Monday, July 25, 2005

China Daily explains football business motive

If you thought the Real Madrid and Manchester United exhibition matches in China last weekend and tomorrow were all about sport, think again. "It's business. Big business", reports the state-owned, China Daily. The main reason why the two star-studded football giants are sweating it out in mid-summer "is to turn their popularity into profits", the newspaper explained:

While appearance fees may not be crucial for the clubs, they are not peanuts either. Real is expected to pocket US$25.2 million from the two-week pre-season tour in the US and Asia and 6.5 million euros for its China stop. Though the match organizers did not reveal payment for the club, it is believed that just the training session held in Tianjin on Friday earned some US$48, 400 for Real. And its appearance fee for the friendly with Beijing Hyundai on Saturday was no less than US$2.42 million ...

The clubs' main aim to further raise their profile in China a bigger fan base would translate into extra revenues in the future.

"Using this platform, Manchester United will develop its market even further," said Vange Kourentis, the club's marketing manager, in an earlier press conference. "We will take any opportunity available to promote the club in China."

There are also millions riding on sponsorships from Chinese companies like Septwolves and multinationals such as Audi, Pepsi and MasterCard. Garment maker Septwolves spent 4 million yuan (US$493,000) on Real Madrid's China tour in 2003. And this time round, the sponsorship is said to be more than that.

"It is a useful marketing strategy," Mao Jinhua, director of Septwolves' marketing centre, tells China Business Weekly. "Sponsoring such a high-profile club focuses more attention on our brand and indirectly promotes sales," he says.

Global auto maker Audi, which sponsored the Galacticos' tour in 2003, was satisfied with the result."Through an integrated campaign, we successfully raised the profile of the Audi brand, encouraged customer loyalty and drove sales of Audi A4," says Gao Yujing, PR manager of Audi China. The company is sponsoring the Red Devils' tour this year.
More and more companies will choose sponsoring international matches or clubs as an effective promotion, says Yi Jiandong, a sports industry expert at the Beijing Physical Science Education University. Acording to him, China is a huge market but domestic sport events have limited impact. That's why the world's top teams are interested in China exhibition events.