China’s strategy for sport yields intriguing research opportunities

China’s strategy for sport yields intriguing research opportunities

Article Type: Editorial From: Sport, Business and Management: An International Journal, Volume 5, Issue 3.

If reports are to be believed, French Ligue 1 club FC Sochaux will shortly pass into the hands of new owners. Such ownership stories are now a twenty-first century staple, but the sale of FC Sochaux is more telling than most of these tales.

Founded 87 years ago, FC Sochaux enjoyed a 66-year unbroken stay in France’s top division, until their relegation last season. This enduring presence in French football’s top flight was underwritten by carmaker Peugeot, which founded FC Sochaux as a club for its workers.

Peugeot has now agreed the sale of the club to Tech Pro Technology Development, a Chinese corporation and Hong Kong-listed electrical components manufacturer, for a figure thought to be around €7m.

This story says a great deal both about how football and the world have changed over the last century. The days of football clubs with close links to their local communities through a factory team seem to be disappearing fast.

At the same time, the globalisation of football club ownership continues apace, although the FC Sochaux case is particularly symbolic given its new Chinese owners. The world’s fastest-growing economic power over the last two decades, China is now becoming more actively engaged in football.

In recent months, Wang Jianlin, chairman of the Dalian Wanda property group, has purchased a 20 per cent stake in Spain’s Atletico Madrid for US$52m; Alibaba owner Jack Ma has acquired 50 per cent of the Asian Champions League’s first Chinese winners, Guangzhou Evergrande, for US$192m; and the China National Chemical Corporation has acquired Pirelli (part-owners of Inter Milan) in a US$7.7b deal.

This phenomenon is part of a global industrial conglomeration. These forays into the heart of European football – there is now talk of a Chinese suitor for Aston Villa, while the Netherlands’ Den Haag has recently been sold to the Chinese – reflect China’s acquisitive mood: its companies are thought to have acquired US$18b of European corporate assets in 2014.

Wang says he wants to position Atletico as a hub in an entertainment axis that stretches from Beijing to Hollywood. Ma seems to view football both as good for society’s health and happiness and as an asset in his diversified portfolio of commercial investments.

Both men are astute business people, and probably consummate politicians too. It can be no coincidence that Wang and Ma are investing in football at a time when the Chinese Government itself is spending heavily on the sport.

Somewhat embarrassed by the country’s continuing failure on the world stage, China is creating 20,000 new school football pitches and training facilities by 2017, with the aim of developing 100,000 new players. The ultimate goal is for China to bid for, host, and win the World Cup.

Wang and Ma will be party to such developments, seeking to take advantage of the commercial opportunities they will bring. At the same time, both will know the “Chinese way” (referred to by some people as guanxi – a little like “I’ll scratch your back if you scratch mine”); that is, by actively cooperating with the government’s plans, they will be well placed to work with their state authorities.

Wang would appear to be particularly aware of the corrupt backdrop of Chinese football, a phenomenon that closely mirrors Chinese business as a whole. Investing in Spain protects his personal fortune while continuing to service the Chinese state’s sporting ambitions. Should Wang fall foul of a state purge on business, part of his fortune is protected in Madrid.

Over the last few decades, the Chinese Government has been using football as an instrument of soft power. Ahead of the 2010 African Cup of Nations in Angola, 700 Chinese workers helped construct the four tournament venues, which in turn were part of a $600m aid package funded by China.

Such investments are motivated by a host of factors: they build political influence in countries where there are growing Chinese populations; generate a positive predisposition towards China in other nations; and ease access to the raw materials that help drive the Chinese industrial machine.

So, for example, the African Cup of Nations investment in 2010 has to be seen in the context that Angola is Africa’s second-biggest oil exporter and China is the biggest buyer of Angolan oil.

Many football fans across Europe will, at some stage in the future, be thrilled by the prospect of a billionaire Chinese entrepreneur buying their club. Similarly, the promise of a new club stadium funded by Chinese money could seduce even the most cynical.

