China Sports Business Weekly | 29th May
Welcome to the latest edition of the China Sports Business Weekly.
In the news this week: Tencent donates to PSG Foundation, UFC athletes compete in popular variety show, 11 professional football clubs disqualified, Zhang Weili features with Estée Lauder, the early adopters in sports + commerce live streams, ANTA CEO sees positive future, Tencent to invest $70B in high-tech areas, plus the best creatives, and Top 10 NFL clubs on Weibo.
In this week’s From The Top, we spoke with Greg Turner, Founder and Managing Director, Shenzhen High Performance Event Management, about China’s entertainment industry returning to life, what changes he expects to see, new opportunities, being realistic, and where it will be in 5 years.
Top Industry News
1) Tencent Donates PPE to PSG Foundation
Paris Saint-Germain’s stadium Parc des Princes received 150K face masks and 10K pairs of protective glasses courtesy of the charity foundation run by the Chinese global technology company, Tencent. Several important charities supported by the Paris Saint-Germain Foundation will take delivery of these face masks and protective glasses in the coming days. Read more on PSG (English) and Tencent (Chinese)
2) UFC Takes Centre Stage in Popular China Variety Show
Filmed at the UFC Performance Institute Shanghai, Ultimate Fighting Championship (UFC) athletes took part in one of the country’s most popular Chinese variety shows ‘Go Fighting’, broadcasted on one of China’s top TV stations - Dragon TV. As part of the show, well-known UFC athletes Li Jingliang and Yan Xiaonan competed in the octagon against some of China’s biggest celebrity names. The show was also broadcast online on iQIYI, Tencent, and Youku. Watch the show rerun here
3) 11 Professional Clubs Disqualified Due to Wage Arrears
The Chinese Football Association (CFA) has come out with guns blazing by disqualifying 11 clubs from professional leagues due to wage arrears, while five clubs decided to withdraw from professional football. Of 11 clubs, four competed in the second-tier last year and seven in the third-division. Read more on Xinhua (English) and The Beijing News (Chinese)
4) Zhang Weili Signs with Estée Lauder
Asia’s first-ever UFC champion has become a marketer’s dream and role model for many in recent years. Her rise to the top hasn’t gone unnoticed, as international brands such as Estée Lauder have signed up the athlete as part of their new brand campaigns. Read more on Ecosports (Chinese)
5) Asian Ecommerce Live Streams Attract Early-mover Sports Properties Ecommerce live streams are a growing phenomenon in online retail in China. SportBusiness takes a look at the early adopters in this space which will likely spread worldwide. Read more on SportBusiness (English)
6) ANTA CEO Confident for Sports Industry Future The Chairman and CEO of the Chinese sportswear brand claimed the effects of COVID-19 could bring opportunities for all business owners. He proposed to the national legislature that focusing on tax cuts and financial support for minor enterprises could stabilise the job market and stimulate consumption amid the global pandemic. Read more on Xinhua (English) and Xinhua (Chinese)
Best of the Rest
The ‘Iron Hammer’ to Air June 7
The documentary film that focuses on Chinese volleyball icon Lang Ping is set to premiere on the Olympic Channel on June 7. As part of the "We Are One: A Global Film Festival", the film centres around the career of Lang Ping as a player and her move to the United States, leading to spells as the national team coach of both countries. All funds from the festival will go to the COVID-19 solidarity relief fund for the World Health Organization. Read more on Olympic Channel (English) and Sina (Chinese) Tencent Pledges $70B Investment in High-tech Areas The Chinese technology giant will invest $69.9B over the next five years in areas from cloud computing to artificial intelligence, focusing on building huge data centers containing more than one million servers each. It will also build new industrial parks and innovation centers. Read more on CNBC (English) and Xinhua (Chinese)
Video of the Week
DRL Hits 1M Followers on Weibo The Drone Racing League (DRL) celebrated reaching its 1M follower milestone on Weibo by producing a creative video of Racer 4 bursting a balloon filled with roses.
Tencent Esports Hosts First Educational Workshop
The private workshop invited multiple esports professionals, educational company leaders, and university representatives to Shenzhen. Tencent highlighted the esports educational project is one of its seven core businesses, and depends on three aspects to build the system: public education, professional education, and academic degree education. Read more on Esports Observer (English) Tencent (Chinese)
From The Top
Greg Turner, Founder and Managing Director, Shenzhen High Performance Event Management 1. As China's offline events industry returns to life, what standards need to be met for event attendees to feel comfortable in?
I’d say the most important thing for attendees is government support and their OK it’s safe to proceed.
But beyond that, China is in the unique position of both being the country where the virus originated and also the first major economy to start their journey to recovery. Regarding events, you might remember there was an initial effort back in March to reopen movie cinemas and get the CBA up and running. Both initiatives fell flat following a couple words from Xi Jinping questioning the effort and stressing the need to focus on the core parts of the economy. So that essentially gave the virus and our response more time to play out.
So the wheel doesn’t need to be reinvented to get events up and running again. People know they’ll have to do things like wear masks, get their temperature checked and register with their real name to attend the event. They’ve been through it already many times over the past few months.
