World Cup: soccer business is big business

Asian Economic News, June 24, 2002

ULSAN, South Korea, June 21 Kyodo

As soccer fans around the globe turn their eyes on the World Cup finals in South Korea and Japan, the world's premier sports event has become the center stage for soccer business to break into the Asian market.

A boot camp for the Spanish national team and the venue for three World Cup 2002 matches, Ulsan serves as a microcosm of how soccer business is at work.

As Spain faces co-hosts South Korea in the quarterfinals in Kwangju on Saturday, Spanish soccer officials have seized the red-hot fever of Korean soccer fans, holding an exhibition of Spanish soccer in Ulsan in a bid to stamp Spanish soccer into the collective Korean psyche.

Elite Spanish league soccer teams such as Real Madrid and Barcelona have turned up in force in the exhibition, complete with their league championship flags.

Spanish club officials, too, are on hand to initiate Korean soccer fans into Spanish soccer, while recruiting followers to their official fan clubs.

Real Madrid and Barcelona may not be friends on the pitch, but they are united in their cause in Ulsan and other World Cup 2002 sites: how to tap the soccer market in Japan, South Korea and other emerging Asian markets.

Take Real Madrid, for example. Running this premier Spanish team costs the equivalent of 20 billion yen a year, and always there are big-ticket outlays.

Last year, Real Madrid spent 8 billion yen just to get the services of French star midfielder Zinedine Zidane.

As revenues from TV broadcasting rights, the main source of income for top soccer clubs, are peaking, Real Madrid executives are said to be desperate for new sources of income.

Florentino Perez, the Real Madrid chairman, minces no words when it comes to where he believes would be the next pot of gold.

''Asia would be our target. We feel attracted to the countries we know so little,'' Perez says.

The first steps toward that goal, apparently, lie with the recruitment of members to Real Madrid fan clubs.

Official fan clubs fetch around 20,000 yen in annual membership fees per person. And soccer officials hope the growth in the number of official soccer fans would give rise to pressure in more Asian countries to broadcast soccer games, and along with it more revenues from broadcasting rights.

Broadcasting rights apart, the hunt for promising Asian soccer players is also fair game for big money.

Japan midfielder Hidetoshi Nakata attracted the attention of the European clubs at the 1998 World Cup finals in France.

Japan lost all three matches in their first World Cup appearance but Italy's Serie A team Perugia saw enough to sign Nakata to the Italian first division.

Through TV broadcasting rights and other related soccer business, Perugia is believed to have made 2 billion yen from the Nakata deal, certainly a good business model for others to follow.

Thus, soccer agents -- those middlemen who ply their trade between soccer players and soccer clubs -- are making a run for their money to hunt for promising players from Asia.

According to a FIFA-accredited Japanese soccer agent, Chinese players have become a potential new target of acquisition for European clubs.

Some European soccer agents reportedly headed straight to China after the Chinese team lost all three first-round matches in South Korea.

While China apparently has yet to produce players with the caliber to play in major European soccer leagues, that is no worry for savvy soccer agents.

''We already know what we need to know about Japanese and Korean players. China is still very much a developing country in terms of soccer and with a huge population, the country is a tremendously attractive market,'' the Japanese agent said.