Veteran Hollywood producer and Seattle Sounders FC minority owner Joe Roth surprised many people at the CAA World Congress of Sports when he was asked what keeps him up at night.
His blunt answer: China.
The world’s most populous country has long been seen by Western sports properties as a fertile market to export their own product. But China’s rapid development has now grown to the point where the country’s sports leagues can lure top talent, both on and off the field, for their own endeavors.
“Since the president of China [Xi Jinping] has decided soccer is going to be a big deal and host a World Cup, the English Premier League has suffered, and I lost my second-best player [Obafemi Martins] because they’re paying double or triple the salaries,” Roth said. “The exportation of talent scares me.”
Chinese Super League teams spent more than $350 million in transfer fees during the recent January-February transfer window, more than four times any comparable outlay it has made.
“It has been absolutely incredible,” said Paul Danforth, CAA Sports head of global sales. “There are transfer fees that have happened just in the last four months that have never happened before.”
Beyond the raw outlay for personnel, Chinese sports properties are quickly learning the advanced nuances of American and European sports business and developing ways to apply those lessons at home.
“It’s a different mentality, a different culture. It’s a different sense of delivery,” said Todd Goldstein, AEG chief revenue officer. “I think we’re all just trying to teach them some of the business that we have of sponsorship and signage, and how to use social media that we have. The more they embrace it, the more they’re going to spend.”
China’s mushrooming interest in sports parallels its growing investments in numerous elements of entertainment and leisure.
“They have an appetite for a lot more than just physical sports,” Goldstein said. “It’s music. It’s fashion. The movie business. The No. 1 buyer of movie tickets will be China next year. They will surpass the United States. It’s nothing short of incredible.”
