The Worry of Football Consumption Reaching Saturation
40 million RMB for a season’s shirt sponsorship, and the sponsor is a well-known international brand, GuangZhou Evergrande still turned the offer down. This is a story that the other China Super League clubs hate to believe.
But Guangzhou Evergrande did refuse Samsung Electronics’s offer on March 2013, the story was recently been disclosed by Guangzhou media, even though 40 million RMB (about 3.8 million pound) would already be a record sponsorship deal for any professional sport clubs in China. But Mr. Xu Jiayin, the eccentric chairman of Evergrande has his own way of evaluating his club.
Mr. Xu, who orders his employees to call him ‘Chairman Xu’, and also wants media to pay their tribute to him in that Maoist way, considers all media coverage of Guangzhou Evergrande FC as advertisements or promotions for his company. In the 4 years since he purchased the club, Mr. Xu has pumped around 1 billion RMB into it, however, he felt that it is an extremely profitble deal as long as all media would add the word ‘Evergrande’ to Guangzhou FC. In his calculation, Guangzhou Evergrande FC would play 30 rounds of China Super League (CSL) matches per season, and each match would be a perfect advertisement in the golden viewing time on major TV channels for his brand.
In China’s real estate industry, companies normally spend at least 15% of their annual revenue on advertisements, and according to Evergrande’s revenue size, Mr.Xu needs to allocate 1 billion RMB on his annual advertisement budget. Nowadays, with his football club dominating the domestic league, and with strong performances in the Asia Champions League (ACL), Evergrande has already become one of the most well known brands in mainland China as well as the Asian-Pacific area.
However, the doubt always remains on Mr.Xu’s real motivation for investing into football. If it is only for the brand Evergrande to be promoted from regional level to national scale, the target has already been met. The other side of the coin is, would he still be bothered to continue this insane investment on annual basis?
Turning Samsung down, proved Evergrande’s self confidence, but the gesture also showed Mr.Xu’s despise of the pittance that other CSL football clubs made from sponsorship deals. Although he is defending Evergrande’s value, it also testified that the current management model of professional football clubs in China is not sustainable in the football sense.
Guangzhou Evergrande is the only team from the CSL that made to the quarterfinals of ACL, and they have a strong possibility of getting to the very top of Asian football this season. Football has become the convincing factor for Mr. Xu to enhance his influence in the political circle, recently it was said that he was being summoned to Zhongnanhai, the central headquarters of the party for remedy of football in China. However, the all conquering prowess of the club, has reached such a level in such a short period of time, that local fans in Guangzhou had found their domestic matches a bit boring: in the first 11 rounds of this CSL season, Evergrande won 10 matches and drew 1.
The signs are showing in a small dip of attendance in recent home matches, and talks from the star players of the team of belittling their domestic opponents.
Mr. Xu will stick to his way of running this club, reaching the top of Asia would be his second step of conquering. There are rumors of him in talks with the ownership of Liverpool FC, and he surely has the mettle to make it happen. But in football marketing and management perspective, Evergrande’s investment in football is still not aimed at success in football alone.
John Yan is Deputy Editor of Netease.com