Behind the 8 billion yuan and three companies, the situation of Chinese culture in sports and content investment

On October 28, just three days before the closing of the Super League, Super League and Sports Olympic Power announced in Beijing that the latter won the bid with a bid of 8 billion yuan and became the Chinese Super League TV public signal production and copyright partner for the next five years.

This year's Chinese Super League left suspense until the final round.

Last Saturday, after defeating Beijing Guoan 2:0 away, Evergrande won this season's Super League championship with a 2-point advantage and completed five consecutive championships against the Chinese Super League.

Evergrande's sudden rise in the past five years has largely relied on the group's investment in the team regardless of cost. Since acquiring the team for 100 million yuan in 2010, a total of 2 billion yuan has been invested in the first three years alone, and the average investment in the past two seasons has also ranged from 500 million to 600 million yuan.

The money helped Evergrande hire world-class coaches and teams such as Lippi and Scarari, and acquired a large number of high-level first-team players through domestic and foreign transfers, opening the gap with other Super League teams.

Beijing Guoan, Shandong Luneng and Shanghai Shanggang have also created a lot of "trouble" for Evergrande by increasing investment. However, apart from these few teams capable of launching an arms race, the overall gap between rich and poor in the Super League has been widening in the past few years.

However, this situation may change starting next season.

On October 28, just three days before the closing of the Super League, Super League and Sports Olympic Power announced in Beijing that the latter won the bid with a bid of 8 billion yuan and became the Chinese Super League TV public signal production and copyright partner for the next five years.

The price of 8 billion yuan, or 1.6 billion yuan per year, is four times the copyright fee of the Super League this season and 20 times that of last season. It is even higher than the total price of copyright in the Premier League, La Liga and NBA in mainland China.

The happiest thing is the Super League and the 16 clubs-according to the current dividend policy of 4%, each club will receive an average of 64 million yuan per year, and it will be as high as 80 million yuan in the next three years.

80 million yuan may not be anything to Evergrande, but for more Super League teams, this money even exceeds the team's current annual income. Team managers will have more money to improve their training and playing conditions, buy high-level players, and increase their competitiveness.

The "sky-high price" of 8 billion yuan has also attracted everyone's attention to this unfamiliar company called Tiao Power and the major shareholder behind it. Why are they willing to invest huge amounts of money in this league that was still in the midst of a crackdown on gangs a few years ago and its sponsors streaked? What makes them believe that the Super League will undergo earth-shaking changes in the next five years, allowing them to successfully realize commercial recycling? And, what is more critical-what is the bigger "game" behind this 8 billion investment?

What is the origin of this sports Olympic Power, which can write 8 billion yuan checks? 2004

is the most important year for the professional football league in China. After 10 years of League A, the professional football system in China has basically taken shape. In order to make the league more commercial and market-oriented, the Super League replaced the A A in 2004.

In the same year, a company called "Beijing Huaao Star Sports Communication" was established. It was one of the first companies to smell the commercialization potential of domestic football leagues. It was also the predecessor of Sports Olympic Power.

"At that time, the concepts of copyright and public signal production were just emerging, and TV stations began to have to pay copyright fees." Zhao Jun, general manager of Sports Olympic Power, told reporters,"At that time, everyone was not quite used to it. For example, CCTV began to refuse cooperation, and the anchor station was placed on Dragon TV."

Zhao Jun divided the commercialization of the Super League in the past 10 years into three periods. Marketization began to be implemented from 2004 to 2006 and followed market rules; the model was basically implemented from 2007 to 11, but it was the most difficult five years due to the poor environment; from 12 to 15, the level of broadcast signal production and league competitions was greatly improved, and the environment improved and large capital entered, which was the fastest development four years.

"We have been in the Super League for more than ten years and have a deeper understanding than the average person." When talking about the unbelievable bid of 8 billion yuan in the eyes of others, Zhao Jun would always use this expression to explain it. Sports Olympic Power began to make public signals in 2004, became a partner of the Super League in 2007, and renewed for five years now. The Super League has become the most important brand under its hands and will never give up.

It's easy to understand what Sports Dynamics is doing: winning the rights to broadcast the Super League for a certain price and selling it to TV stations and video sites. When the distribution price is higher than the former, it is the profit of the company.

At the worst time, for example, CCTV refused to broadcast Super League games in 2009 and 2010, for example, there were two league games without sponsors in 2005 and 2011 (Wanda took over the sponsorship midway in 2011), and the copyright price has been maintained at a few million "cabbage price". Regardless of scale or revenue, Sports Olympic Power is a veritable "small" company.

