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The inside view as China sacrifices international sports events

A security guard wearing a facemask amid concerns of the COVID-19 coronavirus, secure an area at the Olympic park outside the national 'Birds Nest' stadium (up), the site of the 2008 Beijing Olympics, in Beijing on March 24, 2020. - The 2020 Tokyo Olympics have been postponed to no later than the summer of 2021 because of the coronavirus pandemic sweeping the globe, the International Olympic Committee announced on March 24. (Photo by NICOLAS ASFOURI / AFP) (Photo by NICOLAS ASFOURI/AFP via Getty Images)

  • General Administration of Sport has ruled out ‘most’ international sports events
  • Market insiders expect GAS to show some flexibility
  • For sports events that planned to go to China in 2020 there will be a hit to revenues

The Chinese government recently said the country will not be hosting most of its planned international sports events this year, putting in doubt major events including the Formula 1 Grand Prix in Shanghai and the season ending WTA Finals in Shenzhen.

The move was announced in the plan for the resumption of sport in the country published by the General Administration of Sport on Thursday, July 9.

The GAS said a small number of events would be allowed to go ahead, including Beijing 2022 Winter Olympics test events “and other important events”. It added that “in principle, no other international sports events will be held this year”.

Chinese domestic sport has begun to restart, with the CBA basketball league resuming its 2020 season last month, and football’s CSL set to restart later this month. In both leagues, matches are taking place behind closed doors and are being played in just two cities designated by each competition.

That restart was based on the Chinese authorities’ plan of resuming sports events “based on science and order”.

Following the GAS announcement, events have begun to be cancelled. This week the International Federation of Sport Climbing cancelled three World Cup competitions scheduled in Chongqing, Wujiang and Xiamen between October 23 and December 6.

However, in an indication of flexibility in the GAS rules, the International Skating Union Grand Prix Final will go ahead as planned in Beijing in December, preceded by a qualifying event, the Cup of China, in Chongqing in November. The Grand Prix Final is designated as an Olympic qualifying event. The Cup of China is not, but gets the go-ahead because it is a qualifier for the Final.

With high-profile events in China in the second half of 2020 in the crosshairs, SportBusiness asked three local industry insiders for their thoughts on the potential for disruption.

Mark Thomas, managing director, S2M Consulting

“It’s a pretty eye-grabbing headline and at first glance the document produced by the China General Administration of Sport looks fairly definitive with regards to a moratorium on international events in 2020.

“However, the use of the wording “except for Beijing 2022 Winter Olympic test events and other important events, in principle, no other international sports events will be held this year”, gives a certain amount of flexibility for Chinese authorities and event organisers to play with.

“I can understand the tough stance and it’s the right thing to do under the current circumstances, but for those who know China there are usually grey areas around laws, rules and regulations, and the art is to navigate your way to solutions.

“I am hoping there is enough grey area here to leave some flexibility for events like Formula 1, the Women’s Tennis Association, etc., to find a solution for this year.

“Hope for the best and plan for the worst! As China has pretty much cleared Covid, it’s the rest of the world getting Covid under control that holds the key for China, and indeed everywhere else, to ease restrictions on international events, and I fear we have a long way to go there.”

A health worker checks the temperature of a man entering the subway in Beijing (by Betsy Joles/Getty Images)

 

 

 

 

 

 

 

 

Tom Elsden, business director, Mailman

“The announcement was incredibly vague and has not answered any of the sponsors or sports IP’s concerns about the sports events planned for the rest of this year.

“Sports IP are continuing to plan as if they are going ahead, they have no other choice and must maintain this position with their partners. The challenge is how can they fully activate sponsors’ rights, especially onsite, when there are no fans. Sponsors will rightly be wondering how they can generate the same value at the events, and will need to be creative in their direct-to-consumer activation.

“If the major events are cancelled, including the WTA Finals in Shenzhen, BWF World Tour Finals in Guangzhou, and WGC-HSBC Champions in Shanghai, then this will have a significant impact on the sponsors.

“You’d hope that there are back-up plans already for this scenario, with rights shifted into 2021 or more likely into the digital space. Some other sponsors may consider the long-term relationship, especially those with deals that are running out in 2020.”

A general view of the grid before the F1 Grand Prix of China at Shanghai International Circuit on April 14, 2019. (Photo by Charles Coates/Getty Images)

Mark Fischer, chief commercial officer, East Asia Super League

“As seen by the return of the CBA and the CSL, China is taking a leading role globally on bouncing back from the effect of Covid-19 with its domestic sports competitions.

“Yet for leagues like the CBA and the CSL now holding games without spectators on site, as well as for their counterparts overseas, the lack of live audiences obviously impacts not only matchday revenue but also sponsorship value.

“The latter is true particularly for those brands seeking the benefits of corporate hospitality, such as by entertaining clients or rewarding key staff, or consumer brands seeking direct engagement opportunities via product displays and sampling around live events.

“For sports events that were planning to come to China in 2020 and now need to be postponed indefinitely, cancelled completely, or moved to less desirable venues, clearly there will be a hit to 2020 revenues that may never be replaced.

“As far as the impact on future events, with all the uncertainty over how things may evolve with Covid-19, rights-holders need to be prepared for various possibilities going forward. On top of everything else to prepare for, we all must especially consider and anticipate travel and immigration restrictions.

“Thus it is critical for sports properties to engage fans in innovative ways during such periods of limited live engagement.”

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