Search

Dr Dan Parnell

FOOTBALL, SPORT, SOCIAL CHANGE, POLICY, MANAGEMENT

Month

January 2017

A feast for wolves China’s richest man is hunting the global sports and entertainment industry

By Simon Chadwick, Paul Widdop and Dan Parnell – originally published here.

From football to movies to Indian cricket, Wang Jianlin’s Wanda Corporation is leading a pack of business interests with the aim of building an entertainment empire stretching from China to Hollywood, Simon Chadwick, Paul Widdop and Dan Parnell write.

Wang Jianlin is China’s richest man, his fortune derived from his ownership of the Wanda Corporation. Wang set up the company in 1988, originally to deal in real estate. Through a process of conglomeration, the business is now also active across the hospitality, retailing, tourism, entertainment and sport industries.

This has enabled Wang to accumulate a personal fortune worth more than US$30 billion, and to build a company currently generating upwards of US$40 billion each year. This is a long way from his origins; Wang started out as a member of the People’s Liberation Army, later becoming an administrator in a local government office in the city of Dalian.

wanda-guanxi-diagram-768x570

Crucially, Dalian had its own football club, which was initially called Dalian Shipyards and later became Dalian FC (when it was taken over by the local government). In 1993, Wang acquired the club, renaming it Dalian Wanda. By the late 1990s, the football club had been sold again, although by this time Wang had already set about creating what has arguably now become the most influential business in world football.

Most people from outside China probably first became aware of Wang in early 2015, when Wanda purchased a 20 per cent stake in Atletico Madrid. At the time, the Chinese businessman talked of his intention to build a global entertainment business that would stretch from China to Hollywood. As the network visualisation below shows, Wang is following through on his intentions.

wanda-guanxi-diagram

We have followed the same procedure here as we did when creating our previous visualisation for Fosun. The outcome of this exercise reveals a network that at one level is very simple: Wanda is heavily invested into activities that can be broadly categorised as ‘cultural industries’. At another level, the network is so complex and diverse that it shows how influential Wang and Wanda have become.

Just like our Fosun analysis, the Wanda network visualisation further demonstrates the importance of guanxi – broadly defined as networks, relationships and connections – in Chinese business. In this network, the right of the diagram depicts an array of predominantly Chinese relationships that underpin Wang’s vision of a global entertainment axis. Whether it is Disney in particular or Hollywood in general, Wanda is already challenging global entertainment’s existing order. Indeed, the ebullient Chinese businessman hasrecently said of Disney that “one tiger is no match for [my] pack of wolves.”

Equally important in Wanda’s network, however, is the role played by both Atlético Madrid and Infront Sports and Media (ISM). Purchasing Atlético cost the Chinese conglomerate US$52 million, and the company has also recently agreed to take-up a naming rights deal on the Madrid club’s new stadium. In recent years, Atlético have been through something of a renaissance, twice reaching the UEFA Champions League Final. Yet the broader network in which Atlético is embedded is possibly more important to Wang’s long-term strategy of building his entertainment empire via sport.

Atlético Madrid are co-owners of Indian Super League football club Atlético de Kolkata. Together, the latter’s group of co-owners is called Kalkata Games and Sports Pvt Limited. The group consists of former India cricket captain Sourav Ganguly, businessmen Harshavardhan Neotia, Sanjiv Goenka, and Utsav Parekh, as well as Atlético Madrid itself.

Many people will recall Ganguly as being one of India’s best ever cricketers as well as one of its most notable national team captains. However, he is now a member of Indian Premier League (IPL) cricket’s governing council as well as being president of the Cricket Association of Bengal. It is worth noting too that Ganguly’s fellow Kolkata group member, Sanjiv Goenka, is also owner of the IPL’s newest team – Rising Pune Supergiants.

IPL cricket is a phenomenon, capturing the attention (and the wallets) of sports fans in one of the world’s most populous nations. Television viewing figures for a round of IPL games are heading towards two hundred million, reinforcing cricket’s position as one of India’s leading forms of entertainment (alongside Bollywood films). And through its investments, partners and connections, Wanda is therefore invested into one of 21st-century sport’s biggest commercial properties.

Wanda paid US$1.2 billion for ISM in February 2015; the Swiss-based sports marketing company manages the marketing and media rights of several of the world’s leading sports organisations. One of ISM’s biggest clients is FIFA, specifically the World Cup, for which it produces television content. This is helpful to Wanda, given its entertainment ambitions, and to the Chinese government and its vision for football. Wanda also serves as a World Cup sponsor, which gives the conglomerate unprecedented access to FIFA’s top decision-makers. This is helpful for a nation intent on one day hosting world football’s biggest tournament.

