source:
Guardian
They think it's all over
In today's global market every sport is competing to be the biggest brand. Now, football is set to lose its crown - and money - as basketball overtakes it as the world's favourite game. Julian Borger investigates what went wrong
In the world of sport,
China truly is the Middle Kingdom, the beating heart at the centre of things. A country of 1.3 billion people, catapulted into modernity by an unprecedented boom, has gone sports mad.
Beijing is flushed with Olympic triumph. The city's new sports arenas, the Bird's Nest and the Water Cube, are as dazzling as the Forbidden City. And the new middle class, growing in size by 50 million a year, has money in its pockets and is looking for new distractions.
Sports advertising dominates all other forms. At any spot where the public might pause for more than a few seconds, there are screens bombarding you with athletic action from around the globe. In the lobbies of office blocks, waiting for the lift, you can catch a glimpse of English club football - goalmouth dramas, shots of Arsène Wenger looking pensive and Newcastle fans celebrating. In the atrium of one of Beijing's gleaming shopping centres, a huge screen constantly replays an Adidas advertisement for basketball gear featuring American star players exchanging banter and shooting hoops.
No space is wasted. There are displays in the back of taxis, showing formula one motor racing. Commercials illuminate the mirror in the toilet at a sports bar. Even in the Beijing metro, flatscreen TVs display the muscular glamour of American football.
This is not the first time westerners have turned up in the Orient pushing their favourite games. Earlier sports globalisation was a by-product of imperialism. The bats, balls, rackets and clubs came along with the gunboats and opium. Britain's one-time imperial dominance goes a long way towards explaining the universal popularity of football, tennis and golf, and why cricket is played by such an unlikely mix of nations.
The fact that Americans prefer to play different games is rooted in a deliberate rejection of all vestiges of the colonial past.
We are now in the midst of a second round of sporting globalisation. It is a more voluntary affair, requiring willing sellers and willing buyers, so Britain's sporting exports are facing much stiffer competition. It's not enough for today's professional clubs, leagues and associations to collect subscriptions and ticket receipts - like any other corporation, they must grow, and that ultimately means spilling over their borders. The local team and its traditions have become a tradable commodity.
At a "global summit" of international sporting executives in London in October, the talk was of products and brands, just like any other corporate sales convention. The brand is the key. Once you have sold someone your brand, you can sell a lifetime's worth of products.
"Globalisation of sport is here, it's been here for a while and this is just the next manifestation of it," Richard Scudamore, chief executive of the Premier League, said in support of his plan to play regular fixtures, a 39th game for every league team, in the far corners of the world.
The Premier League is the embodiment of sporting globalisation. The majority of top players are foreign, as is the ownership of the top clubs, and it is watched in more than 200 countries around the world, bringing in more than two-thirds of its annual £900m revenue. And the bigger it has grown, the more it's looking to expand.
In the corridors of the London meeting, organised by the Economist Intelligence Unit, the most excited talk focused on the phenomenal growth of China and India, where millions more people each year have enough cash in their pockets to start spending it on new forms of leisure.
In India, there is growing interest in football and basketball among young urban men, with football gaining an apparent edge with the backing of a mobile phone billionaire, Sunil Bharti Mittal. Formula one racing is also growing fast with the formation of a home-grown team, Force India. But these newcomers have to compete with an already established sporting culture, built on cricket. In fact, the growth of the Indian Premier League, based on a "Twenty20" formula - limited to 20 overs - has been one of the sporting success stories of the age.
China represents an even bigger and underexploited market. Chinese consumers have been raised on table tennis and badminton, but as far as global team sports are concerned, they represent a virtually blank slate. "They are not like kids who got into the sweet shop - they're like kids who didn't even know there was a sweet shop in the first place," as one English football official put it at the London conference. "They are enthusiastic, almost joyful. They want to try everything." The world's sporting executives have been flying into China in ever increasing numbers, competing for a share of the enormous market.
Football should have natural advantages. It is the most flexible and undemanding of games, requiring only a ball, and can be played well by men and women of all shapes and sizes. Furthermore, the game was born in China. Cuju, or kick ball, took root during the Han dynasty (206 BC to 220 AD), perhaps to help the imperial cavalry play off the numbness of long rides. The stitched leather ball was filled with fur or feathers, and goals could be round holes cut into silk sheets. Two millennia later, under the Japanese occupation of Manchuria, kicking a ball around the streets was an expression of nationalist resistance to the martial exercise routines the colonialists forced on the locals. After the revolution, teams were organised by factory work units. More recently, young Chinese fans became deeply, if fleetingly, infatuated with David Beckham.
