Football club sponsors from China: An enigma wrapped in mystery

May 28, 2019 15:28
Argentine club River Plate has been sponsored by Huawei. The Chinese smartphone giant was involved in several high-profile sponsorship deals including with Arsenal, Atletico Madrid and Borussia Dortmund. Photo: Reuters

When Liverpool and Tottenham Hotspur line up against one another to contest this season’s UEFA Champions League final, they will do so at Atletico Madrid’s Estadio Metropolitana. An otherwise unassuming concrete sports stadium close to the Spanish capital city’s airport, the venue normally masquerades as the Wanda Metropolitano.

UEFA rules dictate that such stadium naming rights deals cannot remain in place during the finals of its competitions, as they may clash with commercial deals the governing body has. Even so, the rendering of Chinese company Wanda into anonymity somehow parallels the company’s fortunes at Atletico.

Back in 2015, when China’s President Xi-induced football frenzy commenced, Wanda’s owner Wang Jianlin was quick to begin a program of overseas football investments that included acquiring a stake in Atletico, as well as the club’s stadium naming rights. However, by 2017 Wang had been forced to rapidly divest himself of some foreign assets, most notably most of his share in the Spanish club.

The name Wanda is nowadays a symbol without substance, a brand that to many people outside China probably means very little. Wanda has since been reincarnated in another football sponsorship form – it is now a FIFA partner, alongside other Chinese brands such as Mengniu (a dairy product business). Mengniu is, however, no less anonymous outside China than many of its other football sponsorship compatriots.

Other Chinese companies have similarly spent big on football sponsorships, but then subsequently retrenched. Huawei was involved in several high-profile deals - including with Arsenal, Atletico Madrid and Borussia Dortmund - and remains connected with some other football clubs, players and sports. Sponsorships were a good way of raising awareness for the brand during the formative years of its global ascent.

But times have changed; Huawei is now a globally well-known telecommunications company, one of the world’s biggest. It has also become notorious in some countries, drawing attention from security services in places such as the United States and Australia. As scrutiny of the company has grown, the brand seems to have somewhat retrenched from football sponsorship. Gone is the Huawei brand from a number of football shirts.

Huawei’s controversial recent history is, however, not wholly untypical of football’s engagements with Chinese companies. In 2018, Arsenal became embroiled in a fraud probe linked to a sponsorship deal the club had signed with car maker BYD. Having announced the deal, it subsequently became apparent to the English Premier League club that it had been apparently been duped by a woman who falsely claimed to be a BYD representative.

And the signs are that things might not be getting better. Another Premier League club, albeit one with a Chinese owner, recently announced a record-breaking sponsorship deal with a company from China. From next season, Southampton’s shirts will carry the logo of LD Sports. Problem is, the company has yet to launch, it is unclear what it does, and its website URL leads nowhere. Alarm bells are already sounding that the deal may not be what it seems.

Which otherwise leaves a bundle of gambling brands as perhaps the most visible manifestation of Chinese investment in club football. For instance, Fun88 has deals with several teams including Newcastle United and Tottenham Hotspur. As such, many football fans across the world will be familiar with Chinese character script appearing on team shirts or on pitch-side rotational during matches.

The prevalence of Chinese gambling sponsorships reflects the alignment of several factors. In mainland China, gambling is technically illegal though using sites offshore to place bets is one way for punters to circumvent this. At the same time, football provides the uncertainty that gamblers crave, while European football confers visibility upon the Chinese betting brands that engage in sponsoring it. All that said, money and gambling is hardly a good look for Brand China.

All of which probably explains the absence of any significant mention of Chinese sponsors in Brand Finance’s recently published report on brands in football. Several companies from the Middle East do appear, largely due to the significant investments being made by the likes of Emirates Airlines (at clubs like Real Madrid and Manchester City). Japanese companies also feature in the report, with Rakuten (at FC Barcelona) and Yokohama (at Chelsea) being prominent. Inevitably, western corporations – like Chevrolet at Manchester United and Jeep at Juventus – are ubiquitous.

This raises questions about why Chinese companies haven’t made (and don’t seem inclined to make) any big breakthroughs into major football club sponsorships. Of course Vivo, Hisense and others have their deals with FIFA, but when it comes to first-team shirts we have yet to see, for instance, Baidu badges at Bayern.

The paucity of Chinese shirt sponsors is probably explained in several ways, both individually and in combination. One senses that the sponsorship industry in China is an immature one, with understanding of the medium within companies and by brands still developing. Hence, it is not routinely seen in China as being an especially important way of engaging with consumers.

Indeed, the perception amongst informed decision makers is likely to be that social media is the best way to target key market segments. Younger people and affluent members of the middle class are more likely to be induced online to buy something, rather than enticed by a football shirt deal. Furthermore, many of these people do not associate football with product purchase, but with corruption and poor quality – something that prospective sponsors will be aware of.

It is also likely that Chinese corporations would prefer to own a football club rather than sponsor one, something that is already common in the country’s Super League. Otherwise, one should keep in mind that the Chinese government remains hyper vigilant to excessive (what it itself terms ‘irrational’) outward currency flows. Chinese companies may feel unable to spend big on overseas sponsorship investments, possibly to the detriment of domestic football.

Hence, one imagines that the priority is to initially spend in China, and only later overseas. This perception is one that is likely reinforced by Chinese government, which imposes a China first policy across many aspects of the country’s activities. It seems therefore, that for the time being at least, the current absence of Chinese companies from high-profile football sponsorships will continue.

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Wang Jianlin, the chairman of Dalian Wanda, began a program of overseas football investments that included acquiring a stake in Atletico Madrid football club. Photo: Reuters
This season’s UEFA Champions League final will be held at Atletico Madrid’s Estadio Metropolitana, also known as the Wanda Metropolitano. Photo: Reuters
Arsenal team in the dugout, with the BYD logo painted on the seat. The Chinese firm is the football club's official car and bus partner. Photo: Arsenal Football Club

Simon Chadwick is Director of Eurasian Sport, Professor of the Eurasian Sport Industry Director, Centre for the Eurasian Sport Industry.