China Sports Business Weekly | 28th May
📰 It’s been a week full of Tencent news, Olympics rights deals, US team acquisitions, celebrity apologies, and business launches.
🎤 In From The Top, we caught up with Casper Stylsvig, AC Milan Chief Revenue Officer, to talk about bringing the club’s philosophy to China, creating a sustainable business model, obstacles on growing the academies, partnerships with PacificPine Sports, and the club’s focus for the next three years. 🎤
🗞️ Top Industry News
Tencent and Kuaishou Land Tokyo & Beijing Olympics Content Rights The two digital powerhouses will sublicense on-demand and short-form video rights from the exclusive Olympics rights holder in China, state-owned CCTV. China Mobile-owned Migu agreed to live Olympics rights in a deal signed late last year. Read more on SportBusiness (English) and Sports Money (Chinese)
China Plans 18 Football Cities in Five Years
According to the State document, by 2025, the football cities should contain at least two professional clubs, one national-level youth training center, and local training centers. Half the students in the cities should be engaged in the sport, while there should be at least one football pitch for every 10K people. Read more on Xinhua (English) and The Paper (Chinese)
Tencent Sports Becomes New Media Partner of Qatar World Cup Qualifiers Referred to in China as the Top 40, Tencent will bring highlights from the Top 40 competition, which includes China’s remaining four qualifying games for the FIFA World Cup 2022 in Qatar. Read more on Xinhua (Chinese)
Joe Tsai Buys Lacrosse Expansion Team in Las Vegas The billionaire has reached an agreement to bring a National Lacrosse League (NLL) expansion team to ‘Sin City’. The co-founder of ecommerce giant Alibaba also owns the NBA’s Brooklyn Nets and another NLL franchise, the San Diego Seals. Read more on Yahoo! (English) and Tencent (Chinese)
John Cena Apologises to China The actor and former WWE wrestler described Taiwan as a country to Taiwanese media, causing a backlash in China, and resulting in Cena posting a video message in which he speaks in Chinese and says sorry for his "mistake". Read more on BBC (English) and Huanqiu (Chinese)
💡 Mailman Take: apology videos eliminate backlash from fans questioning authenticity. Delivered in comprehensible Chinese, Cena prevented a possible removal of his name from China’s internet, not to mention the F9 movie he was in China promoting.
Nico Yennaris Launches VIRTUS
Known as Li Ke in China, the former Arsenal and current Chinese national team footballer is looking to grow his career off the pitch by launching VIRTUS, a talent management and commercial services agency in Shanghai. Read more on ECOSPORTS (Chinese)
Chengdu Table Tennis Venue Praised The table tennis venue for the 2021 Summer World University Games in Chengdu has received praise after hosting the China University Table Tennis Championships. Twenty-four teams and 178 players competed at the event at the Chengdu High Tech Zone Sports Centre Gymnasium. Read more on Inside the Games (English) and Sohu (Chinese)
🎮 Esports China Handed Four Spots at 2021 Worlds China’s Legends Pro League will have four spots in the 2021 League of Legends World Championship, taking place in November. The league was awarded the extra slots at the conclusion of the Mid-Season Invitational, where Royal Never Give Up beat DWG KIA 3-2. Read more on Reuters (English) and Sina (Chinese)
🖊️ Blogs The Eight Cities Powering China’s Esports Industry As the Chinese government promotes gaming from the center, multiple local governments and municipalities have taken on the role of elevating this across the country. We’ve identified the eight leading Chinese cities establishing gaming at the front of their economic and cultural development. Read the blog here (English)
📓 Reports China Overtakes US on Smartphone Usage Research company eMarketer forecasts that this year, adults in China will spend an average of 3 hours, 16 minutes per day on smartphone activities. Up 25 minutes, or 14.6%, from 2020, this total will vault China to first place in the world for that metric. The US will drop to No. 2, with adults there spending 3h10 on smartphones daily. Read more on eMarketer (English)
🗞️ Other News Wanda’s AMC Sale Ends Company’s Global Dream There will be no encore to a once-grand vision to dominate the global cinema industry by Wanda. "Wanda Group has completely withdrawn from the AMC board," the company said in a statement. A Wanda filing to the U.S. Securities and Exchange Commission said the group now only holds 10,000 AMC shares, or 0.002% of its outstanding stock. Read more on Nikkei Asia (English) and Jiemian (Chinese)
Tencent Announces $20.6B Revenue Q1 The impressive Q1 was driven by its mobile gaming business, making up 32% of the company’s total revenue. Mobile titles like “Honour of Kings,” “PUBG Mobile,” and “Peacekeeper Elite” helped the division pull in $6.4B in revenue. The broader gaming division, which includes everything from mobile to PC, generated $11.2B in the quarter, a 17% increase from the same period a year prior. Read more on Front Office Sports (English)
🎤 From The Top 🎤
🗣️ Casper Stylsvig, AC Milan Chief Revenue Officer
Background: AC Milan and PacificPine Sports, China's premier sports academy, signed a long-term partnership to open new sports centres across mainland China.
