Tuesday, April 10, 2007

Money, Money, And More Money, Pt. 2

An interesting theory as to why soccer clubs are being snapped up at the moment can be found in the latest issue of Forbes. Many think (and how could one argue otherwise) that the main reason that teams in England are seen as wise investments is because of their earning potential in China. Money quote:
"A big reason why these teams are attracting suitors is their growth potential in all of Asia, but China is the key." says Salvatore Galatioto, president of the sports banking firm Galatioto Sports Partners. "You have great brands with these soccer teams that have not been fully exploited."
Two recent pre-season tours by Spanish giants Real Madrid seem to underline Galatioto's claim. The two trips, in 2003 and 2005, netted Real "$10 million from sales of replica shirts and tickets to watch its star players go up against local talent."

Some more numbers concerning soccer in China:
  • The country's fans make up roughly 20% of soccer's worldwide audience.
  • More than 100 million viewers tuned in to watch Chinese players Sun Jihai and Fan Zhiyi play for Crystal Place in the first live broadcast of English soccer on national television in China.
  • 360 million viewers watched as Everton, with Li Weifeng, faced off against Manchester City, with newly acquired Sun Jihai.
  • 260 million viewers watched the entire World Cup played in Japan and South Korea.
  • The English Premier League's latest rights deal with Guangdong Provincial Television's Wintv covers three years for $50 million, 40% more than the bid put in by incumbent carrier, ESPN Star Sports.
  • Broadband TV, owned by Hong Kong telecommunications firm PCCW, earlier this year paid $200 million in a three-year exclusive rights agreement to stream English matches (as well as the 2008 European Championship) over broadband internet connections in Asia, an increase of 122% over the previous deal.
  • The country's soccer gambling market reached $33 billion in 2006, tripling in two years and surpassing U.K.'s $30 billion industry. (Yes, the article points out that it comes out to only $25 per person in China, compared with $488 in the U.K.)

Cracking Soccer's Great Wall (sub. req'd) [Forbes]



risingson said...

Very interesting. I sometimes find it silly that in Canada, people think soccer will never happen. Sooner or later, it looks like it's just gonna take over.

Laurie said...

Have I mentioned how much I love your blog? We seem to be interested in a lot of the same tangentially-related-to-soccer stuff. I have an MBA in finance and accounting, so all of the obscure issues involving soccer and money fascinate me.

(And yes, this is the same Laurie who shares your interest in the tragedy that is Vikash Dhorasoo.)