Yet, as Birmingham City fans can testify, the arrival of Hong Kong businessman Carson Yeung as the club’s new owner did not usher in the new dawn his apparent wealth promised. Similarly, the China Railway Construction Corporation’s pledge to build Inter Milan a new stadium similarly proved to be the basis for unfounded optimism among fans.

Chinese business investors may have plenty of money but they often do not have the knowledge or experience of football, an industry that is notoriously difficult for corporate owners to understand and excel in.

In the light of Angola, guanxi and Wang too, the clubs and fans in Europe hoping for a cash windfall should remember that China does not have a something for nothing culture and that the country’s business leaders’ ideas of what is good for a club may be formed without undue concerns for the local community.

In which case, FC Sochaux of France could serve as a portent of things to come and a symbol of how far European football is moving away from its socio-cultural roots, and towards a new set of Chinese paymasters.

For researchers in the fields of sport, business, and management, there are consequently a number of opportunities to engage in research. At one level, the political and commercial contexts underpinning football club acquisitions warrant investigation, as do the motives and goals. Furthermore, the returns on such investments would make for a compelling study, especially as intangible returns linked to soft power may have equal value to more tangible returns.

Viewing such club acquisitions as either an investment strategy or a form of market entry are linked to this, and could be analysed using existing sport, business, and management literature. In the same way, studies of human capital development and competence building on the part of China, its governments and its corporations would yield insights into an acquisitive trend that may potentially have profound impacts in years to come.

Alongside such issues, analyses of organisational culture, acquisition strategies, market entry issues, and business practices such as guanxi, the recent spate of Chinese football club purchases highlights some intriguing research possibilities. Indeed, if the Chinese Government’s aim of creating an $800b sport industry by 2025 is to be realised, then it is highly likely that there will be other, further opportunities for research in this area both in football and beyond into other sports and events.

Notes on papers in this edition

In the first paper, Meng et al. examine how fans are engaged fans through social media and its implications for team identification. The ubiquity of social media provides sport organisations with opportunities to communicate with fans and as a result, potentially strengthen team identification. The study contributes to emerging research on the nature of social media use by sport organisations by examining the platforms adopted over a three-year period by National Basketball Association (NBA) teams and the way in which social media is used to communicate and engage with fans. A content analysis was used to examine online comments posted by all 30 teams in the NBA on Facebook and Twitter during the off-season, results demonstrating that NBA teams have embraced social media, primarily using four different types of communication to engage fans: informing, marketing, personalising and activating. The authors establish that social media is an effective vehicle for sport organisations to engage with fans and to enhance team identification. Our data suggest that teams should make a concerted effort in their communications, where possible, to personalise communications, genuinely inform and involve fans and provide relevant marketing communications, all of which can be effectively implemented within existing marketing efforts.

Bason and Anagnostopoulos undertake a longitudinal study of FTSE-100 companies, examining how they utilise sport as part of their corporate social responsibility (CSR) strategies. Under growing public scrutiny of their behaviour, the vast majority of multinational enterprises have been undertaking significant investments through CSR in order to close legitimacy gaps. The purpose of this paper is to provide a descriptive account of the nature and scope of MNEs’ CSR programmes that have sport at their core. More specifically, the present study addresses the following questions: How do FTSE-100 firms utilise sport as part of their CSR agendas?; how do different industries have different approaches to CSR through sport?; and can the types of CSR through sport be classified? Centred on legitimacy theory and exploratory in nature, the study employed a content analysis method, and examined three types of document from each of the FTSE-100 firms, namely, annual reports, annual reviews and CSR reports over the ten-year period from 2003 to 2012. In total, 1,473 documents were content analysed, thereby offering a sound representation of CSR disclosure of the FTSE-100. From the analysis three main streams emerged: “Philanthropy”, “Sponsorships”, and “Personnel Engagement” with the first showing the smallest growth compared with the other main streams. Findings show the general rise in CSR through sport, thereby demonstrating that the corporate world has practically acknowledged that the sporting context is a powerful vehicle for the employment of CSR. Previous empirical studies have sought to investigate CSR through sport, yet they have generally suffered from sampling limitations which have, in turn, rendered the drawing of reliable conclusions problematic. Particularly, the lack of an explicit focus on longitudinality is a typical limitation, meaning that no conclusions can be made regarding the trend. The study outlined in this paper offers the most comprehensive longitudinal study of CSR through sport to date, and thus contributes to the increasing volume of literature that examines the application of CSR in relation to the sport sector.

