The Business of Soccer in China


The Business of Soccer in China

Returning to one of my long term themes in China – the development of domestic soccer.

Earlier this month, soccer returned to the priority list of China’s leaders. Xi Jinping, Li Keqiang and friends held a meeting to discuss how to improve the still dismal state of Chinese soccer. Success in soccer is linked to the realization of the Chinese dream. Presumably, this means that lots of money will be thrown at the problem.

It will be great to have more qualified coaches, more pitches and more grass roots participation, but will it achieve the desired outcomes? Not without broader changes and, as with so many initiatives to improve an industry in China, greater foreign participation.

We need to view soccer as an industry, an industry trying to attract discretionary spending from Chinese consumers directly through tickets and merchandise, and indirectly by viewing TV channels that pay market rates to air games and buying products/services from sponsors of the teams.

We are a long way from having all the enablers necessary to justify this. Just contrast what people will pay to watch a movie in China to what they will pay to watch a soccer match. A Chinese movie fan will readily pay US$20 to watch the latest movie on an IMAX screen; but season tickets for a Chinese soccer team can still cost less than US$100.

What do we need?

  • Fans will only pay up if they believe they are watching genuine competition between teams. Anti-corruption initiatives need to apply consistently to soccer as much as any other industry.
  • Teams need to be allowed to retain more of the revenue they generate. Teams should own and operate their own stadiums. They need to be able generate and then choose how they spend and invest their cash – on players, facilities and on fans.
  • A market price for TV rights needs to be established and paid. It is only a generation in Europe since soccer rights were almost free. Value can rise quickly if a marketplace for the rights is established.
  • Leading international soccer teams need to be encouraged to buy into Chinese teams and to integrate their development programs. Transfer of best practice, rotation of talent for international experience, capability and skill-building programs – all the usual benefits of foreign engagement.
  • Oh and yes – we need to find the Chinese Messi and Ronaldo – to become the visible figure heads of the emergence of a world class soccer industry in China.

Read more of my views on my blog, Gordon’s View. And please follow me on Twitter.

By |April 7, 2015|Categories: Gordon's View|0 Comments

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