THE BUSINESS OF SPORT
Fun, games and money
Sport has become a global business as well as a recreation for billions.
EVEN in China, a century is a long time to wait. In 1908, as the fourth modern Olympic Games took place in London, a magazine called Tianjin Youth posed three questions. When would a Chinese athlete take part in the
games? When would the country send a team? And when would it stage the games?
The answer to the first question turned out to be 1932, when Liu
Changchun, a sprinter, made his way to Los Angeles from his home in
north-eastern China, then under Japanese occupation. He won nothing,
but is remembered as a hero.
China sent teams to the Olympics in 1936, 1948 and 1952, but then
stayed away until the winter games of 1980. Four years after that, when
the summer games returned to Los Angeles, Xu Haifeng, a pistol-shooter,
won China's first gold medal.
Now China has a full set of answers. The greatest sporting show on Earth
is coming to Beijing, and the organizers are leaving nothing to chance.
They have crammed as many lucky number eights into the arrangements
as they sensibly could. The opening ceremony of the 2008 games will
begin at 8.08pm on August 8th.
When the Olympic flame is lit, China will be hoping for a 17-day festival of
sport and international friendship. It sees the games as marking not just
its re-emergence as a global economic force but also as a country that the
rest of the world treats with admiration and respect. Lately China has
come to view the flame as a bright light in a year of calamities, including
heavy snow that caused chaos in January and February and an earthquake
in Sichuan province in May that killed tens of thousands. It has, however,
had less comforting connections with unrest in Tibet.
Beijing is sure to get its festival of sport, with 10,700 competitors from
more than 200 countries playing 28 sports. In September it will also play
host to 4,000 athletes with disabilities, in the Paralympics. There are sure
to be moments that raise the hairs at the back of the neck. With a bit of
good fortune, one such moment could come on the first weekend of
competition, when in a spanking new 18,000-seat basketball arena in west
Beijing China's men are due to take on the mighty United States.
Fortune depends largely on Yao Ming's left foot. Mr Yao is a sporting icon
in China and also a star in America, where he plays for the Houston
Rockets; at 2.29 meters (7'6"), he is the tallest player in the National
Basketball Association (NBA), as well as one of the best. But he suffered a
stress fracture in February and started playing again only in mid-July.
China wants to be a great power in sport as well as in economics and international affairs. Ask Chinese officials whether they care about winning the most gold medals, and they will demur politely: winning, they say, isn't everything. But winning does matter, as it does to Americans, Russians or Germans. Few will be surprised if China tops the medal table this time.
Whether China gets its festival of friendship is another matter. Plenty in
the West think China should not have been given the games at all. Its critics
say it has done too little to elicit better behavior from its nasty friends in
places such as Myanmar and Sudan. They say, too, that China is cruel to
dissidents and minorities at home, not least in Tibet, where unrest erupted
just before the Olympic torch began its relay from Greece to Beijing. The
relay—invigilated by burly Chinese minders—was met by protests in
several cities, which angered the Chinese. The games in Beijing will not
suffer a sporting boycott like those of 1956, 1976, 1980 and 1984. But
some foreign leaders will stay away from the opening ceremony, and
neither China nor the International Olympic Committee (IOC) can do
anything to prevent criticism from abroad. Some athletes, too, may see
the games as an opportunity for making a political protest, even though
that is against Olympic rules. It has happened before.
Festival of commerce
However, the Olympics can also be seen as another sort of festival: of
global business. True believers in the Olympic spirit might balk at this.
There is no prize money on offer: athletes compete only for the glory of
gold, silver and bronze. Most of them are thrilled just to be there. The IOC
insists it is not a profit making body. And Olympic venues are free of the
advertisements that encircle other sporting arenas.
Yet commerce is more certain to be in the air than the Beijing smog.
Olympians ceased to be amateurs long ago. Win a medal, and financial
rewards will follow. Sporting federations will be keener to provide facilities,
and corporate sponsors want to back winners. For companies, the games
are a golden marketing opportunity. Sportswear manufacturers have no
better showcase. For almost anyone selling anything, the Beijing Olympics
are a chance to reach 1.3 billion people in an economy with double-digit
growth, not to mention billions more watching around the world.
The Olympics have 12 main sponsors, from Kodak, which backed the first
modern games in 1896, and Coca-Cola, part of the show since 1928, to
Lenovo, a Chinese computer company that signed up in 2005. For the four
years to 2008, they are paying out a total of $866m in money, goods and
services. In all, more than 60 companies, both Chinese and foreign, are
sponsoring the games. "No multinational company bent on expanding into
China or national company seeking to grow inside or outside China will
miss out on the branding opportunity presented by the Olympics in
Beijing," according to Sir Martin Sorrell, chief executive of WPP, a giant
advertising and marketing agency. Underpinning this festival of commerce
is the symbiotic relationship between sport and the media. That still chiefly
means television, but more and more people also follow sport on
computers, BlackBerrys and mobile phones. Sport has clearly become a
global business—but in fact it has been since long before "globalization"
was invented. International sport dates back to the 19th century, and the
commercial exploitation of sport is even older than that. What is new is the
degree of commercialization and its spread to emerging markets.
One sign is that capital is chasing sporting profit across borders. For
example, nine of the 20 football clubs in the English Premier League last
season were owned by foreigners. (The final count was eight: no amount
of American cash could have saved Derby County from relegation.) One or
two may be rich men's playthings, but most have been bought for the
media rights, ticket sales and merchandising.
Another sign is the international integration of sport's labour markets.
Brazilian footballers, for instance, turn up in leagues from the Faroe
Islands to Vietnam. Successful sportsmen and women are now earning
sums that the stars of a generation ago could not have dreamed of. Money
from broadcasters and sponsors inflates pay packets to eye-popping
dimensions, especially when an attractive image meets sporting brilliance.
Tiger Woods is as far ahead in earning power as he is on the golf course.
Sport's product markets, too, are becoming ever more global as Western
businesses target the newly affluent in developing countries. And those
developing economies, notably India in cricket, are creating powerful
sports businesses of their own. Ambitious countries in Asia and the Gulf
want their own tennis tournaments and Grand Prix.
The old marriage of media and sport has proved durable because it is so
mutually beneficial. What they both get out of it is eyeballs. The sports
business is based on the idea that people are willing to pay to watch
others play, and television expands the audience vastly, from thousands
inside the stadium to millions outside. For broadcasters, more eyeballs
mean more subscribers and advertisers. And sport is one of the few things
that still have people tuning in by the million.