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Chinese mass participation growth a focus for Wanda after IPO

  • China-based parent company of the Infront agency and Ironman planning IPO on New York Stock Exchange
  • Prospectus states Chinese revenues currently contribute only a small proportion of revenues
  • Chinese Mass participation revenues estimated to have grown by 44.8% between 2014 and 2018

Increasing revenue from China, particularly from mass participation properties, is one of the central planks of Wanda Sports Group Company’s plan after its forthcoming IPO in the US.

WSGC, the China-based parent company of the Infront agency and Ironman triathlon operator World Endurance Holdings, this week revealed plans to sell shares on the New York Stock Exchange. Ahead of the initial public offering (IPO), the company filed a prospectus with the US Securities Exchange Commission which detailed its expectations for the future of the business.

The prospectus states that WSGC’s business in China currently contributes only a small proportion of overall revenues, but that the company will be seeking to increase this on the back of the growing market. It identifies mass participation as a particularly strong growth sector, albeit from a low base.

WGSC operates several significant mass participation events in China, including: Ironman 70.3 triathlon events, the Rock ‘n’ Roll Marathon Series, and the Double Heritage Series of marathons. It organised 30 sports events in the market in 2018, attracting 150,000 participating athletes.

Total Chinese mass participation sports sector revenues are estimated in the prospectus to have grown from €25.8m ($29.14m) in 2014 to €113.5m in 2018, a 44.8-per-cent compound annual growth rate. Growth is predicted at 20.7 per cent CAGR to €240.9m in 2022. The number of competing mass participation athletes was estimated to be 132m in 2018 and is expected to be 179m by 2022.

The prospectus states: “Sports participation in China has been growing due to increasing income levels and the rising middle and affluent class. Higher standards of living have contributed to awareness of the importance of a healthy lifestyle and the need to maintain fitness through sports. Recently, the popularity of marathons, half-marathons and other running events has reflected the growing participation in sports. Similarly, a large and active millennial population and rising incomes for China’s middle class has resulted in more disposable income for gym memberships and fitness classes.

“In support of these trends, the country’s State Council unveiled a five-year fitness plan targeting 1.5 trillion Chinese yuan (approximately €225 billion) in national spending on sports and fitness by 2020. With government promotion of nationwide fitness and raised public awareness of personal fitness, the mass participation sports market in China is predicted to further increase to €240.9 million in 2022, growing at a CAGR of 20.7% from 2018 to 2022.”

Other opportunities

The prospectus projects that the wider Chinese sports media and events market, comprising elite sports as well as mass participation events, will continue a strong recent growth pattern. It estimates the market grew in value from €4.3bn in 2014 to €6.4bn in 2018, an 11 per cent CAGR. It projects slower, but still strong CAGR of 9.6 per cent from 2018 to 2022, to a market value of €9.3bn.

WGSC’s work in China, beyond mass participation, has recently included projects with:

  • The CBA, covering the sale of sponsorship and media rights for the CBA League and All-Star Games
  • The Chinese men’s and women’s national basketball teams
  • The 3×3 Road to Olympics basketball tournament
  • Fiba, as exclusive partner for Chinese domestic commercial rights related to the Basketball World Cup 2019
  • The China Cup International football tournament
  • The UCI Tour of Guangxi cycle race, part of the UCI World Tour
  • The UCI Urban Cycling World Championships.

“A growing Chinese economy and introduction of foreign sports events have served to cultivate the sports consumption market and sports fans,” the prospectus reports. “Dynamic international sports events, such as the UCI Tour of Guangxi, have been imported to China. Meanwhile, with a broad fan base and established infrastructure, viewership of sports events has increased.”

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