Asia’s investment in US Sports makes it an ‘Emerging Giant’: Repucom

MUMBAI: Over the past three years, investment from Asia into US sports franchises has been growing consistently. This comes in wake of a report released by sports management company Repucom titled ‘Emerging Giants’, which states that in the past two years, close to $1.1 billion has been invested by Asian businessmen in US Sports franchises.

All of the US big leagues now have at least one team fully or partially owned by an Asian-born investor. Asian ownership first came to American sport when Japanese company Nintendo bought the Major League Baseball (MLB) Seattle Mariners back in 1992. Ever since the team imported Ichiro Suzuki, who emerged as one of the great players in MLB history, there has been a steady stream of Japanese talent into the US league, drawing the world’s two biggest baseball markets closer to one another. Nintendo remains one of the few corporate owners of US teams.

According to the report, one of the most well-known Asian investors in US sport is Chinese-born software mogul Charles Wang of Computer Associates became the majority owner of the New York Islanders of the National Hockey League (NHL) in 2004. After failing in his efforts to get a new arena approved for the team in its original suburban New York location, he has decided to move the Islanders to Brooklyn’s Barclays Center for the 2015-16 season as the new arena’s anchor ice hockey tenant. India’s Vivek Ranadive’s investment in National Basketball Association (NBA)’s Sacramento Kings’s is pegged at $ 348 million.

Major investment in US sports sponsorship has been dominated by three big exporters from the region i.e South Korea, Japan and China and the key industry sectors are  automotive, consumer electronics and sports apparel.

Recent deals such as India’s Tata Consultancy Services’ decision to sponsor the New York Marathon has been pegged at $ 3.8 million. South Korean automotive brand Kia and their deal with LeBron James has been reported to be around $ five million and Kumho Tires’ deal with the NBA has been pegged at $ 2.6 million.

South Korean investment has come mainly in the shape of Hyundai, Samsung and Kia. Hyundai invested $8 million into the naming rights of the Hyundai Tournament of Champions on the PGA Tour in 2011 and Samsung’s $33.3 million per year deal with the NBA in 2013 has made the electronics company the league’s supplier of mobile device and televisions. As part of the agreement, referees of games in the NBA as well as the WNBA and NBA Development League will use Samsung tablets alongside the basketball court to review plays. Kia chose another route into US sports by targeting one of the most iconic venues in the country. Their $ seven million sponsorship deal with Madison Square Garden (MSG) in New York gives the company prominent signage in this famous arena, a custom-built display space at the entrance for its cars, tie-ins with the MSG owned New York Knicks (NBA) and Rangers (NHL) and an expanded presence on the MSG regional sports networks. Japan’s Sony Electronics sponsorship and technology agreement with the Barclays Centre in Brooklyn, home of the Nets NBA franchise, is another example of big name property rights purchasing. As part of the deal, 600 Sony professional and consumer HD screens are positioned throughout the arena.

Besides economic growth, the report mentions the various reasons for the driving trend for investment in sport which are as follows:

1) Health-The rise in interest and participation in sport is a reflection of efforts to promote health, and companies in the Middle East and Asia are using sponsorships of global sports as a means to engage local consumers with a healthy and active lifestyle message.

2)  Entertainment- With the growth of television and internet, the appetite for entertainment has surged across the Middle East and Asia. Given the lack of local sports attractions and the time required to build new clubs and franchises, investment in global sports properties is a short-cut to delivering programming that engages audiences.

3) Growing young population- Brands from the Middle East and Asia are using sponsorships of key global sports to target and engage this youth population.

4) National Unity- Governments from the Middle East and Asia see investment in sport as a key means by which to promote national unity in what are often markets which have very fragmented sociocultural sub-pockets, domestically speaking.

5) Social mobility- Encouraging people from all levels of society to follow and engage with sport, offers them a level playing field for social interaction.

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