Interview of Manager of Ti'ao Power: insight into reform of Chinese football broadcasting rights

Chinese government has made a series of movements in reforming sports industry and football, aiming at increasing the value of the industry to 5 trillion yuan. It could be said that Chinese sports industry, football included, has a bright prospect.
On March 27, 2015, the Chinese Football Association announced that Ti’ao Power (literally translated) Sports Media Ltd., located in Beijing, won the bid for the broadcasting rights of Team China.

According to a source, the bid price could be ranged from 50 million yuan to 80 million yuan. This was a remarkable event in Chinese football. Who on earth is Ti’ao Power? Why did they spend so much money on the rights of Team China? We interviewed the general manager of Ti’ao Power, Zhao Jun (Ms), with interests in these topics.

The interview record, translated from Chinese, will be displayed as following.

Yutang Sports: We all know that the government has recently done a great job in football reform. As one of the important parts of the football reform plan, what do you make of the changes brought by the reform?

Zhao: As far as I know, the biggest change was the reform of Chinese Football Association (CFA). To be honest, the CFA did not stop being worried about the broadcasting rights allocation as mainstream media had dominantly been broadcasting matches of Chinese national football teams in the past until the newly approved governmental policy regulated that the core resources ought to be open in the market. Accordingly, the CFA announced that broadcasting rights of Team China would be decided through open bid. And finally the price of broadcasting rights increased several times than before due to stronger competitiveness. The market-oriented broadcasting rights of Team China will also free the CFA from making difficult decisions in resources allocation amid concerns from tens of millions of Chinese supporters.

Yutang Sports: Could we say this breakthrough initiated the reform in breaking the long-term monopoly of broadcasting rights in Chinese football?

Zhao: Honestly, arguments that there is broadcasting rights monopoly in Chinese football cannot stand as the different media platforms had been able to jointly broadcasting a series of matches, such as matches of the Chinese Super League (CSL), Chinese FA Cup, East Asian Football Championships and even Guangzhou Evergrand’s debut in FIFA Club World Cup. For instance, Ti’ao Power (literally translated) has been the agency of CSL broadcasting rights since the CSL was born, and satellite TV stations and new media have all managed to broadcasting the CSL. In other words, the open auction for broadcasting rights of Team China was not the first time that CFA was open to rights bidding. And it can be easily seen that there will be a violent battle among competitors in chasing the broadcasting rights of the CSL when the current deal expires later this year.

Yutang Sports: This time the CFA made the way for a new age of marketization in broadcasting rights of Chinese football by starting open bid for the rights to Team China’s matches. And what do you make of the decision made by Ti’ao Power to spend big amount of money on it?

Zhao: We pay continuous attention to the development of Chinese football and this might empower us to win the bid. As mentioned before, we have been focusing on the CSL since 2004, and a series of important league matches including Asian Cup, Asian Champions League and East Asia Football Championships since 2009. Team China’s broadcasting rights is the last piece of puzzle of Chinese football though there is no guarantee that we can stand out in biddings all the time.

Despite that the bidding price was higher than we expected, we are still confident in making money in the future by dedicated work from our team with the help of the rising new media and the improvement of Team China. More importantly, the investor has significantly supported us.

Yutang Sports: How will Ti’ao Power distribute the broadcasting rights to new media and traditional ones? Will it be decided by the offer price?

Zhao: Actually it does not matter whether it is new media or traditional media to broadcasting the matches of Chinese national football teams as both can be jointly used to spread the game to a larger range of audience. According to statistics, the number of people who watch matches of Chinese national football teams on TV is much larger than the people who watch on the Internet. Based on this, we will make our distribution policy in the pursuit of reaching more coverage.

Yutang Sports: As you know, there are cases in other countries that match broadcasting rights are sold in several packages, such as the Premier League. Will Ti’ao act in the same way?

Zhao: Certainly not. Because Team China constitutes of seven tiers of national football teams and bundling is the way to help the overall development of Chinese football in case no platform is willing to broadcasting those matches which people have little interest in.

Yutang Sports: How do you think of the future of paid TV and online live broadcasting?

Zhao: I can’t see it going well. It’s cruel for fans who would miss matches played by Chinese national team in World Cup qualifiers because they don’t pay for it. And we learn from the failed experiences of other paid TVs in China that we would not be able to get profits from it. So we won’t give paid TVs to the market.

Yutang Sports: What do you think of the position change of CCTV after Team China’s broadcasting rights was sold? Will CCTV become a common rivalry company or will it be somewhat different from others in the competition?

Zhao: As I said, I don’t agree with the argument that there is so-called monopoly by CCTV. CCTV has done a great job in enlarging fan base and TV viewership of many leagues including NBA, Bundesliga and Serie A since the introductions of them to China 20 years ago, when local TV stations and web TV were not as popular as now. And CCTV was not opposed to the rapid rise of online platforms where these matches could also be delivered to fans in recent years.

This time CCTV offered price for the broadcasting rights of Team China as rivals did. But CCTV still has great advantages in quality of personnel, technology, audiences, etc. You can’t rule out CCTV off this competition only if market competition doesn’t exist anymore.

Yet currently CCTV will not give away the broadcasting rights of major events like FIFA World Cup or Olympic Games. And other media, except CCTV, will be pressured to broadcasting this level of events. I believe others would do the same if they were in CCTV’s position. However, CCTV did fail to meticulously package the matches of Team China due to some certain reasons, one of which might be CCTV’s easy reach for these resources.

Yutang Sports: Thank you very much for your time.

Zhao: Thanks.

It is obvious that the reform in football will help improve Chinese football in different aspects. Firstly, broadcasting revenues will significantly increase the income of both Team China and CSL clubs, which will help them to invest more in youth players’ educations and grassroots football. Secondly, the open bid for Team China’s broadcasting rights reflected China’s determination to reform football and sports. Then, the marketization of football broadcasting rights will boost the development of media, contributing to the joint growth of new media and traditional media. Finally, the market competition will speed up the development of sports industry in China as more funds and talents will be attracted into this domain.

Based on the views mentioned above, we believe that Chinese football is developing toward a healthy direction.