CBA League Commercial Performance Review White Paper
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CBA League Commercial Performance Review White Paper Deloitte Technology, Media & Telecommunications Industry 2019/09 © 2019. For information, contact Deloitte China. CBA League Commercial Performance Review White Paper Foreword Foreword Table of Contents Executive Summary Sports and Basketball Industry The CBA League is on the eve of its 25th season as the highest level of men's professional basketball in China. Looking back, the League has made a critical contribution to the game, CBA Data at a Glance but more broadly to the development of sports in China. We are confident our efforts to CBA Commercial leverage technology, upgrade the professional game and create a more complete game is Performance winning with fans. You can count on the League continuing to act as an engine of innovation. We trust that the League will deliver on its potential and are confident long-term, stable growth will translate into increased commercial success. Over the next five years, CBA 2.0 will see the League make basketball more exciting and relevant by providing a more intimate fan experience, shaping a brand image that resonates more strongly with younger audiences, establishing a complete commercial ecosystem, and implementing more reasonable club access. Together with the 20 clubs that make up the CBA family, we will work with coaches, athletes, referees and staff from across the game. We will be bold in innovation and steadfast in execution as we continue to upgrade the professionalism of the game at every level, from league management to player. We hope to collaborate with partners from all aspects through this whole journey to create a top-notch league that is truly our own, and make the CBA the most influential sport league in China! Yao Ming © 2019. For information, contact Deloitte China. CBA League Commercial Performance Review White Paper 3 Table of Contents Foreword Table of Contents Executive Summary Sports and Basketball Industry Foreword 3 CBA Commercial Performance 31 CBA Data at a Glance The Role of CBA League (Beijing) Sports Co. Table of Contents 4 32 Ltd. CBA Commercial Executive Summary 5 Performance Broadcasters 33 Sports and Basketball Industry 6 Sponsors 35 Positive Growth 7 Clubs 38 Capital Investment 8 Players 41 Commercial Potential 10 Fans and Public 44 League Reforms 12 FIBA World Cup 14 CBA Data at a Glance 18 CBA: 24-seasons of evolution 19 Exciting League 21 Competitive Intensity 24 Talent 26 Increased Popular Appeal 29 © 2019. For information, contact Deloitte China. CBA League Commercial Performance Review White Paper 4 Executive Summary Foreword Table of Contents Executive Summary Sports and Basketball Industry CBA Data at a Glance 1 2 3 CBA Commercial Performance Sports and Basketball CBA Data at a Glance CBA Commercial Industry Performance Driven by the government’s financial The CBA League has been evolving The CBA generates not only support, policy introduction, and across 24 seasons. commercial revenue but value investment, China’s sports industry has shared with the five major Reforms to improve the competition grown rapidly. stakeholders responsible for the have entered a new, CBA 2.0 era that league’s success. League quality and commercial is intended to secure the long term performance have been increased, while success of the league through Broadcasters, sponsors, clubs, reforms to boost the professionalism and stronger youth development and players, and fans. fairness of the league have met with standardized contracts. These stakeholders share a common remarkable success. The results of these reforms are interest in the development of a Basketball has become a popular sport already evident in a league that is sustainable and healthy CBA league. with a huge fan base. more balanced, unpredictable and exciting to fans. Healthy growth has attracted interest from investors with the CBA league seen as one Engaging fans through traditional, of the top sporting properties in China. digital and social media is further increasing the influence and A revitalized youth system and the commercial performance of the opportunity to host the 2019 FIBA World league. Cup are expected to further stimulate basketball and wider interest in sports.. © 2019. For information, contact Deloitte China. CBA League Commercial Performance Review White Paper 5 Sports and Basketball Industry Foreword Table of Contents Executive Summary Sports and Basketball Industry Set for continued, robust growth CBA Data at a Glance Boosted by increasing government spending, China’s sports industries are expected to be worth 5 trillion RMB by 2025. CBA Commercial Performance Booming commercial appeal League and sporting event sponsorship has become a crucial vehicle for corporates