Chairman Wang Jianlin makes a speech on developing Wanda’s sports business at the China Sports Industry Forum

Develop the Sports Industry
The Speech Delivered by President Wang Jianlin on the Second China Sports Industry Forum
 (December 4, 2016)

Dear distinguished guests and friends, I am very happy to attend the China Sports Industry Forum. I will take this opportunity to give you some ideas about what Wanda is planning to do to develop the sports industry. I will talk about it from three aspects:

1. The Development Trend of the Sports Industry

Competitive sports begin to develop earlier than other sports in the world. Thousands of years ago, competitive sports emerged in ancient Greece. We can see them in films, television programs or literary works. More than 3,000 years ago, there were many kinds of competitive sports in ancient Greece and Rome.

Gradually, competitive sports evolved into the sports industry. There are differences between sports and the sports industry. Sports commercialization originated from the football clubs in Europe, and now it has a history of more than 100 years. The US has even brought the sports industry to a climax by fully integrating sports and commerce and formed a real sports industry over the past 50 years.

The overall scale of the world’s sports industry, including related industries, has reached about $2 trillion, and nearly 100 million people around the globe are involved. Seen from the huge scale, the sports industry can be considered a large industry.

There are four development trends for the sports industry worldwide, including China.

1. The Integration of Sports and Commerce.

Sports have a history of thousands of years, but the integration of sports and commerce has just reached its peak in the past few decades. Seen from title sponsorship, clothing sponsorship, endorsements and so forth, it can be said that commerce has penetrated all aspects of sports, or we can even say that “commerce has kidnapped sports”, which means sports are done for commerce. Now, all major events are broadcast in consideration of the time zones of all parts of the world. Taking into consideration the Asian viewing time, the games of the European professional football leagues are played during the Chinese viewing time. This was unthinkable in the past because of the broadcast rights sold at high prices. Nowadays, people always think of sports from commercial points of view. It can be said that commerce has penetrated all competitive sports and their various aspects.

2. The Integration of Sports and the Media.

In the past, the media would cover a sports event by charging the event itself. The sponsor of a sports event had to pay for CCTV coverage. The same happened to the overseas media. But gradually, the media began to pay sports events in order to cover them, and the prices have been increasing. The media take sports events as their core resources and this trend is becoming more and more obvious. Take the 2018 FIFA World Cup Russia as an example. Wanda will work as one of its agents. We have divided the media coverage of the event into two categories in Asia. One is an all-media package for sale; the other is even subdivided into more categories, such as TV media, print media, mobile media and site media. If a media outlet has a limited budget, they can buy one of the broadcast rights. TV media outlets can only buy the TV broadcast right; mobile and print media outlets can do the same. Media reporters will not be allowed to enter an event site even after they have bought the right. They will need to pay more to enter the site, and there will be different prices for different spots within the site. After entering the site, they will also have to pay for the right to conduct interviews and the prices should also be differentiated. Those without the right to conduct interviews are only allowed to take some photos. If you want to conduct interviews, we are sorry to say that you have to pay extra.

The media and sports events have become increasingly connected, and the latter have become one of the core resources for various media outlets. Professional sports media have gradually been separated from the comprehensive media. For example, a TV station may have a channel dedicated to sports or become a sports TV station. The value of professional sports TV stations is very high abroad and their value may exceed that of the news stations. Therefore, the integration of sports and the media has become a development trend.

3. The Integration of Sports and Tourism.

Sports events have become an important force to stimulate tourism consumption. It can be said that the best way to boost tourism in the world is sports events. For example, what are the two most valuable activities in the world? They are the Olympic Games and the World Cup, especially the latter. The competition for these two sports events is fiercer than that for any other activity and the two sports events boost tourism more than any other activity. Large summits, business activities, food festivals or others cannot rival them. Therefore, the competition for these two sports events is very intense. As we can see, the competition involves various factors other than economic strength. Otherwise, you cannot understand why the US lost to Qatar in the final bid to host the 2022 World Cup. There were many factors behind it. Why does everybody compete fiercely in the bid for the right to host the next game? The reason is these sports events can bring immediate property benefits. The Olympic Games and the World Cup can never make you lose money. From the 1984 Los Angeles Olympic Games, the Olympic Games stopped losing money and became an important and profitable sports event. So did the World Cup. The host country can earn fame and fortune, and more importantly, the after-effects of these sports events are obvious. The World Cup and the Olympic games will generate a lot of after-effects. The host city will become well-known and many people will travel there. Therefore, the sports industry and the tourism industry are becoming increasingly integrated.

4. The Integration of Sports and Development.

Sports have become an important opportunity and carrier for the development of a country, especially a city, and have even become an excuse for low-cost development. It is relatively easy for a city to improve the public’s happiness index by taking advantage of sports events. For example, Brazil just used the Rio Olympic Games as an excuse to demolish many illegal buildings controlled by gangland and they even used military tanks. If it was not for the sports event, I am afraid that local people would have complained a lot. However, the government told them that they would host the Olympic Games and need to ensure the safety of the Games. The Athens Olympic Games was also a great opportunity for Greece. This can be further explained by the fact that the Beijing 2008 Summer Games had a major influence on Beijing’s urban construction. Therefore, sports, especially major sports events, have become an opportunity for regional development.

II. The Current State of the Chinese Sports Industry

1. A Huge gap. From the perspective of national development, the sports industry is in the high-end level. People’s first pursuit is for nourishment, and after nourishment is entertainment. After entertainment needs have been met, there is still vacation and travel to consider. Sports consumption is in a consumption level above these levels, and therefore called a part of the leisure class. It is also called “paying to be punished”. For example, you pay to suffer in triathlons, something you enjoy and never tire of. I truly admire enthusiastic triathlon participants, of whom