When big capitals have intervened in the Super League one after another-the most typical example is Jack Ma's 50% stake in Evergrande for 1.2 billion yuan. As the team's performance continues to rise, the game becomes more and more beautiful. National policies provide incentives, or in Zhao Jun's words, when "there are signs of a virtuous cycle", Sports Olympic Power needs stronger backing if it wants to hold on to this asset.

It is against this background that the Chinese Cultural Fund became the majority shareholder of Sports Olympic Power this year. In less than a year, Sports Olympic Power first won the media copyright of the China team's events, and then locked in the cooperation of the Chinese Super League in the next five years. In addition to its previous cooperation with the China Football Association in the FA Cup and Super Cup, and its cooperation with the AFC Football Association in the AFC Champions League and World Premiums, it already holds the copyright of almost all major football events in China and Asia-it is no longer a small company.

Whether the Super League is worth so much money has been debated for more than a month.

Judging from the current situation of the Super League, the annual "value" of 1.6 billion yuan is indeed a bit high.

Last year, the total revenue of China Super League was only 440 million yuan, and the total revenue of 16 clubs was only 2.015 billion yuan, 11 of which were still losing money.

Another view is that compared with top foreign football leagues, this value is actually not high. For example, take the most profitable Premier League as an example. According to the Football Financial Report released by Deloitte in March this year, the total revenue of the Premier League is 3.26 billion pounds, and the corresponding local broadcast rights of the Premier League in the next three years will eventually be sold for 5.136 billion pounds. -equivalent to 1.58 times the total revenue. If calculated in this way, the annual broadcast rights price of the Super League should exceed 3 billion yuan.

The biggest problem with this comparison method is that the Premier League has more than 7 million paying users. This is a prerequisite for TV stations to be willing to purchase Premier League copyright at high prices. As far as the current Chinese Super League is concerned, payment is still difficult to implement. If the copyright asking price is too high, it is difficult for the broadcast platform to recycle it commercially.

Zhao Jun is more inclined to agree with the latter view. "Foreign Premier League is very clear that it means paying (users), but from our perspective, it is impossible for the Super League to pay within two or three years," Zhao Jun said."We rarely use the value of foreign leagues to compare (with the Super League)."

She believes that with the current policy and market environment, it is normal for the Super League, as the number one brand in domestic sports events, to reach a volume of 5 - 6 billion yuan in five years. The bid price of 8 billion yuan is "relatively strong" compared to it, but it will not lose money in the long run.

The competition for sports event resources on Internet platforms is an important reason why Zhao Jun is optimistic about this market. "Judging from the current copyright price of 1.6 billion yuan, TV stations can recover 5%, and most of them still depend on the Internet." Zhao Jun told reporters.

At the beginning of this year, Tencent obtained NBA new media copyright in China at a price of 600 million yuan per year, and LeTV obtained Hong Kong's Premier League broadcast rights for the next three years at a price of about 800 million yuan per year. After these big orders were implemented one after another, the Super League's annual copyright fee of 1.6 billion yuan does not seem to be so recoverable.

"After all, this has been a five-year event. Look, so many things have happened in the past year." Zhao Jun said. Of course, she does not want this annual amount of 1.6 billion yuan to be just an input-output figure. She hopes to use this money to stimulate the overall production level and event level of the Super League. This also affects whether copyright parties, clubs and Super League companies including her can Get long-term benefits from this investment.

"The original model should be for your competition level to improve, and then the commercial value to increase. Now we turn it around and use the money to stimulate, your venue, lawn, lighting, media services. Everything at the competition level must be mentioned." Zhao Jun said.

She gave an example, the "strong dialogue" in each round of competition. At present, important games, such as Beijing Guoan vs. Guangzhou Evergrande, and Shanghai Shanggang vs. Shandong Luneng, are arranged at the same time and time period."The audience will definitely be diverted"; a more scientific schedule arrangement is needed. Only by staggering key games, increasing investment in the promotion and production of each game from the beginning of the game like foreign leagues do, and "making every week like a festival" can fans form more fixed viewing habits and maximize business value.

"Now that we are all in the same boat, there is no excuse to take this step together. You said you couldn't manage the club, and I also said I couldn't manage the TV station." Zhao Jun said.

"You need to give some incentives to this industry to reach a positive cycle of benefits in this industry. Our investment in the Super League is more focused on its improvement of the entire football industry, and we hope to obtain returns in a systematic way." Li Ruigang of the Chinese Cultural Industry Fund said in a previous interview with the media.

