1. 1 Volume 1, Chapter 3 Perspectives on the sports industry in China

2. 2 Seminal moments in China’s sports history 1971 Ping-pong diplomacy Demonstrate its friendly intentions to world Sports as international ‘ice breaker’ and demonstration of strength 1984 Olympics Promote China’s rise as international power 1994 Establishment of Chinese Football Association First experiment in commercial sports league 2008 Olympics Showcase its history, culture, power

3. 3 Trends in China’s sports industry-1 Constant reform Consumers often lead the reform, markets develop before policy changes implemented Success of Heineken Open tennis tournament in Shanghai in 1990s-2000s, lead to Shanghai Masters since 2002, ATP World Tour Masters 1000

4. 4 Trends in China’s sports industry-2 “Politics, not commerce”, the role of Sports Administration in China’s government Primary objective: gold medals Secondary objective: revenue generation for the bureau, to help meet the primary objective, but can not conflict with the primary objective Primary goals for officials: to preserve their careers International companies should consider when dealing with China’s officials

5. 5 Trends in China’s sports industry-3 Rising inequality between upper/middle classes and lower class Greater interest for sports opportunities to interior or less-developed regions Sport industry as a method for economic development in interior regions? International sports properties could gain tremendous political goodwill and operate in favorable conditions by hosting events in 2nd or 3rd-tier cities

6. 6 Challenges to sports industry in China -1 Conflicting objectives Challenge for foreign sports organizations, especially in non-Olympic sports, to provide solution that benefit gold medals and/or revenue NBA vs Team China, preseason games Allow authorities to claim support for Olympics Increase local revenue

7. 7 NFL in China NFL: grassroots strategy to build interest Proposed a preseason game in Beijing before Olympics to attract more American tourists, eventually cancelled but left good impressions to local officials Flag football league at junior high since 2003, extend to universities Key strategies of NFL partnership with local marketing agencies Build relationships with local authorities Role-specific partnerships for various functional duties: digital/internet agency, broadcasting partner, research agency

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10. 10 Formula One in China Working with key officials in Shanghai city government Emphasize on enhancing economic development, raise international profile of Shanghai High-level officials in municipal government pushed Formula One through local sports bureau as higher priority Traditional hierarchy of system worked for FO

11. 11 Media in China State-controlled China Central Television Broadcast rights for sports properties extremely low Strict government control of content Lack of commercial focus Monopoly power control price on rights fees Sporting events difficult to grow Sports market in China mainly funded by sponsorship revenues, not TV or other media rights Paid US 25 M for broadcasting 2002 and 2006 FIFA World Cup, receive US 125 M in advertising revenue in 2006 alone

12. 12 Challenges to sports industry in China -2 Legal system: interpreted by judges to maintain social harmony Sports properties conflict with government bodies difficult to protect their interests Success: strong relationship with local and regional government coupled with mutual beneficial goals between entity and government partner If use contract to force the actions  compromises rarely reached Improved recently to offer greater protection and encourage top brands to enter China Still far behind in legal protection

13. 13 Challenges to sports industry in China -3 Sports participation traditions athletes do not ‘rise to the top’ from grassroots or community sports competitions Trained in specialized sports schools Teaching teamwork through sports? Under current one-child policy

14. 14 Common mistakes for international companies Work with global agencies that lack local knowledge Enter market at national level Rugby Federation spend US 1 M in 2000, mostly went to Sports Administration, no effect

15. 15 Opportunities for sport in China Primary concerns Enhance social, physical, economic welfare of state and people Benefits to Sports Administration, people, other government agencies Developing grassroots events Rising income and youth-obesity problems in large cities Teaching fundaments of teamwork: a prime concern of Education Ministry Large, 2nd-tier cities hope to receive world class exposure to enhance their stature Can get support from central government