The third paper by Webb and Thelwell considers the cultural similarities and differences between elite referees concerning their preparation and performance in dealing with reduced player behaviour. Semi-structured interviews were employed to collect the data. The 37 participants from England, Spain, and Italy were selected through the use of purposive sampling, and all were working in the field of refereeing as current elite level referees, ex-elite level referees, referee assessors, referee coaches or managers and administrators from bodies that manage and train referees. Inductive content analysis was employed to generate themes from the raw data. Referees have identified particular issues related specifically to player behaviour and also identified specific traits pertaining to players from certain countries. Furthermore, results demonstrate that referees have begun to alter their preparation and performance due to the pressure they perceive exists within the Association Football and, more specifically, from the players themselves. This study is the first to compare cross-cultural elite referee responses regarding their preparation and performance related to player behaviour.

Fourthly, Bae et al. investigate East Asian college Consumer decision-making styles for sport products. Purchasing behaviours have been studied in various countries. Previous studies involving consumer decision-making styles for sport products have only been seen in one country in order to either identify factors of Purchase Style Inventory for Sport Products (PSISP) or classify consumer shopping behaviours. Therefore, the purpose of this study was to identify consumers’ decision-making styles (shopping styles) for sport products from Japanese, Singaporean, and Taiwanese college-aged consumers. The scale of Purchaser Style Inventory for Sport Products (PSISP) was adapted to measure consumer decision-making styles (shopping styles) for sport products. This instrument is composed of 35 items under nine dimensions. CFA, 3 (Nationality)×2 (Gender) MANOVA and ANOVA were employed. According to the results of the study, there were significant different decision-making styles among three different countries in East Asia. Overall, Japanese male and female college-aged students exhibited higher brand consciousness than Singaporean and Taiwanese males and females. As consumers from different countries show different lifestyle, education, economic, religion, and culture, they might have their unique shopping styles. Therefore, the dimensions related to decision-making styles need to be explored, and the scale needs to be validated using a substantial sport industry sample in the future study. The study helps East Asian advertisers or markets to rethink and develop appropriate marketing strategies as well as to understand the different decision-making styles of local consumers and better approach new and existing consumer markets.

Finally, MacIntosh et al. address the management challenges in delivering an International Sport and Development (IDS) programme. The primary purpose of this study was to explore stakeholder perceptions of an international sport for development programme so as to identify some of the management challenges within a strategic management framework. Our secondary purpose was to provide recommendations for the focal organisation’s leadership based on those stakeholder perceptions. Hence, participants in this study directly experienced the facilitation and implementation of the international sport for development programme. Participant viewpoints are expressed in efforts to identify improvement opportunities in the delivery and operations of this sport for development programme. In this qualitative research, a case study design was chosen to produce a detailed account of the Commonwealth Games Association of Canada’s (CGC) IDS programme. Interviews were conducted with 24 alumni of the IDS programme, five CGC IDS administrators, and ten host IDS organisation administrators from African and Caribbean regions. Findings demonstrated shared perspectives regarding the challenges and various management practices among the three stakeholder groups investigated. In particular, funding and human resource stress was found to be the largest obstacles of maintaining programming and achieving desired outcomes. Several strengths and limitations in the programme design, monitoring and evaluation strategy, and programme documentation of outcomes were found which can presumably be used to help formulate management strategy moving forward in efforts for continuous improvement. The study does not take into account the stakeholder group of participants whom were deemed to be on the receiving end of the programme and not responsible for the delivery and operations of the initiatives which were the focus of the study. Recommendations in lieu of present challenges and objectives are also offered and are based on information from the facilitators and implementers of the principal programme of research and the results of the semi-structured interviews.

Simon Chadwick