Welcome to the latest edition of the China Sports Business Weekly.
In the news this week: CBA return is on, AFC all-in for Champions League, Xi’an kicks off $1B project, Tencent claims Motorsport data deal, adidas bullish on China, Kuaishou app tops US charts, esports icon calls it a day at 23, and the Top 10 international esports teams on Weibo.
In this week’s From The Top, we spoke with Cameron Wilson, Wild East Football founding editor, about the CSL, continued delays & business implications, why teams have been disqualified, new stadiums, and why Chinese football will never reach the heights of its global counterparts.
Top Industry News
1) CBA Announces June 20 Return Date The Chinese Basketball Association (CBA) is set to return on June 20, the first major sporting league in the country to do so. To ensure a safe resumption, matches will be limited to two regions: Qingdao in the north and Dongguan in the south. It’s been a long time coming, but it’s positive to have a marker down for live sport again in China. Read more on ESPN (English) and CBA (Chinese)
2) AFC Confident on Champions League Completion
The Asian Football Confederation (AFC) and its members have committed to completing the 2020 club competitions. Both the AFC Champions League and the second-tier AFC Cup have been suspended until at least the end of June with the opening group stage not yet complete. There are 99 games left to be played, with a champion to be crowned no later than the start of the 2020 FIFA Club World Cup in Qatar. Read more on AFC (English) and people.cn (Chinese)
3) Xi’an Breaks Ground on $1.1B Football Project
The historical city is set for a huge cultural construction project that includes a 60,000-seater football stadium which will be a venue for the 2023 AFC Asian Cup. The 280-acre Xi’an International Football Centre will include retail space, hotels, a news media centre, and a youth football training facility including accommodation, medical and conference spaces. It sounds spectacular and a worthwhile investment, but time will tell if this project turns out to be sustainable and revenue-generating further down the line. Read more on SportBusiness (English) and Tencent (Chinese) 4) Tencent & Motorsport in Data Deal
The two-year agreement covers the current season, historical results and additional data for 11 different series. A comprehensive motorsport dataset will be made accessible to Tencent Sport users, across all touchpoints: website, apps, social media, and TV graphics. Read more on Motorsport (English) and Motorsport (Chinese) 5) Adidas to Increase China Investment Local demand in China for a healthier and fitter lifestyle has encouraged adidas China to invest more. The sportswear brand signed an agreement to establish a new automated distribution centre in China for its Asia-Pacific market, stating it is confident in the development of the Chinese sports industry. Read more on China Daily (English) and Xinmin Evening News (Chinese)
Best of the Rest
Kuaishou’s Zynn Targets US Market
China’s second-largest short-video startup with a valuation of $30B is eyeing the US market. That startup, Kuaishou, has released Zynn, a new short-video product that allows users to upload, edit and share videos. Zynn pays users to watch content and recruit other users. Within a month of Zynn’s release, the app has become the most downloaded iOS app in the US. Read more on Pandaily (English) and Jiemian (Chinese)
Beyond Meat Deepens China Roots
The Plant-based meat maker has launched partnerships in China with major fast-food chains KFC and Pizza Hut, both owned by YUM China Holdings Inc. This news follows last month’s announcement that Beyond Meat was entering the Chinese market with products at Starbucks locations. Competition in this space is heating up as demand in China surges for more environmentally friendly food options. Read more on Bloomberg (English) and China Daily (Chinese)
Creative of the Week
Chelsea Livestream Challenge Graphics As part of a livestream, fans had to complete a series of challenges each round during the show to unlock the "round master," which was one of the five players shown in the graphic. The images are based on a Chinese tale of ‘five tiger generals’. View the creatives here
Douyu Nets BLAST Premier Rights
The Chinese streaming platform acquired broadcast rights to esports’ BLAST Premier 2020 Counter Strike tournament, which includes exclusive Mandarin-language streaming rights in China. Douyu, which had 164M monthly active users on its platform in 2019, is to broadcast over 300 hours and over 150 matches across the year. Read more on SportBusiness (English)
Esports Icon Hangs Up Controller at 23
The prominent esports player who goes by the name of "Uzi" has called it quits on the sport at the age of just 23. He announced to his fans he was stepping away to focus on his health. "I regret to tell everyone that I am retiring. Because of chronic stress, obesity, irregular diet, staying up late and other reasons, I was found to have Type-2 diabetes during a physical examination last year." At a time when mental & physical health are in the spotlight more than ever, this news will serve as a reminder to many about the potential underlying health concerns attached to esports. Read more on ESPN (English) and people.cn (Chinese)
From The Top
Cameron Wilson, Wild East Football founding editor
1. The CSL looks set to start later than most European leagues despite China recovering out of COVID-19 quicker. Why the long delay?
