China Sports Business Weekly | 9th October
Welcome to the latest edition of the China Sports Business Weekly.
Here’s what’s been making the headlines this week: English Premier League sues PP Sports, Wuhan arena hosts Yao Ming charity basketball game, Nike targets esports with powerful advert, NBA unites fans for Finals viewing party, sports teams get creative for Mid-Autumn holiday, live streaming ecommerce becomes fastest-growing internet sector, and in-game advertising in esports attracts brands.
In this week’s From The Top, we spoke with Chen Diandian, Founder of Ecosports, a leading Chinese sports business media group, about the English Premier League’s shift to Tencent, the long-term look of the broadcast market in China, challenges Kuaishou and Bilibili present to established platforms, and how to attract the younger generations.
Top Industry News 1) English Premier League Sues PP Sports
The digital broadcast platform owned by Suning failed to make a payment of $210M to the English Premier League in March this year, causing the league to cancel the 3-year contract early and move to Tencent Sports. The league is now filing a court case against PP Sports for $215M. Read more on Bloomberg (English) and Sina (Chinese)
Mailman Take: At first PP Sports threatened to sue the Premier League, now it’s the other way around. We don’t expect either court case to lead anywhere.
2) Wuhan Sports Center Hosts Basketball Game
The centre, which was converted into a 1,100-bed makeshift coronavirus hospital at the height of China's COVID-19 outbreak, held its first game since the city lifted lockdown. 7,500 spectators attended the Wuhan Sports Center to watch a basketball game organised by retired NBA star Yao Ming. Read more on CGTN (English) and Xinhua (Chinese)
3) Nike Produces Striking Esports Ad in China Ahead of LoL Worlds
The commercial first hit screens during the group stage of the on-going League of Legends (LoL) World Championship in Shanghai, while the tournament had an estimated 104M fans tuning in for last year’s events. Nike’s new ad focuses on a number of important health issues, yet portrays them in an exaggerated manner to make it feel more light-hearted and fun. Recently retired Chinese esports superstar Uzi also makes an appearance as a coach to aspiring esports players. Read more on SCMP (English) and Weibo (Chinese)
Mailman Take: Arguably the biggest moment in China’s ‘sporting’ calendar this year and Nike has gone all in: a powerful and highly original ad to target China’s vast esports audience. Nike gets it.
4) NBA Unites Fans with Finals Viewing Party at Mercedes-Benz Arena
The 4,000-strong viewing party brought fans from around the country to Shanghai to watch the fourth game of the Lakers-Heat Finals. Former NBA star Stephon Marbury attended the event which included a variety of interactive activities. The NBA’s offline operations team would normally be wrapping up the NBA China Games this time of year, but with no NBA China Games taking place, this is a smart move by the league and arena to bring basketball fans together. Read more on Xinmin (Chinese) Mailman Take: After months of watching at home on mobile screens, the NBA put on quite a show with their first offline event of the Finals. China’s ‘Lakers Nation’ was in full voice both online and offline.
5) MLB Youth Baseball Tournament Kicks Off in Beijing
The tournament, named First Pitch, will span two months, landing in 15 cities, with thousands of young baseball players competing against each other. Read more on Huanqiu (Chinese)
6) Sports Get Creative For Mid-Autumn Festivities We’ve compiled the best Mid-Autumn Festival and October Holiday content as sports teams and organisations celebrated the festivals.
NBA: video of New York Knicks player Dennis Smith Jr. wishing happy Mid-Autumn Festival to Chinese fans.
Tottenham Hotspur: wished fans a happy Mid-Autumn Festival and invited them to predict the results of the club’s games during the holiday with rewards.
PSG: asked fans to write PSG-themed poems with the winners receiving custom-made mooncakes.
NHL: a hockey match on a mooncake graphic to celebrate the festival.
MLB: invited fans to fill-in-the-blanks on a picture that MLB posted featuring Mid-Autumn Festival traditions, and give out a jersey to the comment with most likes.
CBA: CBA’s Weibo featured the difference between basketball fans and ordinary people.
