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BIZCHINA> Olympics Economy
Pot of gold
By Diao Ying (China Daily)
Updated: 2008-08-18 11:36

As in China's economic opening up, some sectors have opened up faster than others in sports as well. Basketball and soccer went commercial much earlier than the rest and hence have a more mature business model. Some non-Olympic sports like snooker also started going pro from the very beginning. But for all other varieties of sports, China still follows the system it copied from the Soviet Union in the 1950s: athletes are "public owned", and their commercial activities are operated by associations representing the country.

Yao is one of the most successful athletes in terms of developing commercial value. Ever since he left for NBA, a whole team has been taking care of his endorsements and other business activities. Zhang Mingji, whose wife is Yao's cousin, and an MBA student at Chicago business school, leads the team that manages Yao's businesses both at home and abroad.

For his foreign deals, an economic professor at Chicago University, John Huizinga, has helped Yao draw up a complete marketing plan including negotiations with Houston Rocket and Reebok. At home, Zhang selected Lu Hao, a former basketball player, to work as Yao's agent. With the help of this professional team, Yao has managed his commercialization much better than other Chinese athletes. No surprises then that he has topped the Forbes fortune list of Chinese athletes for five years in a row.

Compared with Yao, Liu Xiang, who is just two years younger, is a "State-owned asset". His business activities are managed by the Chinese Athletic Association, and agents can only talk with him through the association. According to the rules of the General Administration of Sport, he has to divide his income with his coach Sun Haiping, the Shanghai sports administration - from where he got selected into the national team - and the national athletic association. So although Liu and Yao have about the same number of endorsements, Yao's income is more than double that of Liu.

Wei says the difference is natural since they have been trained under different systems. Basketball, according to Wei, is one of the earliest sports that was opened up and reformed. Yao does not have to train with the national team. He returns home to compete when there are major sporting events, and leaves when they are over. But Liu continues to be under the national system. The association takes care of him and he also gets subsidy from the country, so "he does not completely belong to himself".

Some of the younger athletes are completely out of the national system, and have achieved success through their own diligence and family support. The 21-year-old snooker player Ding Junhui, who was financially supported by his family, became famous in 2005, when he won the World Snooker China Open. The World Snooker Association now ranks him 11th.

His father Ding Wenjun, who used to sell cigarettes, sold almost all his belongings to support Ding. Now, apart from the prize money from the myriad competitions he has won, Ding Junhui makes a killing through endorsements. Last year, his income was estimated to be around 4.8 million yuan.

Yao's agent Lu also works as Ding's agent. According to him, more and more families now want their children to take up professional sports. Some sports, like tennis and equestrian, are popular among wealthy Chinese. "Many families are already rich, and think they can support their children in pursuing a professional sports career."


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