China Digest | CCTV underlines importance with Fifa renewal

Weekly round-up of sports business news from the Chinese sports industry.

CCTV pens Fifa extension

With a raft of online platforms – including Tencent, PPTV, LeSports and others – revolutionising the media landscape in China over the past few years, it can be easy to forget that state-owned CCTV is still a major player, with an audience far surpassing any other channel in the world.

In terms of sports, an unwritten rule ensures CCTV always gets broadcast rights to the Olympic Games, Asian Games and Fifa World Cup, and while CCTV has often sold off online rights to these properties at the last minute to other platforms, its own much-improved web offering makes this less likely to be the case going forward.

Fifa has just extended its rights agreement with CCTV for the next two cycles, incorporating both the 2018 and 2022 World Cups, the 2019 Women’s World Cup and all of Fifa’s other major international competitions until 2022.

Average television viewership for the final of the 2016 World Cup in Brazil topped 30 million in China – not bad considering it was shown in the middle of the night in the country. With much improved scheduling from Russian and Qatari time zones, future audiences will be significantly higher – especially if China is able to qualify for the 2022 tournament.

New guidelines specify $300m benchmark

New draft guidelines on outbound investment from China’s National Development and Reform Commission appear to target offshore financing, with companies required to get approval from regulators for overseas deals even if the funds being used are already out of the mainland.

However, deals worth less than $300m (€259m) would not be subject to this new approval, should these guidelines be ratified. Gao Jisheng’s purchase of English Premier League football club Southampton, for example, was financed using a Hong Kong-based bank, though the total amount was £210m (€238m/$275m) for 80 per cent of the club – i.e. under the magic level – while Li Yonghong’s purchase of AC Milan was valued at €740m, well above the new mark.

It’s unclear what would happen to mainland parent companies in the event that they still attempt to circumvent these new regulations via offshore financing, but don't expect any to risk finding out if, as expected, these guidelines become codified. At the latest count, however, only 27 clubs in Europe had a valuation of at least $300m, so there are still plenty of clubs for Chinese investors to target.

Secondary prices leave LoL fans angry

While an estimated 40,000 Chinese fans descended on the Bird’s Nest stadium over the weekend to watch the League of Legends esports world final, a number several times greater had already found themselves unable to buy tickets via Chinese ticketing platform Damai, which said it experienced technical glitches due to high demand.

However, fans didn’t buy that excuse after seeing plenty of tickets available online from touts at a re-sale value of up to RMB20,000 RMB (€3,400/$3,900), up from a face value range of RMB280 to RMB1,280. However, after two Korean teams knocked out two Chinese teams in the semi-finals, tickets on the secondary market for last Saturday’s final plummeted. 

Many of the best gaming teams come from Korea, with Intel announcing two esports events in the run-up to next year’s winter Olympics in Pyeongchang, as well as a qualifier in Beijing.

Meanwhile, the esports team of French football club Lyon, in which Chinese investors IDG Capital Partners hold a 20-per-cent stake, has joined forces with Chinese esports outfit EDG to form a Fifa Online 3 team, which will compete in Tencent’s professional league.

O-RANGE tempts Timberwolves

The NBA’s Minnesota Timberwolves basketball franchise has announced a partnership with Shanghai-based youth basketball organization O-RANGE SPORTS.

Under the agreement, O-RANGE SPORTS will bring youth players and coaches from China to Minnesota during the current season to watch a game and take part in Timberwolves-affiliated training camps. O-RANGE SPORTS aims to train coaches and players in China in order to grow China’s basketball presence globally.

Chinese businessman Jiang Lizhang acquired five per cent of the Timberwolves last year, when the team also signed a deal with Chinese electronics maker TCL.

Asian Tour returns to mainland

Golf is continuing its renaissance in China with the Asian Tour confirming it will host its first event on the mainland since 2008 by hosting the Asian Golf Championship in Xiamen at the end of this month.

It will be the first event announced since the Asian Tour signed a deal with the China Golf Association (CGA) in March, when it was also revealed that as many as four events were planned for China this year.

That deal also seemed to signal the end of the fledging PGA Tour China, who had previously partnered with the CGA. However, the PGA’s China offering returned to Hong Kong last week – its sole event in China this year – and also announced the full series will return in 2018.

Meanwhile, the new Asian Tour event in Xiamen will have a purse of $350,000 and will feature 56 Asian Tour professionals, 48 pros from China and four special invitations.

Drone worlds land in Shenzhen

The Chinese city of Shenzhen will host the inaugural World Drone Racing Championships in November 2018.

Situated on the Chinese mainland just across from Hong Kong, Shenzhen is home to Chinese drone maker DJI, which boasts 70 per cent of the global drone market.

While drone racing is a relatively new sport, it is a sign of its growing importance that International Olympic Committee president Thomas Bach attended the International Air Sports Federation’s general conference, at which the rights to host the world championships were awarded.

Also this week…

Further reading…

The China Digest is written by Mark Dreyer, who runs the China Sports Insider website, which features sports business news and analysis related to China’s fast-growing sports industry. He has worked for Sky Sports, Fox Sports, AP Sports and many others, and has covered major sporting events on five continents, including three Olympic Games. He has been based in China since 2007.

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