FIFA: wished football fans happy Mid-Autumn Festival on Weibo
Chelsea: posted a video of Azpilicueta wishing Chinese fans happy Mid-Autumn Festival and gave gifts to all comments with over 2000 likes
In Other News
Live Streaming Ecommerce Becomes China’s Fastest Growing Internet Sector
By June 2020, a third of China’s internet users (309M) had tuned in to livestreaming ecommerce, marking an increase of 16.7% compared to a March report and making it the fastest-growing internet sector in the country in the first half of 2020. COVID-19 closed down most offline sales in China, giving live streaming ecommerce a window of opportunity for business to attract and engage customers. Read more on KrASIA (English) Luxury Brands Not Prepared Post-COVID-19 in China COVID-19 drastically accelerated the consumer shift to digital, putting pressure on brands to act quickly and decisively. Digital is now an area companies must become experts in, invest in, and focus on from the top down. China is the first major country to bounce back from the pandemic, but luxury brands are having a hard time finding the sweet spot for China’s consumers. Read more on Jing Daily (English)
Esports News In-Game Advertising Attracts Brands into Esports League of Legends (LoL) developer Riot Games is delivering further sponsorship offerings at the current LoL championships. Having developed its sponsorship with in-game arena banner advertising across its LoL series for the first time in May, this feature allows brands to be integrated into gameplay via banner advertising. The technology, which was developed in-house by Riot, allows brands to be visible to audiences without affecting gameplay as the players participating are not able to see the branding. Read more on SportBusiness (English) and Ifeng (Chinese) PSG.LDG Wins First Offline Event Staged in China Since COVID-19 Chinese esports team PSG.LGD won the China Dota 2 Pro Cup, taking home $40K in prize money. Read more on Esports Observer (English) and Baijiahao (Chinese)
SportsPro Asia Virtual Summit In just 12 days, taking place on 21 & 22 October, SportsPro Asia will unite industry professionals across the region for two days of virtual panels, round tables, networking, and learning. Key figures from the UFC, NBA, Facebook, NFL, YouTube, Bundesliga, MLB, EASL, and many more will be attending. Check out more here
From The Top
Chen Diandian, Founder of Ecosports
1. How do you analyse EPL's shift from PP Sports to Tencent Sports and do you predict this being a long-term partnership?
It is a symbol for the dissolution of the China sports broadcast market and the issue was complicated. I believe the EPL intends to find a long-term partnership with a reasonable price in China but it would be a tough process.
Given the inflation on previous deals, their monetary expectations will still be high despite settling for a low price this season. A lot will also depend on whether the league plans to work with the short-form platforms selling carved out packages and highlights.
2. Has China's digital broadcast market reached its peak, and how do you see this market playing out in the next 3-5 years?
This market experienced the bubble period in the previous five years and now everyone realised it was so difficult to do this business in China with high price levels. So I predict the market scale will lessen, the bidding price for top sport rights will drop to the level in 2010.
Broadcasters will calculate the expenditure and revenue strictly. They understand how to make money in subscription, commercial ads and rights distribution, but only if the price returns to the rational level, they are able to let the business be profitable.
3. How much of a challenge do the likes of Douyin, Kuaishou, and Bilibili present to the most established broadcast platforms in buying content and attracting younger audiences?
It is a huge challenge for the broadcast platforms as more younger generations prefer to watch short video content other than the whole live game as they think it is less time-consuming and more convenient for spending their valuable time.
It is hard to change this consumer behaviour so maybe the rights holders need to find a way to partner with certain short video platforms. Creating a bigger fan-base is still the priority for sport broadcasters and it would be a key long-term strategy.
4. Why are younger fans less willing to pay for season passes or to watch full matches and what advice do you have for rights holders who want to attract the younger generations of sports fans?
It is a developing trend in China and maybe all over the world. For me, the most effective way for attracting youth in China is to combine esports features and create various content formats including entertainment, lifestyle, health, and fashion. Right now there is huge competition for attention from fans and consumers.
Right holders need to ensure the products they’re producing for China are organic and relevant. COVID-19 has put more emphasis on digital. This is where fans and consumers will be, you have to meet them there and speak in their language.
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.