A GUIDE TO THE EXPLOSIVE GROWTH OF SPORTS IN CHINA 2016

THE 5 KEY AREAS

DIGITAL

THE PAYWALL

NATIONAL PRIDE

CHINESE SUPER LEAGUE

INVESTMENT

01

02

03

04

05

01 DIGITAL

01 DIGITAL

WeChat is the fastest growing social media platform in the world, gaining 150 million monthly active users this year alone.

However, it is so much more than just a social media network.

It effectively combines Facebook, Uber, Foursquare, PayPal, WhatsApp, Skype and many more.

Additionally, constant innovation sees them roll out new features every month which perfectly integrate themselves into the lives of Chinese consumers.

Weibo has gained 70 million MAUs this year, over the same time period, Twitter has lost 3 million users.

It also now boasts more mobile users than Twitter.

It’s still the number 1 platform in China for breaking news and viral content; and it’s where sports fans go to first.

Records are broken regularly: most recently Kobe Bryant’s #KB20# hashtag went viral during his final game, reaching 1 billion reads, a first in China.

2016 OVERVIEW

Mobile live streaming. Now anyone can build a video audience through their phone.

With 200 new apps and a combined user base of more than 300 million, it is the latest digital trend in China.

Chinese platforms are leading the worldwide revolution in terms of functionality, innovation and active users.

The three leading platforms are: Penguin, Yizhibo and Inke.

Appetite for live streaming in China is huge.

App downloads increased 4 fold in the first half of 2016.

Sports bands and talent have begun to tap into this market.

Following his final Olympic gold medal, Michael Phelps was able to attract 500,000 live viewers at 6 am in China.

Platforms have also begun to integrate social payment and social gifting, meaning that live streaming is becoming a viable revenue opportunity.

Kobe Bryant recently featured in his first live stream and raised over $12,000 for the Kobe Bryant China Fund from the 5.8 million viewers.

01 DIGITAL

WHAT’S NEW

02 THE PAYWALL

There has been a lot of development in sports subscription models over the last year.

This has come through a combined effort from all of the major Chinese IPTV broadcasters.

Premium sports content is now behind the paywall and although development is sure to continue, the era of the paywall has begun in China.

02 THE PAYWALL

The first NBA model with Tencent provided one fixed fee, season long subscription to access content.

For the 2016/17 season, Tencent now provide several personalised options, including one-club-only packages and short term subscription options.

The NBA on-demand League Pass has also, finally, been made available, giving fans ultimate viewing flexibility.

In 2015, the big question was:WHEN WILL FANS START PAYING FOR CONTENT?

Evidence shows that Chinese sports fans are now coming to terms with paying for content.

The first game of the 2015-16 Premier League season had around 500,000 paid viewers.

Fast forward 12 months, and there were over 8 million paid viewers for the same fixture of the current season.

Various networks have stated that their focus is now shifting from the rights acquisition race to honing their products and subscription platforms.

That said, don’t expect spending to stop.

Once broadcasters identify the most popular content and how best to structure the platforms, bidding will only get more intense.

02 THE PAYWALL

03 INVESTMENT

03 INVESTMENT

INTERNALTwo years ago, President Xi rolled out his ’50 point plan’.

At the time, China’s sports industry was about 0.63% of the countries GDP.

To put that in perspective, most Western countries are at around 2-3%.

Since then, a multitude of sports funds dedicated to growing the domestic industry have emerged.

If we look at just the top 8, investment has topped $2.3 billion over the past 4 years across 247 sports deals.

More impressive still is that of that, $1.6 billion was invested in just the first half of 2016.

The targets include: 100 million active children under 6, growing sport in China to a $1 trillion industry and getting 50 million people playing football by 2025.

“The money going in and out of China has dominated ..headlines worldwide more than any other area”

David Hornby, Head of Sport

03 INVESTMENT

In the last two years, over $2 billion have been invested into European football clubs.

This was triggered by Wanda’s acquisition of Atletico Madrid, and has ranged from major clubs like Inter Milan to minor teams, like Wolverhampton Wanderers.

EXTERNAL

Investments have also been made in Basketball through the Minnesota Timberwolves and sports agency MP & Silva.

The two biggest International football tournaments, the FIFA World Cup and UEFA European Championships have also received major Chinese sponsorship recently.

04 CHINESE SUPER LEAGUE

In terms of value, it is the fastest growing football league in the world, increasing 80% in 2016.

The most recent domestic rights were sold for $1.26 billion, a 20x increase on their previous deal.

04 CHINESE SUPER LEAGUE

This year’s January transfer window saw more records broken.

The CSL became the highest spending football league globally, beating even the Premier League when it spent a collective $366 million on players.

Even more impressive is that in 4th place was Chinese League One, spending more than both the Bundesliga and Serie A.

DOMESTIC OUTDOING THE FOREIGN LEAGUES

The CSL has more followers on Chinese social media than the top European football leagues combined.

However, it now has internationalisation on its agenda. The latest season was broadcast in 53 countries worldwide.

The most recent deal was made with Sky Sports to broadcast 2 fixtures live in the UK each week.

04 CHINESE SUPER LEAGUE

05 NATIONAL PRIDE

Contrary to popular stereotypes, China’s sports fans are most interested in watching their own teams.

Each of the top 10 most viewed football matches last year all featured either the Chinese national team or a CSL club.

05 NATIONAL PRIDE

Likewise, at the Olympics it was not the history made in the pool, the velodrome or on the track that attracted the most attention.

Badminton totally dominated with the men’s singles final attracting an audience of over 100 million.

The Women’s volleyball final came a close second.

A POWERFUL QUALITY

In another example of team China Power, Fu Yuanhui, the young Chinese swimmer who became an online sensation following her performances in the pool and in interviews, gained 7.5 million Weibo followers in two weeks.

05 NATIONAL PRIDE

To put this into perspective; Cristiano Ronaldo, one of the most popular footballers in China, gained 700,000 followers in his first two months on the platform.

It’s not just mainstream sports. On the other side of the world, CCTV broadcast the NHL draft for the first time as 2.5 million people watched Song Andong become the first ever Chinese athlete to get drafted.

President Xi’s plan has been implemented faster and more successfully than expected so far, As yet, there are no reasons to believe that his ambitious 2025 goals will not be achieved.

WHAT DOES IT MEAN?

For China

1. Demand for sports content is high and the value of rights is increasing.

2. The goal of increased spending is to grow domestic sports market.

3. Within 10 years, Chinese sports teams and leagues will compete on a global level.

4. By 2025 China will be the biggest and most valuable sports market in the world.

For the rest of the world

Mailman is a leading China sports marketing agency. We represent the world’s most influential sports organisations, teams and athletes in China. Our services include:

- Digital media - Tour activation - Sponsorship sales - China Market strategy - Media & brand valuation - Media rights negotiation - Chinese investor relations

ABOUT MAILMAN

For more information, please contact us.For English:Andrew Collins Group CEO andrew@mailmangroup.com 13402081987For Chinese:Justin Tan Partnership Director justin@mailmangroup.com 18621767921

www.mailmangroup.com

FOLLOW US