With the 2022 Winter Olympics due to be held in Beijing, and with China intent onbuilding a winter sport economy, it is helpful too that ISM also represents all seven Olympic winter sport federations, and manages media rights for the International Ski Federation’s World Cup events. This part of Wanda’s network of influence intensifies even further, as China Media Capital (CMC) and Shanghai Media Group (SMG) also have stakes in ISM. This links Wanda into the Abu Dhabi United Group, the China International Trust and Investment Corporation (CITIC), and the City Football Group (which owns a 13 per cent stake in Manchester City).

Beyond these important nodes in Wanda’s network lies a multitude of further, intriguing relationships. For example, there are links to controversial businessman Li Ruigang, who was president of SMG until 2011, a position he now holds at CMC. In another case, Wanda’s ownership of the AMC cinema chain extends the company’s network into the National Basketball Association (NBA) through an AMC board member who co-owns the Philadelphia 76ers.

If, as Wang has stated, his businesses are wolves, then he is without doubt leader of the pack. Indeed, as a voracious hunter who has accumulated massive corporate influence through his knowledge and understanding of guanxi, it seems likely that Wanda will not stop at hunting down Disney. Several of global sport’s leading properties, as well as some of Hollywood’s biggest assets (like Dick Clark Productions, which runs the Golden Globes) have already been gobbled-up. Expect the feast to continue for the foreseeable future.

Is austerity the biggest threat to sport of our time?

This article was originally published on Connect Sport here.

This is a short research note prepared by Dr Dan Parnell and Dr Peter Millward, of ConnectSport, which offers an insight into a recent special issue on sport management in an era of austerity, published in the European Sport Management Quarterly journal.

The research note is based on a special issue edited by Dr Dan Parnell, Professor Karl Spracklen and Dr Peter Millward, which can be found here: Parnell, D., Spracklen, K., & Millward, P. (2016). Special Issue Introduction: Sport management issues in an era of austerity. European Sport Management Quarterly.

What is austerity?

Following Blyth’s (2013, p.2) description, we see austerity as: ‘a form of voluntary deflation in which the economy adjusts through the reduction of wages, prices and public spending to restore competitiveness which is [supposedly] best achieved by cutting the state’s budget, debts and deficits’.

Why is this an issue for sport?

The impact of the economic crisis which has engulfed Europe since 2008 and the subsequent ‘austerity measures’ which have reduced local and national spending on many public services focused on the practices of sport management, has received only scant scholarly attention.

A previous ConnectSport article sheds some light on how austerity can impact sport. There is no doubt public, private and third sector organisations, from grassroots to elite levels have faced challenges as a result of austerity (Parnell, Widdop and King, 2015).

Reduced finances and significant changes to public funding has meant many within sport are being challenged to deliver more, with limited resources and evidence their successes. Indeed, the search (and scrutiny) for value for money is definitely on! As a result, the special issue is very timely for sport practitioners and policy-makers.

What does the special issue cover?

This special issue provides insights on the impacts of policy in an era of austerity utilising case studies from two sporting organisations in two different European countries.

The first paper, ‘Implications of austerity measures on National Sport Federations: The case of Greece’ by Chrysostomos Giannoulakis, Dimitra Papadimitriou, Konstantinos Alexandris and Shea Brgoch discusses the consequences of forced austerity measures, and the implications of having to cut jobs in order to help their heavily indebted economies.

In the second article, by Catherine Walker and John Hayton overview the situation of a third sector disability sport organisation in the United Kingdom (UK), describing how this organisation has navigated austerity by adjusting management practices.

The issues raised in these two contributions present a wide range of challenges and questions for those who research in, and on the impact of austerity in sport management.

The biggest threat of our time?

Some might reasonably argue that austerity-driven policy measures offer the key challenge to the sport disciplinary area so far in the 21st century – and yet, thus far, a clear gap in research around the issue exists.  Our scholarly and intellectual aim in collating this special issue is to trigger ideas, debate and interest with a view to filling this space.

How do we in community sport and research move forward?

Of particular interest, a non-exhaustive list of research ideas in this area might include:

   – Further empirical research on the impacts of austerity measures on sport policy cuts: There is a shortfall of quantitative and qualitative research that explores the physical impacts of austerity cuts to sport policy budgets across Europe.  The Continent has various levels of quality data which exist on this, but in countries such as England seemingly robust data of this nature exists in the Active People Survey.  Data of this nature needs to be utilised and mined to draw up a localised picture of whether or not – or to what extent – sport policy cuts have reduced sport participation at a grassroots level.

   – The impact of sport policy cuts on ‘hard-to-reach’ populations: Some sectors of European societies are well recognised to be ‘hard to reach’ with respect to facilitating physical activity, particularly including sport participation.  The evidence base that exists about those who have suffered through austerity measures might suggest there is overlap amongst the two groups.  Some state-resourced sport and leisure facilities have closed or had opening hours reduced as a result of reduced state resource, particularly if they are ‘committee-serving’ rather than ‘profit-making’.  We hope this special issue may support future research in listening to, and analysing the narratives of those who used those sports facilities that have closed as a result of budgetary cuts, especially if those populations are part of the ‘hard-to-reach’ populations.

