Tom to tap sports promotion market
By Liu Baijia (China Daily)
Updated: 2005-07-29 06:16

Hong Kong-based media conglomerate Tom Group sees huge potential in its sport-related business, an area the company is looking to strengthen to tap China's lucrative sports promotion market, the firm's Chief Executive Officer Sing Wang told China Daily.

"The sports business market in China is both large and small," said Wang.

There are millions of sports fans in China, but the sports promotion market is quite small, which could offer ample opportunities, the CEO said.

Tom Group, owned by China's richest man Li Ka-shing, is a major organizer of the China Open tennis tournament, and hopes to see its revenues from the event reach as much as US$30 million in the coming several years, even though revenues from this year's tournament will only hit US$6-8 million.

However, organizers of Wimbledon reap US$100 million from the event, meaning the China Open is lagging but has a lot of room to manoeuvre.

Tom Group, which claims to be the biggest sports promotion company in China, saw income from the business account for 12 per cent of its total revenues of HK$2.6 billion (US$333 million) in 2004.

"The first three years of running a tennis tournament are usually very difficult, but after that, it becomes easier," said Wang.

Although the China Open contract still has nine years to run, Wang hopes his company can make it a permanent fixture and the fifth grand slam event in the world, after those in England, Australia, France, and the United States.

He said that in the first three years, the main goal is to build a brand and experience, while high returns are not necessarily a priority.

He added that organizers have seen increasing enthusiasm from sponsors. Handset giant Sony Ericsson recently joined the list of companies backing the event.

Organizers will also try to sell more tickets to the tournament to expand the revenue pool after learning a few lessons last year.

The company, also an organizer of the Chinese college football league, said the league, with its huge influence among Chinese college students, should be able to lure more companies into sponsorship deals.

Besides tapping the potential of existing sporting events, Tom Group will also seek other business opportunities, said Wang, adding that these opportunities might come from abroad.

The company was reported to be interested in taking over the rights to the Formula 1 series, but Wang said this was just "speculation," although he did meet with executives from the organizing company of F1.

He said F1 may be too big for Tom Group to buy, but his firm was definitely interested in other forms of co-operation, on which he declined to elaborate.

On the other hand, Wang believes Tom Group could penetrate areas other than events promotion. He cited Chinese sportswear name Lining as an example of a way to expand his company's sports business.

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