Authorities in China are notoriously risk-averse at the best of times, so it's no surprise that football games, which see large numbers of people in close proximity, are not being allowed to resume during an unprecedented pandemic. In Europe, there's financial pressure to resume football. Those two things are why we are seeing football resume in Europe before China despite the outbreak first occurring in China.
2. What will the financial and business implications for all involved be if the CSL season fails to return?
It's always difficult to analyse the business side of Chinese football because it is by nature murky and little reliable financial information is available outside boardrooms. The recent cull of 11 clubs isn't really anything to do with coronavirus as clubs here don't rely on the same income streams as Europe - gate money is a tiny percentage of clubs' income and TV, merchandising and sponsorship cash, whilst it may be more substantial, clearly doesn't pay for the huge salaries and even just the running costs of clubs. So in some ways clubs are fortunate here in that they will largely be able to wait it out until the worst effects of the virus are over.
3. A number of professional clubs have been disqualified or dissolved recently. Why is this happening and what needs to be done? The disappearance of so many clubs, mainly in the lower leagues, was quite shocking even to a seasoned observer like myself. Seeing illustrious names like Liaoning go out of business does no-one any good, their disappearance is a huge loss of social and cultural capital which Chinese football absolutely cannot afford to lose.
Most of the departures are down to strict new management guidelines and financial rules which are aimed at making clubs more sustainable. These are well-intentioned, but they overlook the unfortunate fact that when you have a league which is constantly undermined by bizarre rule changes, and clearly completely subservient to the needs of the national team, it's hard to convince people that it's worth paying much money for. I don't see how clubs can realistically exist in China without external benefactors.
4. We’re seeing new mega-stadiums and football projects breaking ground. Is this the first big step to China hosting the World Cup in the next decade, and what roadblocks lie ahead? It's great to see more football-specific stadiums being built - most CSL clubs play games in a soulless athletics stadium which makes for an inferior fan experience in terms of atmosphere, closeness to the action, and psychological closeness to the football itself. However, like many countries everywhere who build infrastructure for specific sporting events, often not much thought is put into what will be done with these facilities afterward.
China obviously would love to host a World Cup and it could potentially do a great job of doing so, but it needs to make sure that these new stadiums they build in the next few years for the Asian Cup in 2023 become footballing cathedrals which house local teams which prosper and spread the love of the game in their cities and regions, after 2023 is over. Otherwise, it will be a massive waste of money and building materials.
5. Rules are often changing regarding foreign players, transfers, and so on. What’s the biggest thing holding back Chinese football and will its quality ever compete with that of international football?
Chinese football will never compete with the upper echelons of the sport globally. In China there are not enough people who understand football intrinsically and love it passionately, making decisions - it's run by politicians and business people. Even when you look at foreign involvement, the key motivator is "market expansion" - it's not to develop football itself, just to develop the business arms of individual clubs involved, and for the Chinese partners of these clubs to make money.
That's not to say that there are not genuine football people in China - there most definitely are - but they are very much in the minority and do not have anywhere near enough influence on the game. Ultimately Chinese football serves political interests and as long as that is the case, it's potential will always remain very limited.
This week we look at the most followed International Esports Teams on Weibo.
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