Yet in recent years the popularity of football has plummeted, taking down with it the sport's leading brand, the Premier League. It has been displaced by basketball and its flagship, America's National Basketball Association (NBA). An independent poll carried out this summer by a market research company, TNS Sport, found that nearly 12% of the urban Chinese population are now playing basketball, twice the number playing football.
The meteoric rise of basketball in China almost certainly means basketball has now surpassed football as the world's leading sport, in terms of the number of active players. The international football body, Fifa, estimates there are 270 million people around the world playing football. Its basketball equivalent boasts 450 million. That again may be an exaggeration, but even conservative estimates put the number at 300 million. The demographics suggest that dominance is likely to grow. One in three Chinese youths plays the sport.
Basketball is everywhere you look in China. In October, the NBA announced plans to design and develop 12 new arenas in partnership with the stadium builder Anschutz Entertainment Group. Most importantly of all, the Chinese government declared its intention two years ago to turn basketball into the national game by building a court in every single one of China's 800,000 villages - part of the "sunshine policy" of making its increasingly sedentary population take some exercise. This unprecedented building campaign is transforming the country. In remote and impoverished villages, new hoops and backboards can be seen held aloft by sky-blue steel poles. By way of comparison, in Beijing, a city of 17 million people, there are just 30 football pitches.
The success of basketball in China represents one of the most stunning marketing coups of our time. Fourteen NBA games are broadcast live every week on state television and 51 regional stations. In January this year, to cement the NBA's market dominance, it set up NBA China, with investment from a Disney-owned sports network and four Chinese banks and trade groups. The CEO of Microsoft in China, Tim Chen, was lured away to run the new $2.3bn company and its four Chinese offices.
In his new quarters high above Beijing's business district, Chen reels off polling figures showing that 350 million Chinese people either watch or play basketball. Ultimately, the aim is to establish an entire NBA-affiliated league in China.
The contrast with the Premier League's fortunes could not be starker. The league does not have an office or a single representative in Beijing. Across most of China, it can legally be seen live only on a local pay TV network, watched by a tiny audience measured in the thousands. A few of the top clubs are considering setting up stores for their kit, but the league as a whole has no commercial outlet.
Football may still be the world's favourite game - certainly in Europe, South America and Africa - but if it loses China, it will no longer be able to take its supremacy for granted, and that will have depressing implications for the future revenues of the league and its indebted clubs.
A lot of this is not of the Premier League's making. Some of it is due to chance. A Chinese superstar has emerged in the NBA, Yao Ming, of the Houston Rockets, who attracts interest and audiences around the country. In their bid to find an equivalent, English clubs have gone as far as sponsoring reality shows on Chinese television. Chelsea sponsored a show called Super Soccer Star in southern China earlier this year, while Everton, Bolton and Nottingham Forest grouped together to back a programme called Soccer Prince, offering apprenticeships to the most promising teenager to emerge from the talent contest. So far, no footballing Yao Mings have materialised.
That may be because football is dying at the grassroots in China, killed off by excessive state control, the serial failure of the national team and the constraints imposed by the country's one-child family planning policy.
One of the few places you can play football in Beijing is Chaoyang Park. Every weekend, amid the ranks of outdoor table tennis tables and the early morning groups of pensioners practising t'ai chi, Chinese children can be seen playing on a fenced five-a-side pitch. They chase after the ball in thick clusters. "They won't spread out. They all want to keep the ball," complained their coach, Adam Ferry, a 26-year-old from Doncaster, who works for the private company China ClubFootball. It's known as the "little emperor" syndrome, one of the side-effects of the single-child policy. Each little boy is accustomed to being the centre of attention. The policy, in force since 1979, often means that children are deemed too precious, in contemporary China's ultra-competitive urban society, to be allowed out to play.
"There are few outdoor activities at school," said Tang Xiaogang, the manager at a vocational school who had brought his five-year-old son to the football training session. "With the one-child policy, schools and kindergartens are too frightened that kids will be hurt. The demands on the kids to excel are too high, but I don't want my son to miss out. So when my son goes to school, he will have to study hard. There won't be much time to play, so I want him to do it now."
In schools, basketball is seen as the safer alternative, and takes less space. Chinese schoolchildren have an average of one square metre of playground each. On top of that, the NBA's blanket presence is all around them. A statue of Shaquille O'Neal, a star for the LA Lakers now playing in Phoenix, overlooks Chaoyang Park and is 12 metres high, the sort of size formerly reserved for chairman Mao.
And children are fickle. Another of the boys being coached at ClubFootball, Zhang Tianyang, is six and a half and has been a soccer fan since 2006. Last year his parents invested in a Premier League DVD, only to see him switch allegiance. "After the Olympics he took to basketball," his mother, Liu Hong, said. "There are more advertisements and magazines about the NBA. And you can go into an NBA shop."
