- Sergi Torrents, CEO of LaLiga’s new China joint venture, speaks exclusively to SportBusiness
- LaLiga to offer expanded sponsorship inventory to Chinese regional partners
- Licensing and merchandising expected to become major revenue stream
LaLiga is aiming to become the biggest overseas football league in China via its new joint-venture in the market with Mediapro and Super Sports Media, Sergi Torrents, the JV’s chief executive, told SportBusiness this week.
The first steps for the new venture will include bringing to market a new sponsorship proposition and creating a new e-commerce store and fan loyalty programme. Further ahead, extensive new online and offline activation is being considered, including esports projects, deepening the league’s existing involvement in grassroots football and opening retail outlets.
The launch of Spanish Football Commercial & Marketing Company (SFCM) was announced last month. It sees LaLiga join forces with long-term commercial partner Mediapro, the Barcelona-based, Chinese-owned global sports marketing agency, and another existing partner, Chinese sports marketing agency Super Sports Media. SSM is owned by Chinese media and entertainment group DDMC, and is LaLiga’s current media rights partner in China, under an agreement covering the six seasons from 2019-20 to 2024-25.
SFCM will commercialise LaLiga’s sponsorship and licensing rights – but not its media rights – over a 15-year period starting this year. The company is owned 49 per cent by LaLiga and 51 per cent by a new company jointly owned by Mediapro and SSM. Earnings from the JV will be split between the owners in the same proportions.
The JV was a necessary step in order to realise LaLiga’s ambitions for rapid growth in China, Torrents says.
“Through this strategy and the partners that we have chosen, this will allow us to grow faster…not only because we have investment capacity, but also because of the profile of our partners. You have Mediapro…Spain-based, but global, with different departments, different companies, that bring different kinds of expertise to the table.”
Of SSM, he says: “They can bring us deep local expertise, not only in the media business…They have a commercial team, they’ve been in the market for many years and are a truly local company…Even if you’ve been many years in the market, like LaLiga or in my own personal case, it is important to have a partner that understands completely how to develop locally.”
Torrents, who is from Spain, has been working in China for 15 years. He moved there with Spanish sports marketing firm 11, before joining LaLiga’s Chinese operation in 2014.
NBA China, the American basketball league’s highly successful Chinese subsidiary, is the obvious comparison for SFCM, but Torrents says his company is a different beast. NBA China was launched in 2008 after the league secured investment from five partners, including sports broadcaster ESPN and several Chinese financial firms, and built upon an already very strong position in the market.
“What we are doing is creating a JV with industrial partners, partners that are going to be in the day-by-day of the operation – that’s the main difference,” Torrents says. “We believe it’s the best equation for what we are doing here in China.”
China is particularly important among LaLiga’s international markets, not just because of the huge revenue potential, but also because today it is the birthplace of trends that will inevitably spread to other regions, Torrents says.
“China is a country, market and economy that evolves very fast…The sports marketing industry is evolving, and things that happen here, are going to happen later in other markets. So this is a very important market for us in that sense.”
Sponsorship will be the main revenue driver for the business, in the short-term at least. SFCM will go to market with a much bigger set of assets than LaLiga was able to offer in the past. Torrents describes the offer as a “more 360-degree solution for companies interested in working with us”.
“Our sponsorship package was not as complete as right now. Before, we were offering IP rights, a little bit of activation on-screen, some small events. Now, we have offline events, we’re going to have online events, we’re going to have advertising assets and we’re going to have media assets in this sponsorship package. So companies will have many more assets.”
LaLiga is selling Chinese regional sponsorships in four tiers in China. From top to bottom, they are: LaLiga Official Partner, LaLiga Official Sponsor, LaLiga Official Supplier, LaLiga Official License Partner.
Assets available in the packages will include:
- Use of LaLiga IP, club crests and selected player imagery within China on print, television and digital platforms
- Perimeter board advertising during matches, by way of digital board replacement technology – so only viewers in China or other selected markets will see the sponsors’ ads
- Branding on weekly social media highlights clips
- Rights to use LaLiga footage in television commercials
- Rights within iQiyi streaming coverage of LaLiga matches
- Digital rights on the LaLiga China website and social media accounts
- Launch events and activation opportunities at other official events including ‘viewing parties’.
LaLiga is also looking to develop esports projects in the market, alongside existing partner EA Sports, the publisher of the Fifa game, and potentially also in other, non-football games.
“The world of esports is huge and the opportunities in this area are very certain,” Torrents says.
Alongside sponsorship, LaLiga sees potential in e-commerce. Torrents expects online merchandise sales to account for 15 per cent of the JV’s income as early as year two or three and to grow from there.
The next step is the creation of a digital presence that incorporates an online store and a fan loyalty programme. This will build on LaLiga’s digital work in China in recent years, which has largely focused on its social media presence. It has almost five million followers across the four main social networks, Weibo, WeChat, Toutiao and Douyin.
“We’ve been pushing content on social networks to create emotional attachment with fans. The next step is to try to enlarge this community through the loyalty programme, and create the shop and commercial strategy,” Torrents says. “This is the biggest e-commerce market in the world, bigger than the US.”
China’s e-commerce sector – which had $1.9tn (€1.7tn) in sales in 2019 – is growing quickly and is a hive of innovation. SportBusiness reported recently on how sports properties are getting involved in the growing trend of live e-commerce streams.
The e-commerce plan, says Torrents, is a sign of the changing nature of sports marketing. “You have to be prepared to commercialise in a different way. Consumer trends are changing, and it’s really a time to be investing in those areas, to learn and be ready for these changes.”
Torrents summarises the thinking behind SFCM in three points. The first is that the venture in China is a necessary, evolutionary step forward for the league’s presence in the market. Second is that the JV will enable commercial and revenue growth. Third, “to do that we need to go local, to invest in more local activation, create different products and different solutions for our partners and clients.”
He does not want to comment on specific revenue targets or other goals for the coming years. But there is a simple, overarching ambition.
“Most important, I believe, is to be, among the five big (European football) leagues, the first and most successful here in China, the most influential.”