Tennis Market in China
A General Landscape of Tennis Development
According to a market research on audience rating, following football and basketball, Tennis has steadily become the third most popular sport for Chinese spectators to watch on television. Let’s look at the numbers, 30, 000 established tennis courts and a roughly estimated 14 million tennis professionals and enthusiasts are in the process of making this sport a rapidly growing sport in China. More surprisingly, based on a research done by Tom Cannon, a professor and sports finance expert at the University of Liverpool, this new emerging market is gradually generating approximately $4 billion per year.
Two Biggest Tennis Events in China
The Shanghai Masters, as part of the ATP World Tour Masters 1000, was established in 2010 in order to fulfill the desire of ATP and Chinese Tennis Association to develop the tennis market in China, and is held annually at the Qizhong Forest Sports City Arena in Shanghai. Yang Yibin, the Marketing Director of the Shanghai Masters, expressed that the situation of Shanghai tennis population has improved amazingly from 540,000 6 years ago to almost 1 million spectators in 2011. As one of the members of the organizing committee, what he really appreciated about ticket sales in 2011 is that it increased nearly by 40%, which means more and more people were attracted by this event but also that it depends less and less on sponsors.
However, China Open seems to receive a lot of controversial comments about its model of development, which lead to an awkward situation of sales turning negative. Although the sales of last year achieved a record of 110 million RMB, the main revenue is sponsoring with up to 90 million RMB from sponsoring deals and so less than 20 million RMB from ticket sales, and zero from authorizing broadcasting rights. According to the analysis of China Business Journal, this developing trend is damaging what a normal commercial tennis event should become. Take French Open’s operations as an example. The gain from selling broadcasting rights usually account for 45% to 50% of the whole revenue, ticket sales are able to make up to 30%, but sponsorship deals only grab the third place of the whole sales system due to its instability. Accordingly, the total value of this whole package could be estimated at 200 million Euros, with a profit margin at 20% to 25%.
“Li Na Gust” in China
After a prevailing “Li Na Gust” blown through the entire country, it seems that Chinese people experienced their second upsurge of tennis because Li Na has become the first Chinese player, even within Asia, to be entitled with the highest trophy of Grand Slam, at the French Open 2011. Consequently, with this award, hundreds of endorsement contracts for commercial brands proposed to Li Na made Tennis popular at the same time. However, only seven of them successfully signed with her with an estimated value at $42 million.
From Nike, Rolex to Haagen Dazs and SpiderTech, Li Na not only performed well in the female tennis rankings, but also made a big progress in the world’s female athlete ranking by annual revenues, just behind Maria Sharapova. On 19th June of 2011, this 29-year-old Chinese tennis player signed an endorsement deal with Daimler AG to endorse its Mercedes Benz, which is worth about $1.5 million annually for three years.