Little Tianyang has been promised a basketball for Christmas, and a genuine LA Lakers jersey for his birthday next year. He has a picture of Kobe Bryant, a Lakers star, on his wall. When he grows a little taller, his doting parents will trade in football lessons for basketball coaching. "The NBA has a lot of positive news, not negative like football," his father, Zhang Bin, said. "The footballers here get red cards and go to bars, and the Chinese team is terrible."
The national football team is a universal subject of ridicule - it has qualified for only one World Cup finals in more than 40 years. It will not be going to South Africa in 2010, having been beaten by Qatar and Iraq in the early qualifying stages. The professional league is beset by match-fixing scandals and falling attendance. Last month, state television stopped broadcasts of league games after a particularly serious brawl. An official accused the players of "lacking even the minimum professional ethics". The Beijing amateur league also had to be wound up after on-pitch fighting became a regular event.
China ClubFootball is run by a British expatriate, Rowan Simons, who has been in China for more than 20 years. This year he published a book about his efforts, Bamboo Goalposts. Its central argument is that football can never flourish under central planning. "The Chinese Football Association is owned by the government. It doesn't even have a department for amateur football. So how can the game grow the grass roots? The factory work unit model has disappeared, but nothing has replaced it," Simons said.
It is hard to find anyone with a good word to say about the CFA. John Yan, vice-president of Titan Sports, China's biggest sports media empire, said, "The game is not owned by the people. It is not owned by supporters. It is not owned by clubs. It is the state. And the government does not need football. It had the Olympics and 51 gold medals to show the correctness of the system. Economically, it's much easier to win 10 gold medals than to build a good football team."
The Beijing Olympics were yet another humiliation for the national football team. It failed to progress past the group stages. Chinese fans took to holding up placards inviting the CFA chief, Xie Yalong, to resign and burn in hell. "It shows Chinese football is a great example of openness," Yan argued, pointing to the bright side. "The head of the CFA is a senior guy. In any other realm of society, you would not be allowed to criticise him. In football, anyone can call him a bastard."
The corridors of the CFA are eerily quiet. Xie Yalong has just been sent on a re-education course, a common party method of separating a cadre from his post. His deputy, Lily Xue, emerges after some delay from a crisis meeting that overran. She has the reputation of a reformer and is disarmingly frank. "Ten years ago, football was far bigger than basketball - there was no comparison. But the fans are fed up with the Chinese team, and basketball is going up day by day. It has a beautiful future," she said. She rejects the idea that state control is to blame. On the contrary, she believes it was the decision to launch China's professional league before the market was ready that stunted the game.
The NBA has been patiently building its market for more than two decades. In 1987, the NBA commissioner, David Stern, turned up in China with a bag full of match videos to show the bosses at state television and was given a warm welcome. Stern offered a revenue-share deal. Chinese television would broadcast the games, and would split the proceeds from advertising with the NBA. In those early years, there was very little advertising, but the NBA sent a token cheque anyway, "in fairness to the relationship", as Stern put it. In effect, he was paying Chinese television to air the games.
In the same spirit, the NBA invited the Chinese national basketball team to New York. "At that time, they were not very good," Stern said. "We hired an assistant NBA coach to be with them and they scrimmaged against half a dozen of our teams. In other words, we treated them with dignity, respect and basketball camaraderie." Ever since then, the NBA has been careful to be seen giving more than it receives. It contributed to the rebuilding of schools hit by this year's earthquake in Sichuan, and builds free courts for needy institutions.
The court at Mingyuan School was finished last year, but its surface is already wearing out from overuse. Mingyuan, in Daxing district at the southern edge of Beijing, caters to the children of migrant workers, barred from local state schools because their parents lack the necessary residence permits. There are 930 pupils and they assemble every day in front of the Chinese flag, the Olympic logo and the English slogan: "One World One Dream." The basketball court is the centre of activity (football is discouraged because of the risk of breaking windows) and the dream nurtured by the boys playing is clear enough.
Xu Aofei, a 13-year-old whose parents brought him from Henan province in search of work, is not built for basketball. His friends tower over him, but he says the game is his passion. His short-term goal is to own an authentic NBA jersey bearing the name of his hero, Kobe Bryant. "In the beginning, my parents said no, but then my dad said OK, if that's what you want," he said. "We went to a sports store the other day and I spent 300 yuan [about £30] on an NBA tracksuit, but it was a fake. My mother was furious. She said next time, leave it to me."
The aspiration to own the real thing appeared to be commonplace at Mingyuan, which is, of course, good news for the big sportswear merchants. Nike and Adidas have both built huge temples to expensive merchandise in the city centre. The Adidas shop is the company's biggest anywhere in the world. It is crammed with hi-tech equipment that can tell you what kind of athletic shoe you need and which world famous athletes use it. You can redesign it with your favourite colours and accessories with the help of a touch screen.
