- Since 2016, ESPN has operated a licensing – rather than a joint-venture – model for X Games outside the US
- Focus this year is on China, with a summer edition in Shanghai and a yet-to-be-announced city to host a winter X Games
- ESPN’s international hosting strategy is to target host cities and countries with a proven action sports culture, rather than wait for bids
Back flips in motocross, front flips in BMX, a triple cork 1620° in skiing…fans of the X Games love athletes to take enormous risks. Yet when it comes to the hosting strategy of this extreme sports event, organiser ESPN errs on the side of caution.
In the US, where it is on its 19th edition in Aspen and its third edition at the US Bank Stadium in Minneapolis, ESPN has always operated the X Games from hosting to broadcast. But before 2016, international events – in Phuket, Kuala Lumpur, Shanghai, Mexico City and the French ski resort of Tignes, for example – were operated as joint ventures with local events companies.
“Typically, we would get into some type of joint partnership with another group in the region,” explains Tim Reed, vice-president, X Games, ESPN. “For example, when we did our [winter] events in Tignes, we worked with Canal Plus on that deal. There wasn’t a full licensing – it was more of a joint venture; a type of collaboration between companies where they shared a risk and shared revenues with us.”
Over the years, ESPN gradually added to its roster of X Games outside the United States. Its biggest international expansion was in 2013 when there were games in Shanghai, Barcelona, Munich, Tignes and the Brazilian city of Foz do Iguaçu. But suddenly, the following year, it pulled back, saying: “The overall economics of these events do not provide a sustainable future path”.
“I think we learned a ton going through what we did,” Reed adds with hindsight. “We retrenched and thought about what our long-term strategy was.”
And since 2016, every X Games event outside the United States has been licensed out to local event organisers. “There’s definitely less risk involved for us this way,” Reed told SportBusiness.
Since the switch to local licensees in 2016, there have been X Games in Norway and Sydney. The former (in both the capital Oslo and ski resort Hafjell) were licensed out to sports event company SAHR Concepts. In Sydney the licensee was the huge Australian media company Seven West Media. Both countries and cities are in discussions to host events again this year.
But when it comes to global expansion, far more important are the two games planned for this year in China – a summer edition in Shanghai (“tentatively slated for June 1 to 2”), and a winter edition later in the year, still waiting on a host city. Asian sports event company REnextop Entertainment will be the licensee for both games.
X Games interest in China is easily understandable. Just under 30 per cent of Chinese (about 425 million people) are aged under 24 years, well within the X Games target demographic of 12 to 34 years. Sports featured at X Games currently include BMX, motocross, skateboarding, esports, skiing, snowboarding, snowmobiling and snow-motorcycling, all of which primarily appeal to younger audiences.
It also allows ESPN to tap into a Chinese appetite for extreme sports being stoked by the Chinese establishment ahead of the 2022 Winter Olympics in Beijing.
A recent report from China’s General Administration of Sport explained that there were plans to lure 300 million Chinese into winter sports between 2018 and 2022. And the Bank of China, an official sponsor of the Beijing Winter Olympics, has pledged CNY 30bn (€3.97bn/$4.46bn) to Chinese winter sports.
“The push for action sports is the reason why it makes sense in China,” Reed says. “There’s a halo effect for everyone involved in action sports.”
The work of the licensee REnextop, whose experience lies in Asian surfing and boxing events, will be key to the success of the Chinese X Games. REnextop will negotiate on behalf of ESPN with Chinese contractors, broadcasters [currently Tencent for the Chinese market] and government officials. “They’re going to plan, produce and operate the events, and we’ll be there to guide and support them,” Reed explains.
Choosing host cities
While bids occasionally come from cities wishing to host X Games, the normal procedure is for ESPN to target host cities where they know there’s a proven culture of and appetite for action sports.
“Rather than go out there with a bid process, we’ve been trying to work with our regional offices [around the world],” explains Reed. “[We want to] talk to sponsors and TV networks and work out strategically who the right partners are. Is there a relevance for the sports and athletes, for example?”
He cites the example of X Games Norway, and how many top action-sports athletes hail from the Nordic countries; or X Games Sydney, which attracted so many of the top skateboarders, BMXers and moto-cross riders from across Australia.
That said, Reed is always keen to discuss hosting bids that come out of the blue. “There is a second path where cities may reach out to us and say, ‘Hey we’re interested in hosting the event. Here is what it could look like’. We keep ourselves open to those discussions and potential developments. If it’s a city that isn’t on our initial target list of where we would want to go, we remain opportunistic.”
X Games’ agreements with local licensees vary city to city. The local production company? gets a portion of the profits, as does ESPN. “The [local] production company solicits funding from sponsorship and other ways to drive the revenue they need to support the event,” Reed says. “Typically it’s on the licensee to then figure out how they’re going to establish potential revenue resources and cover operating costs of the event.” The local production company is encouraged to use its local knowledge to run the event and foster a fan base.
However, ESPN is always on hand to advise on business strategy, logistics, production and brand guidelines. “We make sure the brand lives up to what we’ve built it up to, to date,” Reed says. “So we act as an executive producer over the event.”
Reed believes cities benefit enormously from being allied to the X Games’ youthful brand. Back in 2015, Oslo’s vice-mayor Hallstein Bjercke said: “The X Games is a young brand with a young audience and is the perfect platform to show not only our sporting side, but also our cultural and urban qualities to the world…Oslo is the fastest-growing city in Europe. We want to reach young people because we need to attract future professionals.”
“One thing Aspen has seen [as a host city] is that X Games brings in a totally different, younger audience,” Reed says. “When they get [an X Games fan] to come, the potential for that visitor to come back is really strong. It’s the same with [other cities]: if you show the city as a fun, young, vibrant place, you’ll attract a younger, different demographic.”