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The Sound of Silence – Sport’s China Conundrum

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Performers wait for the 2008 Beijing Olympic torch relay at the Badaling section of the Great Wall on the outskirts of Beijing August 7, 2008. Photo: REUTERS/Joe Chan (CHINA)

By David Owen |

Sport’s relationship with China is endlessly fascinating. It is 35 years since the world’s most populous nation largely undermined the Soviet-led boycott of the 1984 Olympics by dispatching its top athletes to California and winning 32 medals.

For much of the intervening period, China needed sport more than sport needed China.

There were two reasons for this.

First, while there were millions of new fans to be won over, the commercial returns for leading international sports enterprises in the new market were initially tiny.

After researching the topic in 2005, I concluded that foreign investors were still finding that passion for their products amid the Chinese population was even then generating little by way of hard cash.

Second, as China permitted entrenchment of a market economy and emerged as a leading player in global trade without relaxing the iron grip of the Communist party, it needed the stamp of international legitimacy that sport could confer.

When Beijing won the right to stage the Summer Games, at the second attempt, in July 2001, it was the ultimate signal that, 12 years after Tiananmen Square, the state inhabited by something like one-fifth of humanity had been accepted as a respected and respectable member of the global community.

It was soon after the success of Beijing 2008 that the dynamics of the relationship between China and sport started to change.

Technological innovation and the Chinese leadership’s continued espousal of a policy of prosperity through international trade combined to prise open the domestic broadcasting rights market.

Suddenly, international sports organisations had a means of more satisfactorily monetising the huge Chinese interest in their products.

Chinese rights for Beijing 2008 are thought to have fetched less than $10 million (£8 million/€9 million), even though the Opening Ceremony alone drew a colossal local audience of 842 million.

By 2014, when the International Olympic Committee (IOC) agreed a new four-Games deal, covering 2018-24, with state broadcaster China Central Television (CCTV), the situation had been transformed.

As I reported at the time, that deal was believed to be worth more like $550 million (£350 million/€450 million).

I have recently seen it reported that a five-year basketball screening rights deal for China, signed this year, was worth $1.5 billion (£1.23 billion/€1.37 billion).

With these sorts of numbers, combined with keen interest on the part of Chinese multinationals for sponsorship agreements with influential sports bodies, not to mention a fast-growing consumer market for sports equipment and a still lively appetite for staging high-profile international sports events in the country, sport now needs China more than China needs sport.

Since reform in China has been confined to the economic sphere and this burgeoning market for sport remains under the thumb of an authoritarian system headed by President Xi Jinping, this transformed power dynamic implies acceptance of some potentially uncomfortable new rules if the relationship is to continue to prosper.

One of these – as illustrated with crystal clarity by the fallout from Houston Rockets general manager Daryl Morey’s recent “stand with Hong Kong” tweet – is that, on certain subjects, you keep your mouth shut.

The full consequences of what one eminent sports marketing advisor has already asserted is “shaping up to be the most costly tweet in sports history” have still to be played out.

But it is the sort of episode calculated to set alarm bells ringing at the IOC’s smart new CHF187 million (£154 million/$188.3 million/€171.8 million) headquarters.

The Houston Rockets and the National Basketball Association are primarily commercial organisations: they might not attract universal admiration if they adopted a policy of saying nothing critical about China; but it would be understandable in business terms.

The IOC has altogether loftier ideals: the Olympic Charter commits the Movement to political neutrality; but it also states that enjoyment of the rights and freedoms set forth in the document “shall be secured without discrimination of any kind, such as race, colour, sex, sexual orientation, language, religion, political or other opinion, national or social origin, property, birth or other status”.

The Olympic Movement is also about as multi-faceted as it is possible to be, embracing individuals from all creeds and a multiplicity of different organisations.

While it is hard to believe that the present stand-off in Hong Kong will remain unresolved come February 2022 when the Beijing 2022 Winter Olympics and Paralympics get under way, there are all manner of other potential China-related flashpoints – Xinjiang, Tibet, Taiwan – that might prompt individuals to speak out against perceived Chinese oppression. 

And should members of the Olympic family feel compelled to criticise their hosts on political or human rights grounds, chances are it will not be a good look if the IOC does not at least endorse their right to free speech.

It still does not seem to me that the China-related commercial risk to the IOC over the next two-and-a-half years is terribly high.

The international broadcast deals on which the Movement chiefly depends for its income seem highly unlikely to be affected by any repeat of the current basketball spat, and while Chinese companies do number among the IOC’s worldwide TOP sponsors, they have a long-term stake in the Games’ success and their presence may thus help to alleviate the impact of any political misunderstandings rather than exacerbating them.

Should some future row threaten to have an adverse impact on local sponsors or even ticket sales, meanwhile, it should be remembered that these are income streams earmarked principally for the Organising Committee; this money, in other words, however much materialises, is destined to be spent chiefly in China itself.

By contrast, the reputational risk to the IOC should Beijing come down hard on protesters in Hong Kong or other parts of its far-flung empire between now and 2022 seems far from negligible.

By this I mean the risk that some Olympics fans might question the IOC’s judgment in partnering with an intolerant and authoritarian regime, and voice criticism of its reaction to any moves by Beijing to reassert control.

My old Financial Times colleague, Jamil Anderlini, is one China expert who seems to have concluded that a clampdown is all but inevitable.

“Beijing will settle its scores and ‘Asia’s world city’ will never be the same again,” he wrote recently.

The protesters, moreover, are “well aware of this impending retribution”.

At a time when tensions all over the world are showing a tendency to escalate and the Olympic Movement’s image is no better than so-so, I fancy that Yu Zaiqing, China’s much-respected IOC vice-president, will be a key figure in helping Lausanne navigate a satisfactory path through what may be a more delicate period than might have been anticipated when Beijing was awarded the 2022 event.

It cannot, after all, be overstated just how much the Movement needs these next Winter Games to be a success – in every way.

Republished with permission from insidethegames.biz.

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