Industry, economy and success - Chinas Great Football Vision and What the Country is Doing to Win...
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Transcript of Industry, economy and success - Chinas Great Football Vision and What the Country is Doing to Win...
INDUSTRY, ECONOMY AND SUCCESS: CHINA’S GREAT FOOTBALL VISION &
WHAT THE COUNTRY IS DOING TO WIN THE WORLD CUP
Professor Simon Chadwick
Presentation content
■ Sport industry globally and in China
■ Football industry globally and in China
■ China’s vision for sport and for football
■ Principles of and model for China’s football
■ Emergent issues
■ Conclusions
■ Readings
Global sport economy
■ Estimated size of global sports industry
- $1.5tr (Plunkett Research, 2015)
- $700bn (A.T. Kearney, 2014)
- $145bn (PWC, 2012)
■ 2010 (PWC)
- North America 41%
- EMEA 35%
- Latin America 5%
China’s current position
■ 2006: sport industry worth US$1.8 billion (Statista, 2015)
■ 2010: US$2.9 billion
■ 2015: US$3.5 billion
■ Otherwise….?????
China’s industrial vision for sport
■ President Xi’s proclamation in November 2014
■ To create a domestic sport economy worth US$850 billion by 2025
■ Football to be focal point in drive towards this vision
■ Country to successfully bid for World Cup
■ Country to win the World Cup
■ Enabled by the state, delivered by the private sector
Global football economy
■ 2013 (A.T.Kearney)
- $25.1bn in 2009
- $35.3bn in 2013
- EMEA accounted for 43% of total industry size
- North America 38%
- Asia Pacific 13%
- Latin America 6%
China’s current position
■ On the field: men’s team FIFA ranked in 84th place (women’s 13th)
■ 2018 World Cup qualifying P5 W0 D2 L3 Pts2
■ World Cup record: qualified once (2002) - P3 L3
■ “The players have rarely played like men”
■ But….
■ Guangzhou Evergrande – Asia’s first super club?
English Premier League
■ English Premier League (Ernst and Young, 2015)
- £2.4bn tax contribution to the British economy
- 103, 354 supported jobs
- £3.4bn contribution to GDP
China’s vision for football
■ By 2020: 20,000 specialist football schools, 70,000 pitches, between 30 million
and 50 million primary and middle school students regularly playing the game
■ By 2030: 50,000 specialist football schools, China’s male national team to be one
of Asia’s best, female national team to be established as being world-class
■ By 2050: a first-class football superpower in top-20 FIFA rankings, have hosted and
won the World Cup
Why football?
■ The people’s game
■ The global game (hard power!)
■ Economy and industry
■ Soft power and diplomacy
■ National identity and nation branding
■ Health and well-being
■ Socio-cultural factors
China’s model for football
■ A hybrid
- Japan
- Europe
- United States
Principles of China’s model
■ Top-down investment
■ Bottom-up investment
■ External acquisition
■ Network influence
■ Football diplomacy
■ Entertainment
Top-down investment
■ Investment in football properties at the elite professional level of the game
■ Examples: overseas clubs – Atletico Madrid; sponsorships – Wanda; players –Hulk; managers – Marcello Lippi
■ Competence acquisition
■ Knowledge
■ Learning
■ Point of engagement
■ Heroes and icons
■ A quick fix?
Bottom-up investment
■ Investment in football at the grassroots level
■ Examples: Evergrande Academy in Guangzhou; Chongqinq Sports Campus
■ Sustainable supply of highly skilled labour
■ Numbers unprecedented
■ Long lead time in talent development
■ Inward flow of foreign coaches
■ Issue of coaching, as well as playing, competence
External acquisition
■ Acquisition of football properties at three levels
- Competence e.g. Manchester City
- Revenue-generating properties e.g. Infront Sports and Media
- Networking e.g. Ali E-Auto & Club World Cup
■ Broader industrial development issues
- Resource acquisition e.g. Angola 2011, Gabon 2017
- Political influence e.g. HS2, Northern Powerhouse
Network influence
■ Internationally, engaging in investments that contribute to the achievement of
China’s ultimate football goal
■ Wanda Corporation: Atletico Madrid, Infront, FIFA sponsorship; FIFA presidential
elections May 2015
■ Fosun: Wolverhampton Wanderers, Gestifute, Anderson Talisca, HS2
■ CMC: Manchester City, City Football Group, campus model, Abu Dhabi, Etihad, HS2
■ Domestically, also widespread engagement in football investments
■ Evergrande Real Estate Corporation, Alibaba
Football diplomacy
■ A game played on two sides
■ 2011 African Cup of Nations in Angola
■ Four stadiums built at cost of US$500million
■ China biggest consumer of Angolan oil
■ In GB, lineage from Tony Blair to George Osborne
■ Blair – a lever to enable market entry
■ Osborne – as a means to attract Chinese investment
Entertainment
■ Football at intersection of entertainment and social media
■ Massive Chinese growth in both areas
■ Alibaba (Guangzhou, FIFA sponsor), Suning (Jiangsu, Inter Milan), China Media Capital (Manchester City
■ Wanda’s Wang wants ‘to create an entertainment axis stretching from Beijing to L.A.
■ 20% stake in Atletico Madrid
■ AMC cinema business
■ Legendary Studios in Hollywood
■ Golden Globes
■ Considering a bid for Paramount Studios
■ Ownership of Infront Sports and Media
Emerging issues
■ Aligning vision, goals, implementation and management
■ Reconciling short- and long-term challenges
■ Grassroots –v- elite professional levels
■ Raised expectations among fans
■ Social unrest
■ ‘Face’
■ Strategic drift
And more emergent issues
■ Role of corporate hawks and intermediaries
■ Issues in creating horizontally and vertically integrated businesses
■ Integrated football supply-chain
■ Governance, network influence and multiple ownership
■ Football as entertainment and social media content
■ Extent to which football can deliver on China’s soft power and diplomatic agenda
■ Extent to which football can deliver broader investment returns
Conclusions
■ Bold vision allied to a seemingly sensible strategy
■ Attention often focuses on ‘big money’ and ostentatious expenditure
■ But grassroots receiving attention too
■ Implementation and management challenges
■ Range of other issues that are already posing issues for the international football community e.g. multiple ownership of sports properties
■ World Cup bid, national team, World Club Cup, Guangzhou Evergrande, Asian Champions League
■ Will China succeed?