   – Managerial dilemmas faced by decision-makers: The processes of gaining ‘more’ (or at least the same) for less presents real challenges for senior and middle managers of state sport facilities on all geographical levels across Europe. Yet their voices – as concerns and/or challenges – have so far not been heard.  A potential research avenue which could spring from this special issue might be to empirically and theoretically understand such dilemmas.

   – Opportunities for public-private partnerships: The reduction in public spending in areas such as sport facilities is assumed to be negative.  Yet such changes in the nature of budgets may open up possibilities for new public-private partnerships, which throw up a host of new questions for sport management scholars.  We hope this special issue might spur on future research in this area.

   – Challenges for elite sport provisions and future achievements: So far, the suggestions for further research have veered toward amateur sport participation.  Yet this is but one (sizeable) part of the web of sport in Europe.  How might budgetary cuts and changes affect elite sport provisions and impact of future achievements?  The voices of coaches and athletes need to be heard to understand this complex set of management issues.

   – Increased accountability of public resources on sport/sport-related projects: The public’s awareness of austerity measures has increased media scrutiny on the use of ever-scarcer state resources spent on sport and sport-related projects.  There have been widespread calls for ‘accountability’ of how such resources are spent.  What does this mean for those in sport management positions? Are new ‘surveillance’ measures put in place, are they helpful (and to who they are helpful/unhelpful?) and how are they managed by key stakeholders in the sport management process?

   – University and Third Sector partnerships: We suggest that this period of ‘super-austerity’ (2015–2020) (Parnell et al., 2016) could provide an opportunity or the platform for sport management to heavily influence the Third Sector sport industry. Academic institutes, particularly those in higher education, are facing their own respective challenges regarding reduced research funding and heightened need for impact. As such, universities may take opportunities to develop meaningful applied research activities and partnerships with Third Sector sport organisations (Parnell et al., 2015); developing university and Third Sector partnerships may help organisations respond to the economic downturn and in turn develop research outputs and tangible impact within the industry .

Summary

Our hope for the special issue is to trigger ideas and interest for a number of potential research contexts to develop and extend our understanding. Ultimately, we feel this important debate has just started and there is much more to add.

To do this, universities have a real opportunity to develop meaningful, collaborative, research-based partnerships that have a high probability of impact in sport-based organisations which need strategic and operational support (Parnell et al., 2015).

Finally, we challenge researchers to extend this preliminary list of ideas and take up the challenge to address this gap in academic and policy understanding.

Forthcoming conference: Readers, whether researchers, policy-makers or practitioners may be interested in the forthcoming Sport and Politics Study Group Annual Conference at FC United, hosted by Manchester Metropolitan University: Sport Policy and Politics: The Inequality Gap. Sport and Politics Study Group Annual Conference, Thursday 16 and Friday 17 March 2017 at FC United. To find out more – click here.

This research note is based on the following article: Parnell, D., Spracklen, K., & Millward, P. (2016). Special Issue Introduction: Sport management issues in an era of austerity. European Sport Management Quarterly – found here (open access is here).

Dr Dan Parnell is an active researcher and senior lecturer in Business Management at Manchester Metropolitan University. His research interests cover the sport and leisure sectors within the UK and he works globally on a number of projects, in particular the social role of sport. Contactd.parnell@mmu.ac.uk or follow @parnell_daniel on Twitter or access his research here.

Dr Peter Millward is Reader in Sociology at Liverpool John Moores University.  Many of his research interests relate to sport and he has published widely in this area.  Contactp.millward@ljmu.ac.uk or follow @PeteMillward79 on Twitter or access his research here.

Opinion: Can council-funded sport survive austerity?

Please go to the full article on the Sports Management website here.
But here is my contribution:
Local authority sport and leisure services continue to be at the sharp end of funding cuts and it has never been more important to consider how organisations navigate these constrained fiscal times.

Local government is in a phase transition and operating within a period of super-austerity. Recently we explored the management strategies of non-profit sport facilities in this era of austerity.

The headline findings highlighted two major challenges – reduced local authority services (ie, funding for maintenance, repairs or parks teams) and increased site operating costs. The management strategies adopted by facility managers to successfully navigate austerity included flexible pricing strategies, strong partnership working and income diversification.

In summarising the protective management strategies utilised by organisations and facility managers to navigate austerity, three characteristics should be viewed as favourable. These are: diversifying income streams; a link-up with a larger, established community organisation to share management functions and access to participants; and being well-networked, with links across other similar local and regional organisations and community stakeholders.

Ultimately, participation in sport is based on the user experience. The challenges associated with austerity cuts are reducing the quality of these experiences. To strategically move forward, more platforms are required to allow large-, medium- and small-sized organisations and facilities to network, share, inform and support and to assist in the development of collective strategic capabilities.

“More platforms are required to enable organisations and facility managers to develop collective strategic capabilities”

Create a free website or blog at WordPress.com.

Up ↑