For the past few years, Infront Sports & Media has been perched between one sporting world and the next.
A Swiss agency largely focused on rights trading and activation for traditional federations, its transformation began in 2015 when it was bought from private equity firm Bridgepoint Capital by Chinese billionaire Wang Jianlin’s Dalian Wanda Group in a €1 billion deal. Later that year Ironman promoter World Triathlon Corporation (WTC) was added to what would become the Wanda Sports Group, which further expanded through the acquisitions of the likes of digital platform builder Omnigon back in January 2016.
The result is an organisation with one foot in the heart of the international federation world and another in sport’s greatest emerging power, combining agency fundamentals with an increasingly digital-first outlook, and its work at the elite end with the creation of an ever-broader set of mass participation properties.
“From a business perspective, Infront has developed quite significantly,” says Philippe Blatter (left), the Infront president and chief executive who is also president and vice-chairman of Wanda Sports Group. “We prolonged the rights with the EHF [European Handball Federation]; entered into a cooperation and partnership with [world basketball governing body] Fiba; and we have been working with the BWF in badminton, another new venture.
“Add to this all of the prolongations we have successfully negotiated. We have posted double-digit growth over the last few years, whilst investing quite significantly in our digital offering. We now have over 1,000 people working at Infront, and more than a quarter of these are in digital.
“Ironman has also grown substantially under the leadership of Andrew Messick. They diversified their business from triathlon, going into running with the Rock ‘n’ Roll Marathon and the World Marathon Majors, as well as mountain biking with Cape Epic.
“Wanda Sports China, ldt by David Yang, was built from scratch by operating as a partner of the UCI [International Cycling Union] for the Tour of Guangxi, as well as for the China Cup [an invitational tournament for national soccer teams]. They stage numerous races here in China for Ironman and thanks to their acquisition of a company in Chengdu, they have begun to run a series of marathons across China.”
Infront and the rest of its associated suite of companies operate as their own entities but “under the Wanda umbrella”. A group leadership team meets regularly and can identify the right unit to manage new concepts, as well as shuffling opportunities across the collective.
Despite a rise in global profile through initiatives like sponsorship of world soccer’s Fifa, the parent Wanda Group has scaled back some of its own ambitions in entertainment and property development. The Wanda theme park business and its stake in Spanish soccer club Atlético Madrid have been among the assets shed amid falling earnings and pressure from the Chinese government to reduce debts.
Wanda Sports Group, conversely, looks to be in better shape. Its revenues rose 12.3 per cent in 2017 to 7.2 billion yuan (US$1.03 billion). An initial public offering (IPO) was reportedly being explored early in 2018, but either way that financial performance is a strong platform from which to pursue Blatter’s goal to make it “the number one global sports platform in the world”.
China to the fore
Blatter is speaking to SportsPro in October at the inaugural Fiba World Basketball Summit in the Chinese city of Xi’an, part of something of a roadshow for the sport ahead of the Fiba Basketball World Cup in the country in August and September 2019. His first overseas trip after joining Infront back in 2005, he recalls, was to a Chinese Basketball Association (CBA) game, and the impression he has gained throughout that time is of a “complex”, rapidly changing territory where local knowledge matters.
“China is different in its own way,” he says. “It is a huge market: there are 1.3 billion consumers and potential fans here; there’s 380 million households. So on the media side, there are still opportunities in the fact that today, there is one key player who plays a central, pivotal role in sport – CCTV – but in every other market we see much more competition.
“The Chinese have extremely strong digital affinities, they are digitally linked; they use their mobiles for nearly everything. This is where the huge potential is - and it is being captured by Tencent and the big technology companies, who need to appeal to the sports fan by delivering products in the mobile space. Technology will play an important role.
“Sponsorship is seeing solid growth, but I believe there is still potential in the way that sponsorship in China today is, to a large part, about awareness, about seeing the brand. There is maybe more to do in terms of building a real partnership with the rights holder in creating activations beyond simply brand visibility.”
