego Valdes, a program director at the Sports Business Institute Barcelona. More importantly, the move has put the club’s sponsorship property in a “vulnerable commercial position”.

For John Duerden, the Asian football correspondent for several organs including The Guardian, what Guangzhou Evergrande did with their kit advertisement in “a big game in China and Asia with a large audience” was “strange and unprofessional.”  Moreover, “delivering a written request a minute before kick-off is unacceptable” and “the way it was done - that was shameful”.

Apart from the “bad effect” on the club, this kind of incident will definitely jeopardize the “reputation of Chinese football overall, and even your sports business industry”, said Magnus Berglund, a Swedish-based specialist in sports sponsorship. As he went on to say, it is hardly the right move by the club in the long run – what is more likely is that it was an opportunity for the club to cash-in fast.

In the eyes of Professor Simon Chadwick, who is currently a 'Class of 92' Professor of Sports Enterprise at Salford University Manchester, Guangzhou Evergrande’s move was seen by many “as breaching competition regulations, the law and business ethics”.

“AFC regulations stipulate that Guangzhou should have consulted with them before acting in this way. Legally too, the club should have discussed the matter first with its sponsor and secured their agreement before replacing their logo on the team’s shirts. Ethically too, this kind of move is not one that would normally be acceptable in similar such deals elsewhere in the world.”

However, “given Guangzhou’s rising prominence both regionally and internationally”, it is understandable that the Evergrande Group “was keen to secure the benefits of exposure and association with the club they part own”, the Professor added.

As successive 5-time winners of the CSL, the 6th most attended football league in the world in 2015, Guangzhou Evergrande, with a roster of international and domestic stars led by legendary Brazilian coach Scolari, have been a guarantee for attendances and TV coverage over the last few years. Guangzhou Evergrande is still “a successful property with dominance in the Asian market which will continue to make it an attractive option for commercial partners”, noted Diego Valdes. Additionally, “lifting the 2015 AFC Champions League trophy and participating in the upcoming 2015 FIFA Club World Cup in December “will give global exposure to the club and certainly help in it becoming a more attractive property for potential sponsors in the region”.

Seen by many as regionally attractive, Guangzhou Evergrande is actually eyeing a leading position on the commercial side of world football after being listed on the New Third Board. But “if the club is to secure global acceptance among commercial partners and football fans across the world, it is important that they comply with the norms and conventions that govern relations between club and sponsor”, declares Professor Chadwick.

However, above all, making this unprofessional and bold move means “it will take time to restore trust” between the property and sponsors, argues John Duerden. And to achieve the goal of establishing a century club, China’s state news agency Xinhua suggests the owners of Guangzhou Evergrande should “make money by honourable means”.

As Mr Berglund put it, “Sponsorship and the sports business is a relationship industry. Every word, every headline and every project defines your brand and your reputation. Therefore, it's extremely important to stay professional in all areas, especially if you want to grow globally.” 

Proofread by John Devlin

Special thanks to:

Professor Simon Chadwick | Class of 92' Professor of Sports Enterprise at Salford University Manchester | Visiting Professor in Sports Marketing at RMIT University and Molde University College

Diego Valdes | Program Director | Sports Business Institute Barcelona

John Duerden | Asian football correspondent at The Guardian, ESPN and World Soccer etc.

Magnus Berglund | Sports Sponsorship advisor, Founder of SportsBizTrends.com