Currently, Sports Olympic Power is formulating a new copyright sales strategy. Currently, there are 8 websites that broadcast the Super League games. How to achieve cooperation through the recognition of these platforms, methods and prices is what Zhao Jun currently needs to solve. In addition to improving the level of event broadcasting and arranging the schedule more reasonably, Sports Olympic Power is also planning to produce more program content to "make it worthwhile to buy your platform."

Behind the 8 billion yuan and three companies, what bigger situation does Chinese culture have in sports and content investment? Li

Ruigang said that the opportunity has arrived for large-scale investment in the sports industry. The word "opportunity" here contains at least two meanings.

From a policy perspective, the "Several Opinions of the State Council on Accelerating the Development of the Sports Industry and Promoting Sports Consumption"(commonly known as Document No. 46) issued in October last year is equivalent to giving a clear signal to investment in the sports industry to reach 5 trillion yuan by 2025. The scale must rely on the power of large capital.

From a commercial perspective, sports are gradually beginning to shift from professional sports to lifestyle consumption. Especially in first-tier cities, the trend of bicycle, running, football, and fitness has begun to rise. The rapid development of the mobile Internet and video industries has made watching Live sports has become more convenient than ever before; not to mention outdoor games and sports-style variety shows have occupied many screens.

It is against this background that Chinese culture controls the driving force of sports and Olympics. Different from a highly organized and industrialized industry like the Internet, the domestic sports industry is still in a very fragmented stage and the industrial chain is short. Therefore, investing in companies with the most core resources-such as the sports and Olympic motivation of the National Football Team and the Super League-has become the most suitable choice at the moment.

In addition to Sports Olympics, there are two sports-related companies among the announced investment projects of Chinese Culture: Advantage Media and Shengli Family. Advantage Media mainly operates the China College Student Campus Football League, and is also the operator of the CBA League, the National Beach Volleyball Tour, and the Toms Cup China; while Shengli Family is more like a sports agency, signing up sports celebrities including Olympic boxing champion Zou Shiming, Olympic figure skating champions Shen Xue and Zhao Hongbo for commercial development.

The investment of these two companies is more about lengthening the sports industry chain. The former is aimed at the development of college student leagues, while the latter's goal is to create sports business stars like Yao Ming and Li Na, or to help established athletes better develop commercial value, just as IMG is currently doing to help Li Na after retirement.

These seemingly unrelated investments may end up chemically reacting in some interesting ways. For example, the improvement of the level of the Super League will drive the popularity of college student football leagues-think about the NBA's impact on youth basketball in China, and the commercial value of a group of football stars that emerge in it can be developed through agency companies. The increase in player income due to this commercial development can in turn stimulate young players and increase fans 'consumption of the stars themselves, just as we are now willing to spend money and time for Messi and Ronaldo.

One of the advantages of Chinese culture is that he has invested in a large number of cultural consumption and content production companies, including Oriental DreamWorks, IMAX, Flagship Pictures (a joint venture with Warner Bros.), Canxing Productions, TVB, etc. These companies have more possibilities for resource interaction-for example, on the stage of the Voice of China Finals in the fourth season, the protagonist of the "Kung Fu Panda" series appeared. In order to increase exposure to Oriental DreamWorks '"Kung Fu Panda 3", which will be released in January next year. So if you see a sports star appearing on the Voice stage or starring in a movie, don't be too surprised.

These high-quality copyright content from sports, movies, variety shows, etc. may eventually be collected on a TV called "Micro Whale". This is the Internet TV brand released by Micro Whale Technology, a subsidiary of Chinese Culture, in August this year. Li Ruigang is the founder and chairman of this company. He hopes to use this TV to subvert the TV industry he has worked hard for 20 years and establish a new set of rules.

The simplest and direct summary of this set of rules is "content wins"-I can see thousands of Hollywood blockbusters from Warner Bros. and DreamWorks at any time, the exclusive content of "The Voice of China", watch the Super League War on weekends, or come to two episodes of TVB dramas. When these high-quality content is gathered on the same TV platform, it becomes the core competitiveness.

Just one week before the signing of the cooperation with Super League of 8 billion yuan, British Sky News broke the news that China investors were preparing to buy F1 for 5.5 billion pounds (about 53.7 billion yuan). Among the China consortiums participating in the acquisition, the Chinese Cultural Industry Investment Fund is preparing to invest about 9.5 billion yuan. Perhaps soon, it will become another popular live event on Micro Whale TV.

Editor: yvonne