BTG Advisory provide comment on investment going to top-tier sport while some sports organisations fail to attract funds, changes in broadcast sales, and management in sports ruling bodies.
Top-tier sport continues to receive investment from states, broadcasters and specialist funds, but scratch beneath the surface and you’ll find a collection of sports organisations relatively struggling and living hand-to-mouth.
For a number of years, it was the oligarchs of the Middle East and Russia who saw major European sports businesses as the perfect investment vehicles to help them enter the inner circle of global political influence – while having a bit of fun with some of the planet’s best status symbols in the process.
But the tide has turned, and the eyes of the sports industry are now looking further eastwards: to China. The Red Dragon’s economy is the world’s second largest by GDP – and largest by purchasing power parity, according to the International Monetary Fund – but after ten years of rapid growth, an increase of 6.9% in 2015 marked its slowest annual growth in a quarter of a century.
To combat the slowdown and diversify the economy, the Chinese government and associated state-owned companies have looked abroad for investment opportunities in numerous key sectors and, in barely a decade, taken China’s OFDI (outward foreign direct investments) from almost zero to over $100bn annually.
While early Chinese investments focused on energy and natural resources in developing countries, the scope has now been broadened to include TMT (technology, media and telecommunications), real estate, leisure, construction and, sitting across several of those, sport.
Budding and internationally known sports properties, of course, not only give China sound investments but also strategic vehicles that make China a strong political influence on the global stage – platforms to show that China is a friendly and welcoming nation to a world that often views it with distrust.
Please click here to read more from our sport update