1. What methodology & philosophy will you have for the academies, will it be AC Milan style, local style, or a mixture of both? How will you implement this?
AC Milan Academy is a synonym for excellence and innovation. Our goal is to bring our very own Metodo Milan to China through our experience and the expertise of PacificPine Sports. We will do this by bringing an official AC Milan coach specialised in our unique training system to China. The coach will oversee the development of the local staff through dedicated coaching programs. The trained staff will then be tasked with following the human and sporting development of all children involved.
We believe that, with the help of PacificPine, we can really do a great job for all children in China and we are really proud to welcome all of the children who will be wearing our colours to our big family.
2. What's your business model for the academies to make them a sustainable, long-term business?
Besides sharing the Club’s vision and mission, our partners must guarantee a medium-long term commitment to generating social, sporting and economic value on the territory. As I previously mentioned, the AC Milan Academy is a synonym for excellence, so we must guarantee and maintain high standards when it comes to facilities, organisation and financial stability. We also want to focus on the development of the project to be able to attract the interest and involve our local partners and sponsors. Finally, our Academies should also be seen as opportunities for content creation aimed at different target audiences: players, coaches and managers.
3. What are the biggest obstacles you envision in growing the academies throughout China? How will you overcome these?
Firstly, we must keep in mind the impact of the COVID-19 pandemic and the limitations it has created, not just in China, but internationally. Whilst this is certainly an obstacle, we also see it as an opportunity to help the country get back to normality. It is also important to be able to adapt our approach to the local market to make sure it can be functional according to the lifestyle in China – we do know the Chinese market really well, but we can also count of PacificPine’s knowledge of the market, which will certainly be an important asset for us. Furthermore, whilst there are other international football clubs with Academies in the Chinese market, we believe our offer is different and unique as it is based on our own method of training, the Metodo Milan.
Finally, we must not forget that there are other popular sports in China, like basketball, which have their own academies and training facilities for children and have been in the market for longer. Once again, we believe the partnership with PacificPine will help us with this as they are experienced in a variety of different sports, including basketball and golf.
4. What impressed you about PacificPine Sports to bring them on as a partner?
This partnership gives us the opportunity to enhance our presence in the Chinese market and to bring our brand closer to our local fanbase, so it was key for us to identify the right partner. Since our very first meeting with them, we understood that PacificPine Sports was the right partner for us. If I had to narrow it down to three things, it would be expertise, knowledge of the market and shared vision:
Pacific Pine has extensive experience in preparing the next generation of athletes in a number of different sports, including basketball and golf. Their expertise is undeniable and it will certainly be an incredible asset for our AC Milan Academies.
They already operate in many cities across China and therefore know the market really well. Our ambition is to expand from Shenzhen to across Mainland China, so having a partner that knows the ins and outs of the market will certainly come in handy.
AC Milan and PacificPine have a similar vision for the Chinese market. Being like-minded is fundamental for a positive and successful partnership.
5. Your second office opening in four years marks great progress. What do you put this success down to, and what key plans do you have for the next three years?
As a truly global brand with over 500M fans across the world, we have a very clear international strategy in place and China is certainly prominent in it. AC Milan has a long legacy in the market, going back to the ‘80s and ‘90s, so we have a huge fanbase there. That is why we decided to open the first-ever office outside of Italy in Beijing in 2017. The new office in Shanghai will be a key asset for the Club to further develop its commercial and communications strategy in the market.
All of our hard work over the past few years has led to an increase in the popularity of the AC Milan brand in the Chinese market, as recently proved by a study conducted by international market research and data analytics organisation YouGov, which found that the Rossoneri are the best-regarded Italian Club in China. We now want to maintain momentum and keep investing time and energy to get closer to our huge fanbase in China. We are planning to do that by investing in the digitalisation of the Club, so that we can also produce more localised and impactful content for our fans and, hopefully soon, with offline activities alongside our partners and our fans.
Subscribe here to keep up-to-date with all the latest sports business news from China.
Headquartered in Shanghai, China,Mailman is a global sports digital consultancy and agency. We help the world’s leading sports organisations serve their audiences and build their businesses. With over 200 experts across China, Southeast Asia, Europe, and the US, we specialise in digital strategy, transformation, social media, content production and eCommerce. Learn more about our story here.