Asia offers hope to sports business

By Rico Hizon BBC World Business Report, Singapore

The Premier League is selling its brand in Asia this year

Sports - like other industries - is feeling the pinch of the global economic slowdown, as major companies have cut sponsorship and advertising budgets due to falling profits.

Meanwhile, many sporting events have been experiencing weaker attendance, or been forced to freeze admission prices, as people lose their jobs and tighten their purse strings.

However - despite the problems - Asia is one region giving sports a glimmer of hope.

Golf is currently underexploited, and I expect new brands will enter and sponsor the sport, Adrian New, Sin World Sports Group

Among the region's near-three billion strong population are many rabid sports fans - and that is a big incentive for major global brands and sports looking east for lucrative sponsorship deals, television rights deals and sales of merchandising products.

"There is a large potential in Asia for the following reasons - high return on investment, low cost of media, and a massive audience," says Adrian New of Singapore-based Sin World Sports Group, a leading sports marketing, event management and media company in Asia.

"Sponsorships across many sectors are strong - especially in beverages - but with the exception of bank and car sponsorships which has dwindled due to the global financial crisis."

'Next frontier'

With an estimated worldwide fan base of more than 300 million and counting, including 190 million across Asia, Manchester United had a very successful pre-season tour in Asia playing to packed stadiums from Malaysia, South Korea Korea and China.

Indeed, Manchester United CEO David Gill told local media that "merchandising plays an integral role in spreading the gospel of Manchester United".

The club earned an extremely healthy £64m from commercial revenue between June 2007 and June 2008, and is looking to sell its brand into every continent, particularly those where it hopes to make the next breakthrough.

Premier League clubs want to expand into India

And, like it rivals Liverpool and Chelses, next on the list for the Old Trafford club is India, with Mr Gill admitting that having never toured India it was "the next big frontier".

Aon is the next big sponsor of the team from the 2010-2011 season, and its decision to shell out £80m over four years to sponsor the club is largely down to the football club's standing in Asia.

The world's leading risk advisor and human capital consultant is practically unknown outside its US headquarters, but has seen how the AIG brand grew in Asia through their links with United.

Meanwhile Manchester United's rival Liverpool also did its share of touring South East Asian football hotbeds, visiting Thailand and Singapore.

They are not along in looking to benefit financially from their attraction in the region, with Hull City, Tottenham Hotspur and West Ham United all participating in the Barclays Asia trophy in China.

'Leverage sponsorship'

But football is not the only sport looking to cash in on the continuing interest in Western sports teams and superstars.

LA Lakers' star Kobe Bryant was fresh from the 2009 NBA basketball championships and finals - where he was named the Most Valuable Player - when he came to Asia to promote the NBA league and launch an exclusive shoe made especially for the region.

Kobe Bryant's tour of East Asia was backed by Nike

And the reception he received was overwhelming - being mobbed by fans during his visits - sponsored by sport apparel maker Nike - to the Philippines, Singapore, Taiwan, Hong Kong and Taiwan.

"I love Asia," he told the BBC. "I am welcomed with open arms. They treat me like family."

"My Asian fans are important to me. During this off-season, I decided to visit Asia because I wanted to interact with my fans especially in the Philippines and China. It's a joy for me to do this."

And Mr New of Sin World Sports Group said that the visit to Asia, on the back of the Lakers' NBA championship victory, was good news for Bryant, his fans, and Nike.

"He is an icon in the US," said Mr New. "With him here, Asia gets a chance to get close to a sporting hero, while Nike has been able to leverage its sponsorship."

'Entry cost'

Popular sporting events in the UK and the US from football, basketball, and baseball have gone not only global, but selected players from the region are also making a name for themselves in these top flight leagues.

Among these Asian superstars are footballers such as South Korea's Park Ji-Sung who plays for Manchester United, or Japan's Shunsuke Nakamura, formerly of Celtic and now at Espanyol in Spain.

There may be sponsorship openings around golf in Asia

Meanwhile, in basketball Chinese behemoth Yao Ming is a star at the Houston Rockets and Japanese baseball star Ichiro Suzuki is one of the biggest names at the Seattle Mariners.

By recruiting these top Asian talents, the fan base is growing for sports and individual clubs.

It all means that China, India, Japan and South East Asia all have to be taken into consideration when businesses, sports and clubs are drawing up there commercial plans.

If the connection between a business and sport works it could help propel a company sponsor into the consciousness of the region.

However, despite this, Mr New warns that not all sporting events will gain from Asia's massive market base.

"F1 will continue to suffer because of its high cost of entry for new sponsors, but golf and football will remain strong.

"Golf is currently underexploited, and I expect new brands will enter and sponsor the sport, while football is already full of sponsors."

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