We’re also still dealing with a situation where medium and large sized events aren’t allowed. So that means no stadia or arena events and thus no sports events. I’m pretty sure we’re just one step away in what’s been a very orderly and gradual reopening. Once theatres and performance halls are safely reopened, stadia and arena will be next. But until that happens, it’s still a bit of an unknown what things will look like.
2. What noticeable changes will we see compared to pre-COVID-19?
For sports events, when they do return, I think we can look both at the general measures we’ve been dealing with over the past few months and the specific measures laid out for theatre and performance hall events. These would include: real name registration when buying tickets and real name confirmation when entering the venue; Health screening when entering the venue; Face masks required and hand sanitizer readily available; Limited audience size.
Right now live entertainment can have up to 30% of maximum capacity. This may need to be adjusted for sports events though as the venues are considerably larger (ie 2000 seat theatres vs 20,000 seat arenas) so may be scaled back.; and no pre or post-event meet and greets
We’ll probably also see some limits on the number of people inside of locker rooms as a measure to protect athletes. But I think the biggest changes may be in things like managing ingress and egress, venue cleaning standards and other venue-specific issues that will need added focus and attention. Ushers and cleaners are going to be busy.
3. What opportunities will emerge from the new normal for the events industry?
The first step for the event industry is obviously going to be setting up and establishing a stable and safe operation. Though this time, I doubt we’ll see much lasting innovation as it will be more about getting us through, making sure government officials are happy with the arrangements and people feel safe while attending the event.
The central government has been putting out a lot of policy over the past few years on the need to professionalize and improve the event industry in China, especially as it relates to venue operations. The added focus on operating management from the pandemic response may counterintuitively force some venues to improve their services and invest into improving fan safety and hopefully also improving the fan experience. For example. F&B concessions are sorely lacking in most stadia and arenas in China. Can a touchless concession be more readily accepted by venue managers across China? We’ll see.
Also the idea of ‘blended events’ is really exciting to me, The government is focusing quite a bit on pushing China’s digital ecosystem forward. Buzzwords like 5G, internet+, 8k and many others are constantly mentioned in new government policy documents. So this should create some great opportunities as all the pieces are in place. First, you’ll have support from officials to explore and second you can improve the fan experience both for those attending live and reaching to those at home or at work anywhere in China that can’t make it to the live event.
4. Just how big was the impact on the offline industry, and how quickly can it recover?
Massive, and the losses are still adding up so I haven’t seen any definite numbers come out on the full impact. But like the global live event industry, China’s industry is filled with smart, resilient people who have faced unbelievable challenges and delivered outstanding events and experiences long before COVID ever showed up.
Obviously, we’re talking a different scale here, but the idea that this is an industry-wide challenge is just going to unite everyone even more, giving us the strength to come back bigger and better than ever! I firmly believe within the next few months people in China will be back together cheering on their favourite team, singing along with their favourite pop star and marvelling at the beauty of their favourite ballet dancer.
5. If you're an international sports organisation looking to play in China, realistically when can this happen?
That’s a tough question to answer. Once domestic sports events get the go ahead to start up again, it’s soon going to be within the power of local sports commission officials, police and health authorities to allow live sports events. But add in an international component and you’re suddenly dealing with the closed border issue and that’s a whole different set of government bureaucracy involving the central government.
To get athletes and officials into the country now, you’d be dealing with customs and immigration, foreign affairs and maybe even the state council. The CSL has already accepted this problem may be beyond their ability to manage. They have said they won’t wait for international players and coaches still outside of China to return before starting their season.
Having said that, some international events already scheduled for the second half of this year are still going forward. For instance, I know the organisers of the WTA finals in Shenzhen are full steam ahead planning out how to build on the success of their outstanding event last year. So I guess the best advice I can give here is wait and see.
6. Where do you expect to see the events industry in China in 5 years time, and will it be bigger and better than ever?
It’s going to be big. On the sport side, the central government has set the goal of growing the sport competition industry to RMB 2 trillion or USD$300billion by 2025. The pandemic might have slowed that down some, but the General Administration of Sport has been picking up the pace in the past month issuing new guidelines for local sports administrations on focusing their work to achieve this goal.
Fans are also being exposed to more and more types of sports. Of course, basketball and soccer aren’t getting knocked off as the most popular sports any time soon. But as an example, the government has been investing heavily in winter sports participation into the lead up to Beijing 2022. This is going to create more fans of winter sports almost as default.
The key is to understand and align with the government’s work. Don’t assume your project or your competition will automatically be supported. But for anyone involved with sports who can align with the government’s priorities, there’s a very bright future in China.
This week we look at the most followed National Football League teams on Weibo
New England Patriots - 554K
Pittsburgh Steelers - 280K
Green Bay Packers - 251K
New York Giants - 239K
New Orleans Saints - 227K
Dallas Cowboys - 129K
San Francisco 49ers - 119K
Los Angeles Rams - 113K
Seattle Seahawks - 85K
Kansas City Chiefs - 62K
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