The Yashow Clothing Market next door, however, is constantly full and bustling. It sells knock-off kit from every top-level sports team on the planet, for a tenth of the price. The state seems to be disinclined to do anything about such flagrant piracy, possibly because of the rumoured involvement of the People's Liberation Army. But the NBA remains optimistic. "People want the authentic stuff," Tim Chen said. "There are 100 million middle-class families out there and they all have one child." He expects NBA sales to go up 40% this year. There are two NBA stores already and 1,000 more are planned across China. Nike, another major outlet for basketball kit, seem equally unconcerned about knock-offs. They say they reached $1bn in revenue last year, a year ahead of projection, and are planning 6,000 stores in total.
Once more, the comparisons with football are striking. The Premier League has no merchandise shops. And while the NBA has the advantage of negotiating on behalf of all its teams, the Premier League changes from year to year, and can never speak confidently for all its fractious members. The big four clubs - Manchester United, Arsenal, Liverpool and Chelsea - prefer to cut their own deals and are all fitfully attempting to expand their revenue base in China, but none has succeeded in building an enduring commercial presence.
Zhang Lu, vice-president of the capital's main team, Beijing Guoan, has helped organise exhibition matches for Premiership teams over the years, but says it is no longer worth it. "Their appearance fee is extremely high - €1m. They demand the most expensive accommodation and food, but in China the ticket price is very low. It's hard to make money on these deals. So we're not keen any more."
Jianxiang Huang, a former football commentator now working as an executive for a consortium of Chinese regional sports channels, said: "The English football teams have no patience. They want to make quick money. What have they done? They gave nothing. They only took away. The NBA invested a lot, and as a whole they have won the market. They have put a lot of work into educating fans to see basketball not just as a game, but as a lifestyle. Football fans are now considered too old-fashioned, conservative and not much fun."
The money-up-front principle has undoubtedly damaged the Premier League's market position as far as broadcasting is concerned. Last year, it sold its mainland China broadcasting rights to the highest bidder, a pay-per-view company called WinTV. The asking price was not made public, but in China it is widely believed the rights cost $50m. So far things have not gone well. Even the minority of Chinese fans who have access to WinTV have been reluctant to pay for something they used to get for free, and most have switched to watching Italian, German or Spanish football on state television. The audience for English football fell from 30 million to about 20,000 overnight. For most observers, the WinTV deal was just another case of the Premiership shooting itself in the foot with its own greed.
The Premier League's head of international broadcasting and media operations, Phil Lines, acknowledges the loss of audience, but insists the league had very little choice. "Up until now, our philosophy has been to create the best league in the world by attracting the best players and coaches. For that you need the best money. You might say that is a short-term view, but it's much easier to take a long-term view if you don't have something called relegation. For most clubs, the long-term view means not finishing below 17th position this season. Football, by necessity, is a short-term business. What you need is jam today."
When the television rights are up for sale next year, Lines said, the bidding criteria for China will probably be changed to ensure at least one game a week is aired for free. The league is also exploring ways of cooperating with the British Council to combine football training and English lessons in Africa, India and, eventually, China. The Premier League boss, Richard Scudamore, is meanwhile trying to convince his clubs to accept his proposal to play a 39th game each season abroad, in Asia, the US or Australia. The clubs revolted when the proposal leaked in February, but Scudamore argues that the league cannot afford to drop the idea. "You can't just turn up for exhibition matches," he said. "You've got to make it meaningful. It's about the future. It's about sustaining growth."
There's the home flank to worry about, too. The NBA, American football's NFL and ice hockey's NHL have taken to staging games in Europe. The NBA sold out stadiums in London, Paris, Barcelona and Berlin for pre-season games in October. More than 80,000 people filled Wembley later the same month to watch an NFL regular season fixture. Both the NFL and NBA are considering setting up teams in London and elsewhere in Europe that would compete in their existing US-based leagues.
After a few false starts, football has established a permanent niche in the US with Major League Soccer. But despite the arrival of David Beckham, the sport remains a minority enthusiasm, and has not posed a serious threat to NFL football, by far the country's biggest and richest sport, or basketball, which some polls show surpassing baseball for second place.
The great prize is becoming a global league. Whether or not it is good for sport, the ballooning cost of remaining competitive and winning trophies leaves owners and executives little choice but to seek maximum revenue and perpetual growth. For the Premier League, failure in China is a serious setback, but league executives insist all is not lost. Yao Ming will retire one day, they argue, and a Chinese footballer of comparable stature could still appear. But football is withering in the villages in China. No one has tried harder than Rowan Simons to foster the game, but even he concedes the battle may be as good as over: "Once the kids start playing basketball, they are never coming back."