to boost brand awareness. Basketball the standout performer With a huge fans base, star players, and a strong, professional league, basketball is set to remain one of the most commercially value sporting IPs. Increased professionalism through enhanced governance Under the leadership of the State General Administration of Sports, and President Yao Ming the CBA is delivering on reforms to boost talent development, infrastructure and commercial performance FIBA Basketball World Cup China has upgraded its basketball infrastructure as part of preparations to host the 2019 FIBA Basketball World Cup. With 32 national teams competing across 8 cities the event is set to further boost the sport’s profile. © 2019. For information, contact Deloitte China. CBA League Commercial Performance Review White Paper 6 Positive Growth Foreword Continued Government spending on culture, sports & media and entertainment is support Table of Contents Executive Summary Consumer spending on sports has been increasing by 60% in 5 years, backed by increased government efforts to grow sports and provide more facilities for Sports and Basketball people to exercise China’s sports industry is expected to worth Industry 5 trillion RMB by the end of 2025 (Unit: Billion RMB) (Unit: RMB) Positive Growth • In 2018, the state’s expenditure on national 400 2,500 culture, sports & media and entertainment Capital Investment 2,226 2,086 exceeded 350 billion RMB. The government’s Commercial Potential 1,915 financial support is providing a foundation for the 350 1,723 2,000 vigorous development of the sports industry League Reforms 1,536 1,398 • The number of sports industry GDP presentation FIBA World Cup 300 339 352 1,500 gap between China (1.0%) and developed countries 269 308 316 such as US (3.0%) and Japan (2.5%) is decreasing. CBA Data at a Glance 254 The guidance issued by the State Council and the 250 1,000 State General Administration of Sport indicates that CBA Commercial 2013 2014 2015 2016 2017 2018E the sport industry’s total value is expected to reach Performance State’s Fiscal Expenditure on Culture, Sports & Media (Left) 3 trillion RMB by 2020 and 5 trillion RMB by 2025. The increasing Chinese consumption on Chinese Consumption on Culture, Education & Entertainment Per Person (Right) culture, education, entertainment and sports becomes a main driver of the development Total Industry Value of Chinese Sports Industry (2013-2025F) (Unit: Trillion RMB) 6.0 5.0 5.0 4.0 3.0 3.0 2.2 2.4 1.7 1.9 2.0 1.1 1.4 1.0 0.0 2013 2014 2015 2016 2017 2018E 2020F 2025F Sources: National Bureau of Statistics, General Administration of Sport; Deloitte interview, research and analysis © 2019. For information, contact Deloitte China. CBA League Commercial Performance Review White Paper 7 Capital Investment After reaching record levels of investment in 2015-16, the industry has become more Foreword rational and focused on developing prime properties and securing value Table of Contents Executive Summary Overview of Domestic Sports Industry Average Value of Sports Investment Investment (2015-2018) (2015-2018) Sporting assets are still popular Sports and Basketball (Unit: Number of investments) Unit: Million RMB/project with Chinese investors Industry Positive Growth • Investments peaked in 2016, when a 300 140.0 123.0 278 surge in projects saw an annual growth Capital Investment 248 rate of 84% Commercial Potential 120.0 • From 2017 onwards capital investment League Reforms 214 has become more focused on quality 100.0 FIBA World Cup 200 75.0 • In 2018, investment remained rational, 67.0 however the business environment for CBA Data at a Glance 80.0 sports remains highly positive and the 132 industry is expecting to see investments CBA Commercial 60.0 climb again with a continued focus on 37.0 Performance 100 prime assets 40.0 20.0 0 0.0 2015 2016 2017 2018 2015 2016 2017 2018 The number of domestic sport Strong focus on prime IP investments reduced year by year since 2016, with aggregated annual growth Compared to 2017, the average value of rate of -31% single investments has increased by 85% In 2018, the average value of single project reached 123 million RMB Sources: IT JUZI; Deloitte interview, research and analysis © 2019. For information, contact Deloitte China. CBA League Commercial Performance Review White Paper 8 Capital Investment Foreword Sponsoring sporting events has become popular with companies looking to raise brand awareness Table of Contents Executive Summary The development of Chinese Top Leagues’ Sponsors Sports and Basketball Industry The quantity and quality of Positive Growth Sponsorship value CAGR in sponsors, and the value of the last 14 years Capital Investment sponsorship to China’s top division has grown strongly Commercial Potential Top Leagues in China >30% Sponsorship categories have League