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Kevin McCullagh | Asian industry set for a more local complexion as Western power wanes

There is evidence that the sun is setting on a Western-dominated era for the sports industry in Asia, and that the coming years will be much more locally-driven. Kevin McCullagh examines how the roles of the big Western and global agencies will change.

Kevin McCullagh

It has been a year of upheaval for the sports industry’s big Western companies in the old colonial centres of Hong Kong and Singapore. The cities have long served as staging posts for sports organisations seeking footholds in Asia, and major agencies and rights-holders have built profitable businesses in them. But the pandemic and a longer-term slide in the media-rights business has weakened the power of Western agencies and rights-holders.

There is a sense of the sun setting on a Western-dominated era for the sports industry in Asia, and that the next era will be much more locally-driven. This is coinciding with Asia, and particularly China’s, increasing ability to take control of their own destinies and unhook themselves from Western economic and political support. In the latest manifestation of this, last Sunday, 15 Asia-Pacific nations, including China, Korea, Japan, most Southeast Asian countries, Australia and New Zealand, signed one of the biggest trade agreements in history.

In the competition for Asian eyeballs, the Western sports brands that have been so popular for so long are facing a powerful challenge from home-grown entertainment in a variety of genres. K-pop, Korean and Chinese television dramas, locally-produced social media applications, and locally-produced gaming content, are all crowding the space for sport and whetting appetites for locally-produced material.

There is a desire across Asia to create home-grown companies and heroes, and to see them compete and win on the international stage. Indeed, there always has been, but increasingly the resources and expertise are available to turn these desires into reality. That the region has played second fiddle in world affairs to Western powers for several centuries, and that this was not the case historically, is not lost on Asian audiences and consumers, particularly in rapidly-ascending China.

The shift raises intriguing questions and possibilities for the sports business in Asia. Can local properties emerge to compete for audiences with the big Western properties, and the other entertainment genres? Can Asian domestic sports properties build pan-Asian audiences? Will the investments by Western properties in shoring up their Asian fanbases be successful? How will the roles of the big Western and global agencies change?

There have been notable downsizing and executive moves this year at some of the sports industry’s blue-chip, Western-headquartered operators in the region. In Singapore, the Sportfive agency shed a large percentage of its workforce and moved out of dedicated offices and into shared office space. This was largely linked to the ending of the company’s long-term relationship with the Asian Football Confederation. Two of the Mediapro agency’s most senior Asia-based salesmen departed in recent months as part of a cost-cutting drive by the Spain-based firm. Nielsen Sports shut down its entire Singapore-based operation, with the loss of around 10 staff. There have been changes at IMG, with the head of the agency’s Asian media-rights business being promoted back to London, with his duties taken over here by two long-serving, locally-based sales executives. Senior executives also departed IMG offices in Seoul and Hong Kong. Sports streaming platform DAZN has pared back its Singapore office from 16 staff to just two.

Asian media companies have in recent years balked at the big media-rights fees that used to underpin much of the agency business here. Some are instead turning to local properties that are cheaper, and over which they can have a greater degree of control to fashion suitable content, as well as build long-term partnerships with. Indonesian OTT platform Mola TV has halted investments in media rights for overseas properties, after a splurge on content over the last couple of years to support its launch. Thai production company Zense Entertainment has made a large, long-term investment in Thai domestic football, around which it plans to create a host of ancillary television programmes for the local market. Malaysian pay-television broadcaster Astro has been reining in spending on international sport, and has put a big focus on its esports and gaming channel eGG Network, which features a large amount of content created locally and elsewhere in Southeast Asia. Looking further back, DAZN’s 10-year investment in Japanese J-League rights was a massive vote of confidence in the domestic league’s potential, albeit one that has been recently reevaluated.

There have been other notable eastward shifts this year. For example, the Chinese influence in table tennis has grown, in the form of financial backing for, and senior executives taking roles at, the new World Table Tennis unit. China’s successful control of the Covid-19 pandemic allowed Macau to be the base for the International Table Tennis Federation and WTT’s #Restart series of events, currently underway. These have welcomed players from around the world and marked the re-emergence of table tennis from the pandemic shutdown.

Meanwhile, big Western rights-holders ramp up local marketing activity and seek to increasingly tailor their offerings for local audiences. And, as the relatively young Asian sports industry matures, increasing numbers of local staff are emerging in senior positions.

The days of big agencies and Western rights-holders running successful businesses out of regional, city hubs may not be over. But they are certainly having to work harder for their money.

And the complexion of the Asian sports industry looks set to become increasingly local – determined by local trends and demands, local organisations, local culture, and local people.

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