It is only a question of time when China hosts the Fifa World Cup
Philippe Blatter, Wanda Sports Group president and chairman
Local tastes, Blatter notes, tend towards overseas events like the Uefa Champions League, the Fifa World Cup, and the National Basketball Association (NBA). In the near future, though, he expects domestic properties like the CBA and soccer’s Chinese Super League (CSL) to become more successful exports.
“You see the CSL has now completed contracts in more than ten countries outside China,” he continues. “They have a Twitter channel. We were the first with the CBA, back in 2010, to distribute the media rights in the US. There is clearly much more potential here, which is what differentiates China in terms of the commercial sports market to Europe and the US.”
Not only that, but another cycle of international events is now making its way to China. Blatter believes that the Fiba Basketball World Cup, being played in “one of the few countries” where the sport outranks soccer as the most popular, will “create huge momentum” and be “not a Chinese competition but a global competition”.
“It is the main event next year – worldwide – in terms of World Cups and world championships,” he argues.
Blatter also suggests that the Basketball World Cup, and the Beijing Winter Olympics in 2022, will give China its best chance since the Beijing 2008 Summer Games to demonstrate “how well they can organise events” and “how friendly and welcoming the people are”.
“It is only a question of time when China hosts the Fifa World Cup,” he states. “Now it is down to politics to decide when that will be.”
Between China’s burgeoning status as a major events hub and the presence of Olympic Games in South Korea in 2018 and Japan in 2020, Infront’s mostly European-based federation clients “in 25 different sports” have put Asia “at the top of the agenda”.
“We see huge investments now in China in terms of building new winter sports infrastructure,” Blatter says. “And we believe that with this wealthier middle class I talked about before, when we say they want entertainment, skiing and understanding ice hockey and biathlon is an important part of that.”
Wanda Sports Group’s presence on the world stage has grown in line with that of China, host of the 2019 Fiba Basketball World Cup
The mass participation opportunity
Alongside its activities in the upper echelons of professional sport, Infront and latterly Wanda Sports Group have been aiming to carve out an identity as a global leader in mass participation since 2011. This has partly been through acquisitions - including buyouts of the Rock ‘n’ Roll Marathon Series and Chengdu-based endurance promoter Double Heritage - but also through the creation of new IP like its Happy 10k runs.
Wanda Sports China, in particular, has a heavy accent on developing mass participation events.
“What we see in China, as we see in Europe and the US, is the beginning of an ageing population,” explains Blatter, himself a triathlon enthusiast. “Here, the leaders of the country are visionary in that they see that in a decade or two, the Chinese will face the same health challenges that we have back in the western world, and which take a massive economic toll. So you see them promoting physical exercise, encouraging the nation to do sport.
“That is one part of the equation. The second part of the equation as we see it is that as China’s middle class earn higher salaries, they are looking for a better education. They want to travel to see the world. But they are also interested in being healthy, in looking after themselves. And they want to experience something that money can’t buy.”
Mass participation and endurance events have enjoyed explosive recent growth in China, with “more than 400 marathons in the last five or six years”.
“It has been the same with the introduction of the 70.3 Ironman races – they have sold out fast in China,” Blatter says. “There is massive demand which we are confident will continue given the government’s active support.”
Wanda Sports China has developed mass participation events in response to China’s fitness boom
Beyond the opportunities in reaching an increasingly health-conscious population and tapping into a developing experience economy, Blatter sees “huge demand” to be satisfied “for coaching in how you train, nutritional advice, what kind of materials you need, etc”.
“All of this needs to take place here in China,” he says, “and then there is the digital realm: people like to share their training schedules and to compare themselves with other athletes. In Europe and in the US you have the Stravas of this world, the relief apps, and these are not yet established here.
“The training schedule is a big part before the race. It is not just about the two, three or four hours of the race that you do in a marathon or the 12 hours that you do in an Ironman. It is what you do before and then, once you’ve finished, what you brag about: sharing that you’ve passed the finish line and all this stuff. There are definitely opportunities here.”
