Welcome to the latest edition of the China Sports Business Weekly.
Making headlines this week: Current CSL champions Jiangsu FC to cease operations, PP Sports set to lose CSL rights, Douyin partners with EURO 2020, French national team launches on Tmall, a blog on opportunities presented for sports organisations on Clubhouse, and qualifications for esports profession released.
In this week’s From The Top, we spoke with Cameron Wilson, Wild East Football founding editor, about the latest major setback for Chinese football, just how the Jiangsu FC collapse came about, and what needs to be done within the system to rectify this.
Top Industry News
1. CSL Champions Jiangsu FC to Cease Operations The owners of Jiangsu FC, the current Chinese Super League (CSL) champions, announced the club would "cease operations" with immediate effect. "Due to various uncontrollable elements, Jiangsu Football Club cannot effectively guarantee to continue to play in the Super League and the AFC (Asian Football Confederation)," club owners Suning stated. Read more on CNN (English) and Xinhuanet (Chinese)
2. PP Sports Set to Lose CSL Rights
According to state media, the CSL is next in line to terminate its contract with PP Sports due to delayed payments and uncertainty surrounding the future of the Suning-owned platform. Read more on SportBusiness (English) and Beijing Youth Daily (Chinese)
Mailman Take: One step closer to the end for PP Sports. Migu, iQIYI Sports, and even Tencent Sports will be eyeing the rights to China’s top-tier league at a much cheaper price than PP Sports were contracted to pay. We expect these rights to go non-exclusive across multiple platforms as the league faces a battle to keep fans engaged following the Jiangsu FC debacle.
3. Douyin Partners with EURO 2020
The partnership was announced 100 days before the start of EURO 2020, and on the same day, UEFA opened its official Douyin account. With sister-app TikTok becoming the first digital entertainment platform to partner with the UEFA EUROs, this means the ByteDance-owned apps now have a global tie-up with the tournament. Douyin will launch a series of challenges and produce exclusive augmented reality content. Read more on Dao (English) and ChinaNews (Chinese)
4. French National Football Team Launches Tmall Store
The launch of the French Football Federation’s (FFF) flagship store represents the third official outlet for the French national football team in the world, after the French Football Federation’s website and the store at 87 Boulevard de Grenelle, Paris. Read more on Ecosports (Chinese)
5. YONEX Named Official Strategic Partner of Chinese National Badminton Team
The eight-year contract will see national players competing and training with Yonex racquets, strings, shuttlecocks, bags, apparel and shoes. Read more on YONEX (English) and China Daily (Chinese)
6. GOLFZON PARK Opens China Flagship Store
As the world's largest golf simulator clubhouse, GOLFZON PARK has officially opened its China flagship store in Beijing, including advanced technology and high-quality equipment. Read more on China.com (Chinese)
Opinion
What Opportunities Does Clubhouse Present for Fan Engagement in Sports? Clubhouse, the audio-only, real-time, invite-only social app that lets users engage in virtual ‘rooms’, has exploded onto the social media stage recently. David Brake, consultant at Seven League, outlines the benefits and risks to using the platform for sports rights-holders. Read more on SportBusiness (English)
Esports
Chinese Government Releases Qualification Standards for Esports Professions China’s Ministry of Labor and Social Security has unveiled vocational skill and qualification standards for esports. The publication of vocational standards for esports professionals shows the authorities’ determination to manoeuvre in an emerging industry that is set to grow significantly in the next decade. Read more on Sohu (Chinese)
Other News
Suning Sells 23% Stake to State-owned Investors, Raises US$2.3B The Chinese retail giant has received US$2.3B in investment from state-backed investors in exchange for a 23% stake in the company. Shenzhen International Holdings and Shenzhen Kunpeng Equity Investment Management, both owned by the People’s Government of Shenzhen Municipality – agreed to purchase 8% and 15% of Suning.com’s shares, respectively. After the deal closes, the publicly-listed company will no longer have a controlling shareholding or an actual controller. Read more on Pandaily (English) and Tencent (Chinese) Tim Hortons China Plans 200 New Locations in 2021 A new fundraising round from Sequoia Capital China, Tencent Holdings and Eastern Bell Capital, means Tim Hortons China will look to add more than 200 shops to its network this year. The Canadian brand also plans to enter the coffee retail market this year, which could involve opening a store on Alibaba Group’s Tmall. Read more on Reuters (English) and Beijing News (Chinese)
From The Top
Cameron Wilson, Wild East Football founding editor 1. How big a setback is this for Chinese football that the current champions could cease to exist three months after winning the league? This is Chinese football's biggest shame and embarrassment to date, because of the context. The match-fixing scandals of the early 2000s and all the other various embarrassments were bad, but this is being played out on a global stage.
Five years ago China launched huge new plans to overhaul the sport from top to bottom and set bold goals to be a major footballing power by 2050. Yet just five years later its championship-winning club with over 25 years history has ceased to exist and all the social and cultural capital accumulated in and around Nanjing during that time, which acts as a foundation for local football, is poured down the drain because it doesn't suit Suning to bankroll the team anymore.
Chinese football faces so many challenges already without adding to them. The bottom line is people look at what happened to Jiangsu and will just think "What's the point of supporting a Chinese club if even the champions can just disappear overnight". Healthy, well-run CSL clubs which are not there simply to provide players for the national team are one of the most important elements of a functional football system, but the CFA doesn't understand this.
2. How does something like this happen, where does it stem from? Chinese Football clubs don't make money, they are bankrolled by big conglomerates to curry political favour. For Suning, it's purely about business, now it no longer suits them to support Jiangsu FC, so they pull the plug. You could reasonably argue that Suning is just doing what businesses do - looking after the interests of their shareholders and that there was nothing wrong with that. Because this is how business works.
But this situation just illustrates why football clubs just shouldn't be completely reliant on sponsor companies to exist. It's obviously not sustainable. Some may be willing to give Suning a pass on this, but I'm not. They should not have taken over the club if they did not have a long-term commitment to it. Five years is nothing in this context. Besides, if you look at Suning's homepage, there's a whole section dedicated to it's CSR credentials.
Yet they just killed a 25+ year old football club and did huge damage to the local football community, a completely avoidable act of serious social irresponsibility. The bottom line is that if Chinese football was run by football people, you would not see championship-winning clubs disappear overnight.
3. What exactly needs to be done within Chinese football, the system, and at the grassroots to ensure there is hope for Chinese football in the future? China's road to becoming a football power remains long and arduous. There are just so many barriers here that stand in the way of a proper football culture being developed. At its most basic level, modern life in China is full of pressure and obligation. People simply don't have much time and energy to spend on sports or even much else.
There's just such absolutely massive pressure to get ahead, and so many basic obligations like work, family, kids education, health, care for elderly etc which are quite rightly more pressing issues for the average Chinese person to take care of. These are deep and fundamental problems that absolutely will not go away anytime soon.
The root cause is the absolutely incredible income inequality in China, there's a lot of money sloshing around here but the average person, even the so-called rising middle class, the pressure they face in their daily lives to take care of the basics is huge. This is all exacerbated by Chinese culture where a keeping up with the Jones mentality is very dominant - no-one wants to fall behind, to be seen to be not looking after parents, to not be buying a car, or be seen to be the one not sending their kids off for extra classes in the evening, etc, etc. End result is, football is just a frivolous game of little consequence in China.
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