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Triathlon company latest piece in Wanda Group sports pie
http://www.ecns.cn/business/2015/08-28/179119.shtml
Aug 28th 2015, 07:24
Dalian Wanda Group Co Ltd announced Thursday that it has agreed to purchase the World Triathlon Corp for $650 million, as it bolsters its roster of sports enterprises.
WTC, based in Tampa, Florida, is the largest operator of triathlon events, including the well-known Ironman brand. It accounts for 91 percent of the global market of long-distance triathlon events.
Triathlons comprise three disciplines - swimming, cycling and running - completed in succession. In the United States, more than 480,000 people participate in triathlon events, with over 4,400 separate races held each year.
The WTC acquisition represents another major Wanda investment in the sports sector. Wanda bought Swiss marketing firm Infront Sports & Media in February, and a month earlier it took a 20 percent stake in the Spanish soccer team Atletico Madrid.
"After the acquisition of WTC, Wanda will become the largest sports company in the world in terms of its revenue," said Wang Jianlin, chairman of Wanda Group, one of the largest private conglomerates in China. Wanda started as a real estate company several years ago and now has different business lines ranging from culture to sports.
Wanda believes that triathlons have a bright future in China. As the country's middle class grows, the Chinese are paying more attention to physical fitness. According to senior sports circles, China has millions of cyclists and tens of millions of runners, so the potential for triathlon participation may be huge.
Mark Dreyer is the founder of the website China Sports Insider. He wrote to China Daily that there has been a trend toward more physical exercise in recent years, but the starting point is more of an armchair sports-fan culture.
"At a high school level, where lifelong exercise habits are typically formed, extreme academic pressures have tended to crowd out the vast majority of extracurricular activities, especially sports, but the reforms in March this year to transform the soccer system from the grassroots level up have been encouraging," Dreyer said.
"Looking more specifically towards triathlons, running is growing in popularity with a number of city marathons and other shorter fun runs taking place all over the country," he said. "Cycling is still pretty niche. At an elite level, China is producing some world-class swimmers (Sun Yang, Ning Zetao, Ye Shiwen etc), but I'm not sure how much of this is transferring to the people."
Dreyer said Wanda is arguably the most important player in the sports industry in China.
"The purchase of Infront, which has strong ties to soccer, but also many other sports properties, will see many more international sporting events come to China in the future.
"The jewel in the crown would of course be the FIFA World Cup, and given (Chairman) Wang's personal interest in soccer and his desire to improve the state of the national team, I'm sure Wang will be using all of his lobbying powers to bring the World Cup to China at the earliest opportunity — which would be 2034 under the current FIFA rules, but don't rule out an earlier bid if Qatar loses 2022, or if new FIFA reforms change the bidding process," he said.
After the acquisition, the management team will stay in place at WTC to help promote triathlon events. Wang said Wanda also will reallocate some resources among the acquired sports companies to support the operation.
Wanda is looking to make more moves in the sports sector. Wang said the company plans to acquire two to three more world-class sports companies.
"We have two basic standards for our acquisition," Wang said. "First is that the sport can be promoted in China. Second is that we prefer companies who are owners of renowned sports brands."
Analysts say the acquisition by Wanda may not bring a significant profit to the group short term, but it can help promote Wanda's other business sectors.
"The acquisition is a kind of strategic investment for Wanda to gain wider international recognition. It probably will not create lots of real profit," said Guo Yi, marketing director of the Yahao Real Estate Selling and Consulting Solution Agency.
"The takeover helps to enhance Wanda's performance in other subsidiaries like its tourism and culture business by hiring renowned sports stars," Guo said.
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