Will China Continue To Invest Heavily In Football After World Cup?

CEO of global gaming brand LeTou, Paul Fox, examines the country’s post-tournament intentions.

Chinese brands took full advantage after several of FIFA’s sponsors opted against renewing their deals with the governing body ahead of this summer’s World Cup.

Companies such as Wanda, Hisense and Vivo have received vast exposure and despite not having a national team compete at the tournament, China has maintained a strong presence throughout.

But as the World Cup concludes, what does the future have in store for these Chinese brands and others that wish to enter the sports sponsorship market?

It is clear that this investment will not be a one-off. President Xi Jinping actively encouraged brands to get involved with sponsoring the FIFA World Cup and has spoken of his aims to turn China into a footballing superpower.

President Xi’s desire is to drastically improve Chinese football from grassroots level and for the national team to qualify for another World Cup, host the tournament and eventually win it.

With western brands continuing to distance themselves from FIFA amid the ongoing corruption and bribery scandals facing the organisation, Chinese sponsors seem one of the only viable long-term options, perhaps coupled with those from Russia and Qatar where the next World Cup will be staged.

Should the 2022 World Cup go ahead in Qatar then it is highly unlikely that western brands will come flooding back due to the concerning human rights issues in the country.

This provides China with the perfect opportunity to become synonymous with FIFA and many in the country believe that it will enhance their chance of hosting a World Cup in 2030 or 2034.

As the World Cup ends, the Chinese Super League returns and despite the government cracking down on inflated spending last year, the competition remains able to attract high-profile players from across the globe.

Yannick Carrasco moved to the league from Atletico Madrid and Brazilian international Paulinho recently returned to Guangzhou Evergrande after a successful season at Barcelona.

But there is now a 100 per cent tax on transfer fees of more than $7 million and investment has instead largely shifted to improving facilities and the coaching of young players in China.

The league continues to grow in value for sponsors, with Ping An Insurance announcing a new $145 million five-year deal to be the major sponsor last year.

Part of the draw for sponsors is that Chinese fans are heavily influenced by sponsorship and marketing, with brands enjoying increased credibility by being associated with professional clubs or leagues.

Last season’s English Premier League saw numerous Asian companies, such as ourselves, sponsoring teams in the top flight and that trend is continuing again this year.

Brands are also becoming more active in their sponsorships, with many partnering with clubs to create official Weibo and WeChat content and engaging with fans all year round.

We can expect to see new Chinese brands from a range of industries activating football sponsorship deals over the coming years, but they will only invest when the price is right.

The days of overpaying for deals are now gone, but Chinese sponsorship in football is not going anywhere as the country aims to remove its tag as a football minnow.

Paul Fox is the CEO of global gaming brand, LeTou.

The rise of betting partnerships in the Premier League

Last month the Labour party announced that football clubs will be banned from signing shirt sponsorship deals with betting companies if the party comes to power.

I can see why Labour has concerns around this issue and agree that more needs to be done to help individuals with gambling addictions, but I am not sure that banning shirt sponsorships is the right move to make.

Instead, the industry and the government must come together to protect those that are vulnerable. By working with sports administrators and heads of betting companies, politicians can fully understand and address the challenges that exist and create a plan of action to help the people that need it.

There are already measures in place to ensure visibility of the sponsor is restricted; for example, we have no logo visible on the Swansea City children’s shirt, but perhaps more could be done.

The fact is that football and betting have always been linked, going hand-in-hand like horse racing and gambling, with punters previously going down the bookies before the internet changed the face of the industry.

The Premier League now accounts for the highest number of football bets across the world, but it is not the reason that betting companies become shirt sponsors.

At LeTou, we have long been established in the Asian and international markets, but prior to sponsoring the Swansea City shirt this season we were not so recognisable in the UK. Having a logo on a Premier League shirt gives organisations instant credibility with customers, safe in the knowledge that their money is with a reputable company.

A lot of the growth in betting companies sponsoring clubs has come from brands in Asia, with operators wanting to be compete with rival organisations. As a result of this, it can be challenging to stand out in a very crowded market of online bookmakers.

The first thing that I did after signing the contract with Swansea City was to remove the Chinese characters from our logo on the shirt to ensure that we were viewed as a global brand. Asian companies are often seen as being faceless, simply writing a cheque, putting their name on the front of a shirt and never to be seen again.

But I believe that building a relationship with the club is far more meaningful. This is why we immediately donated our entire corporate hospitality and season ticket allocation to two local charities. I’d like to see more betting companies follow our lead to help create a positive association with the industry.

It will be interesting to see whether betting partnerships will continue to grow as rapidly over the next few years as they have since the first deal was signed with a Premier League club in 2002.

Should Labour get into power then these agreements may disappear entirely, but until then there is unlikely to be a drastic change while prices remain more competitive for clubs outside of the top six.

That said, I do believe that the glass ceiling has now been reached for many Asian operators in terms of cost, so we could well see the return of more Western brands over the coming years.

READ MORE: The pros and cons of betting sponsorship in football