China Sports Business Weekly | 16 October
Welcome to the latest edition of the China Sports Business Weekly.
Here’s what’s been making the headlines this week: The NBA returns to CCTV5 after a year untelevised, Huya merges with DouYu to give Tencent streaming industry domination, Manchester United unveils first of five entertainment centers, Chinese Basketball Association brings on five new sponsors, ITTF announces Dishang Group as title sponsor, and we released the 3rd Age of Sport manifesto alongside Seven League.
In this week’s From The Top, we spoke with Sean Zhang, CEO & Co-founder at Talon Sports, where we discuss competing at the recent Lol Worlds, business opportunities in China, benefits of PSG partnership, and expectations for the China sports industry in the next 12 months.
Top Industry News
1) The NBA Returns to CCTV5
Following more than a year of no televised games on China's CCTV, Game 5 of the NBA Finals marked the league’s return to China’s only national-wide TV sports channels. NBA China also held three offline events as well as a fan viewing party for Game 4 at the Mercedes-Benz Arena leading up to Game 5. Read more on ESPN (English) and CCTV (Chinese) Mailman Take: It was always a case of when, not if, for the NBA to be back on national TV. Smart timing from CCTV with fan interest peaking to watch LeBron and the Lakers take home another championship. Standing out from this is comments made by Jian Yang, CCTV’s famous basketball commentator. He referenced the NBA’s revitalised efforts this year to CSR in China, substantial donations made during COVID-19, and well-received player messages of support. This tells us that respecting the culture, and showing face, is still of utmost importance in the country.
2) Huya Merges With DouYu to Create Live Streaming Giant
Huya, one of the most popular Chinese live-streaming platforms, will buy rival streaming platform DouYu in a stock-for-stock merger deal. Tech behemoth Tencent, Huya’s biggest shareholder which also owns over a third of DouYu, has been crafting out this deal for some time. The companies combined will have a market share of more than 80% in China. Read more on CNBC (English) and Xinhua (Chinese) Mailman Take: Tencent is the real winner here as China’s esports duopoly becomes a monopoly. The deal values the new platform at $6B, eliminates any external threat to Tencent’s dominance, giving the company more control over China's burgeoning esports landscape. 3) Manchester United Unveils First Entertainment Centre in China
The English Premier League club officially unveiled the first of five planned entertainment centres in China. The ‘Theatre of Dreams Centre’, located in Beijing near Tiananmen Square, is scheduled to publicly open this year. Developed alongside global entertainment group Harves Entertainment, the centre is the first to open with other locations set for Shanghai, Shenyang and Changsha. Read more on SCMP (English) and Xinhua (Chinese)
4) CBA Signs 5 New Partners, Extends 12
The Chinese Basketball Association has extended contracts with 12 sponsors and signed an impressive 5 new sponsorship deals. Of the 12 companies, these include China Life, TCL, and Migu, while new agreements for the new season are with water giant Ganten, China Mobile, and KuGou. Read more on Sports.cn (Chinese)
5) ITTF Brings On Dishang Group as Title Sponsor One of China’s largest manufacturers and exporters of apparel and textiles, Dishang has the role of title sponsor of next month’s 2020 International Table Tennis Federation Men’s and Women’s World Cups. Dishang Group’s HQ is in the port city of Weihai, Shandong Province, the location of the two events. The Women’s World Cup takes place on November 8-10 and the men’s tournament on November 13-15. Read more on SportBusiness (English) and ITTF WeChat (Chinese)
6) Arsenal Launches China Tmall Store
In cooperation with sports licensing ecommerce company Hangzhou Kayford Branding, the Premier League side has launched official operations selling products such as replica kits, training wear, fan wear and accessories. Read more on Arsenal (English) CRI (Chinese) 7) BVB and Stiebel Eltron Sign Regional China Partnership
The Bundesliga club and famous water heater manufacturer Stiebel Eltron have grown their existing partnership from the APAC region into China. Stiebel Eltron entered China 16 years ago and recently donated valuable water heaters to Wuhan during the COVID-19 pandemic. Tencent (Chinese)
In Other News
Qingdao Completes 10M COVID Tests in 3 Days Following New Cases
After new local cases were discovered in Qingdao, the government decided to test all the city’s citizens. Officials claim there are no positive results other than the ones they have announced. Read more on Tribune (English) and CCTV (Chinese)
Eleme Sponsors Suning Esports for LoL Worlds
The Chinese esports organisation agreed to a sponsorship deal with popular Chinese food delivery service Eleme for its League of Legends (LoL) team which is currently competing in the League of Legends World Championships in Shanghai. Eleme’s logo features on the right shoulder of the esports team’s jersey. Read more on Esports Observer (English) and Tencent (Chinese)
3rd Age of Sport
This week, alongside our colleagues at Seven League, we delivered a rallying cry to the sports industry in the shape of The 3rd Age of Sport manifesto & video. Read the full manifesto and watch the video in English and Chinese
From The Top
Sean Zhang, CEO & Co-founder at Talon Sports 1. How was the LoL Worlds experience this time in Shanghai?
PSG Talon's League of Legends team was formed as of November of 2019 and we are immensely proud of the work that has brought us to Worlds in 2020 given the short amount of time that we have been in the game. The whole journey if I am 100% honest has had a lot of ups and downs.
The whole COVID backdrop, visas and flight restrictions meant we had a lot of distribution to our player roster and preparation. However, I think in the end the results spoke for themselves, having topped our group in the play in stage and also being able to take some victories versus strong teams such as JDG, Roge and LGD shows that we have the capability to compete with the best. We look forward to returning to the World stage in 2021 and improve on the results that we have achieved this year.
2. What are the core business opportunities for you in China?
As of now, Talon's main focus is building out an esports platform which is focused on an APAC team. While China is not 100% our main focus, we still see the value of the huge potential of this market. Our objective first is to establish a footprint in the APAC market and then perhaps in the future we can see what opportunities can arise in China.
3. How has your partnership with Paris Saint-Germain benefitted your brand in China?
The PSG partnership has been hugely beneficial for us in being able to accelerate many various aspects of our business including the commercial, marketing, performance and merchandise. Being able to leverage one of the world's largest football IPs has been incredibly beneficial for us in accelerating our growth as an esports organisation.
For China, while we don't have a direct presence, our time at the Worlds has got us a lot of additional interest and brand awareness within China. We hope to be able to benefit from that coming into 2021 with more commercial and marketing opportunities within the region.
4. What do you expect from China's esports industry in 12 months' time?
Worlds 2020 in Shanghai has really shown the commitment China has to esports. To be able to put on such an amazing show given the whole COVID backdrop has been nothing short of amazing. China in its teams, leagues and publishers have taken significant strides and I don't see that changing into 2021.
It will be particularly interesting to see the commercial side continue to develop and what brands start leveraging more the esports audience. Some of the commercial opportunities such as Nike and the LPL etc... have been amazing to see and I would expect to see more of these types of deals being brokered going into the future.
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