The digital future for sports agencies
For all the healthy prospects Blatter sees for Infront and Wanda Sports Group in China and beyond, these are challenging times for agencies.
The sponsorship market is in a state of transition, with some brands looking to spend their money elsewhere and those still pursuing sports partnerships now trying to activate more efficiently. The broadcast market has been even further disrupted by changes in media, with rights holders needing to find new routes to their income.
Those difficulties are exemplified in the decline of another agency that had previously been the subject of a big-money Chinese takeover. In October, two years after its owners sold a controlling 65 per cent stake to Everbright Securities and Beijing Baofeng Technology, MP & Silva was issued a winding-up order in the UK’s High Court. A petition to dissolve the business had been issued by the French Tennis Federation (FFT), one of a number of partners to whom MP & Silva had missed payments after agreeing guarantees to market broadcast rights on their behalf.
It is only when you start talking to your consumer that you really create value for your brand
For Blatter, these tremors in the agency marketplace are a sure sign of the need to evolve to continue to meet clients’ proliferating needs. Infront itself began “its own intensive digital transformation two or three years ago” to help partners find a younger demographic who “consume much less traditional media”.
“Reaching them is still in some ways feasible because you need to put in an OTT platform or stream content,” he says, “but the challenge is to engage with them. Because it is only when you start talking to your consumer that you really create value for your brand. But to do that, you have to speak their language.
“Today, the fan is a content creator, and the fan communicates on his own channels and maybe not the channels that we use as a sports marketing company, or that the rights holder is using or that the brand is using. And that, I think, is the big shift to manage – to speak the same language as the fan.”
Infront is encouraging rights holders to think beyond the live event and to the content their own fans are publishing – or that they can create to engage fans differently. The NBA’s ‘micro-transaction’ scheme, where viewers can tune in to watch the final quarter of the game, is one approach he endorses, but he also speaks up the need to continue building touch-points throughout a fan’s digital life.
“There is radical change going on in the ecosystem of a specific target consumer group,” he adds, “which is interesting for brands – and for federations, because they need to have young people following their sport.”
Esports is inevitably an area in which Infront has a growing interest, with a group dedicated to working with “what you would say are ‘old school’ federations” on effective strategies. A Centre for Innovation at Infront has also been in operation for the past two years, engaging startups in searching for more radical uses of technology in the fan experience.
“For example,” Blatter says, “at the IIHF World Championship [in ice hockey] we had a project together with a company called WSC where we installed technology, which allowed every fan, in real time, to do his own clip. If you wanted to see the best catch from the goalie from the Russian team, then you just put this in and it would give you the clip in real time – all done by technology.
Infront and Wanda Sports Group have embraced digital technologies to meet the changing needs of their clients
“Another innovation we are currently introducing is Viz Eclipse, a virtual advertising solution. We do that together with Vizrt, a specialised company. Viz Eclipse uses artificial intelligence and is the first technology that is non-invasive, meaning you do not have to change the cameras around the stadium and you can have virtual advertisements anywhere you want without having to install technology on the cameras, which is costly and is not really liked by the rights holders.”
More generally, Blatter senses an appetite for change among sport’s old guard as he seeks to position Infront as a “one stop shop” for them.
“The federations – rights holders in general – have professionalised significantly,” he says. “They read the same newspapers, they read the same blogs, read the same social media posts that we do. Many of their representatives also have kids who are teenagers who consume sport differently. And for many, we come and say, ‘This is a new idea. Would you like to do it?’
“The acceptance to try new things is certainly there. There is a big gap between, ‘Oh, there’s a new technology, I’d like to have it,’ and to implement and monetise it. This is where, for many rights holders, it becomes a bit more difficult because either they do not have the right people or it is not in their mission statement – it is not what they want to do.
“If you look today at media distribution, it has become so much more complex than ten years ago where you went to a broadcaster and you would sell him all your rights. Now it is about how you segment your rights, to whom you sell, what you do for free – it is so much more complex and that is where we can help them.”