x Abu Dhabi, UAESunday 23 July 2017

Asia tiger still holds sway as Europe suffers slowdown

Sport bosses across Asia are confident they can ride out the global financial crisis despite conceding the region is not immune from the fallout and they will have to start tightening their belts.

UBS continue to sponsor the Hong Kong Open, one of many high-profile deals in Asia that remain unaffected by the credit crunch.
UBS continue to sponsor the Hong Kong Open, one of many high-profile deals in Asia that remain unaffected by the credit crunch.

Sport bosses across Asia are confident they can ride out the global financial crisis despite conceding the region is not immune from the fallout and they will have to start tightening their belts. Officials from football, cricket, golf, rugby and the Olympics are braced for the flow-on effects of the global financial meltdown. While most administrators are adopting a cautious approach, they also believe the Asian sports market is better placed to weather the storm than the more established American and European sports.

The Asian Football Confederation president, Mohammed bin Hammam, said the AFC were already prepared for any financial problems because they had begun reducing their own expenditure well before the market collapse. "We have been facing these before the financial crisis. It started since the beginning of the year and not with the collapse of the markets," he said. "In terms of sponsorship and TV rights, these have not been affected and I don't anticipate that it will. The vast majority of sport in Asia is still amateur and the cost of the financial crisis [will] not mean anything for them."

The International Cricket Council (ICC), who are based in Dubai, are optimistic about their future. Cricket is a hugely popular sport in India, which has already been awarded the co-hosting rights to the next World Cup in 2011 and is leading the push for the expansion of television-friendly twenty20 competitions. "The ICC have a number of long term commercial and broadcast agreements that we believe should stand it and the game of cricket in general in good stead during any downturn in economic conditions," a spokesman said.

"Also, as a sport, it is possible to argue that the situation is slightly different from some other businesses in that people are still highly likely to watch and be interested in the game." Golf, a sport which has always been heavily dependent on financial institutions for sponsorship, is adopting a more wary outlook. The Asian Tour has been steadily growing with the increase of popularity of the sport in China, India and Japan and plans to form a united tour, but golf's reliance on corporate support is worrying the executive chairman Kyi Hla Han.

"From our side the banks that are putting in money in, like Barclays for the Singapore Open, UBS for Hong Kong and HSBC, they haven't really been showing signs they want to back out," he said. "Their profile and clientele in Asia are pretty strong and I think they still have to make it better." Organisers of Tokyo's bid to stage the 2016 summer Olympics said the crisis will have no effect on their plans. That is in contrast to London, where 2012 Olympics bosses have warned there is a £250million (D1.5billion) shortfall for the Games and the British government have released £95m of contingency funds to keep work on the athletes' village on track.

The slump in housing prices, which could damage the chances of recouping money from the village after the Olympics, has also seen the number of planned post-Games residential properties cut. Formula One, famed for its exuberance, is suffering too. Organisers of next year's French Grand Prix have cancelled the event as they cannot afford it. Wednesday's announcement came on the same day as news emerged that Formula One's governing body were proposing radical cost-cutting measures to help teams survive the financial storm.

It is football that has the most to lose, with the English game £3bn in debt. Uefa, European football's governing body, have considered banning clubs with excessive debt from taking part in their competitions. The rush of foreign investors into English football has cut the number of clubs on the stock market and the crisis means the whole idea could be a thing of the past, according to Simon Chadwick, a professor of sport business strategy at Coventry University.

"The public shareholding model of owning clubs has failed. Sooner or later they will all delist," he said Manchester City were recently bought by an Abu Dhabi-based consortium led by Sheikh Mansour, and the Dubai group Zabeel Investments are interested in Charlton Athletic, but a raft of further investments by Arab funds is unlikely in the current climate. "I would be surprised if there were more than three or four major Middle East investors," said Tom Cannon, professor of strategic development at the University of Liverpool.

In Spain, where Barcelona and Real Madrid are owned by their fans, there is a property crisis stemming a key source of revenue. In Germany the main worry centres on a lack of a new television deal with the Bundesliga contract expiring at the end of this season. * Reuters