A weekly newsletter that often deconstructs but always explains the business of sport from India
Good Morning Dear Reader,
The 2022 Winter Olympics in Beijing are just over two months away. China has already copped a lot of criticism from human rights groups over its treatment of religious minorities in the country’s western regions. The major sponsors of Beijing 2022, including Visa, Coca-Cola, Airbnb, and Omega, are under pressure to use their influence to address China’s “appalling human rights record”.
So, when Peng Shuai, a three-time Olympian, alleges that she had been sexually assaulted by a senior member of the Chinese Communist Party, and then disappeares for weeks, the scrutiny is only bound to grow.
Peng’s case has dominated international headlines over the last couple of weeks, even as China is trying its best to tell the world that she’s safe. Chinese state media even released a video in which a person speaking to Peng over a dinner table repeatedly mentions the date for no apparent reason. It would have been funny if the situation hadn’t been so grave.
This edition, however, is about a sports body that has come out and taken a strong public stand in support of Peng and, more importantly, against China—something you don’t get to see very often. And the possible reasons behind it.
Peng Shuai and the importance of WTA's stand against China
When Peng Shuai was 12 years old, she was told she’d have to undergo a surgery to correct a congenital heart defect. Her family thought she was too young to have the surgery and people doubted whether she could continue playing tennis. But Peng decided to have the procedure.
“They thought I would leave tennis, but surprisingly I didn’t give up,” she said in an Adidas ad in 2008. “Maybe because I love tennis so much, I decided to have this operation.”
It took a lot of heart and guts for Peng, now 35, to do what she did on 2 November. In case you aren’t aware, here’s what has happened in the last three weeks:
Peng alleged on Chinese social media platform Weibo that China’s former vice-premier Zhang Gaoli sexually assaulted her years ago. Her post was deleted within minutes, along with any mentions of it on China’s strictly censored internet. She disappeared for a couple of weeks, before reappearing last week in a series of photos and videos released by state media. The authorities also released an email purportedly written by her where she has taken back the allegations.
But a number of high-profile tennis players, including Serena Williams, Naomi Osaka, and Novak Djokovic, and human rights organisations have demanded more information on her whereabouts and a transparent investigation into the allegations.
But the most surprising entity to speak up for Peng was the Women’s Tennis Association (WTA), the principal organising body for women’s professional tennis in the world. On 19 November, the WTA tweeted a photo of Peng with the hashtag #WhereIsPengShuai.
A day later, WTA chairman and CEO Steve Simon released the following statement:
I am glad to see the videos released by China state-run media that appear to show Peng Shuai at a restaurant in Beijing. While it is positive to see her, it remains unclear if she is free and able to make decisions and take actions on her own, without coercion or external interference. This video alone is insufficient. As I have stated from the beginning, I remain concerned about Peng Shuai’s health and safety and that the allegation of sexual assault is being censored and swept under the rug. I have been clear about what needs to happen and our relationship with China is at a crossroads.
Simon even told the US media that the WTA, which has 10 events scheduled in China for 2022, was willing to “pull our business and deal with all the complications that come with it because this is certainly bigger than the business”.
Pulling out of China would reportedly cost the WTA tens of millions of dollars. It was only in 2018 when the WTA had signed a 10-year deal to move its season-ending WTA Finals to Shenzhen. The prize money for the tournament was also doubled to US$14 million. The governing body depends on the WTA Finals for a big chunk of its annual revenue. (The nine tournaments that the WTA held in China in 2019, before the pandemic, had a total prize money of about US$30 million.)
In an ideal world, there should be nothing surprising about an organisation that governs women’s tennis to speak up for a woman tennis player. Especially when the situation is so grave. But there have been numerous examples in the recent past when the largest of sports organisations have kowtowed to China because of the size of its market. China’s sports industry, with 1.5 billion potential fans, is expected to be worth US$800 billion by 2025.
In 2019, when footballer Mesut Ozil criticised China on social media for its treatment of minority groups in the Xinjiang region, his employer at the time, the Arsenal football club, distanced itself from his comments.
China’s state-run television network CCTV banned NBA broadcasts for a whole year in 2019 after the Houston Rockets general manager at the time, Daryl Morey, tweeted in support of pro-democracy protestors in Hong Kong. The NBA, to its credit, did not really apologise for the tweet, with commissioner Adam Silver saying Morey had the right to free speech. The NBA did, however, call his remarks “extremely disappointing”. It ended up losing around US$400 million as a result of a boycott from Chinese media and fans.
Companies like Apple, Marriott, McDonald’s, Calvin Klein, and Versace have all fallen in line and begged China for forgiveness after upsetting the authoritarian Communist Party, whether knowingly or unknowingly.
Which is why the WTA’s stand was so surprising. Even the International Olympic Committee only got its chief, Thomas Bach, to take part in a clearly staged 30-minute video call with Peng on Sunday. Bach said that Peng was safe and had asked for her privacy to be respected. However, there was no mention of the sexual assault allegations. Not that anyone really expected much from the IOC, given the 2022 Winter Olympics begin in Beijing this February.
So, why is the WTA willing to be ostracised by Beijing and risk millions?
According to experts, it could be a calculated risk from the sports body after considering its dependence on the Chinese market.
Since the WTA Shenzhen Open in January 2020, all international women’s tennis events in mainland China – seven last year and ten this year – have been cancelled due to the country’s stringent travel restrictions related to the Covid-19 pandemic. While almost all international sporting events in China have been cancelled for the same reason, the WTA has been harder hit than most. By comparison, the WTA’s men’s counterpart, the Association of Tennis Professionals, was only forced to cancel four events in mainland China in 2020 and three in 2021.
Yet the WTA has bounced back without China’s help. Before the pandemic, it held around 60 international events a year, with that falling to fewer than 30 in 2020. This year, however, has seen the total shoot back up to 67, suggesting that the WTA – despite setbacks to expanding its business in China – has been able to organise enough events to keep its calendar well-stocked
Why WTA has little left to lose in leaving China over disappearance of champion Peng Shuai, Hong Kong Free Press
The 2021 WTA Finals were held in Guadalajara, Mexico, earlier this month. Has the WTA learned to live without China? And will other sports organisations and governing bodies take a cue?
With Chinese premier Xi Jinping’s increasingly authoritarian regime and the country’s poor human rights record, experts believe a growing number of sports leagues and organisations will soon be forced to re-evaluate their China strategy. For Simon Chadwick, a professor of international sports business at the Emlyon Business School in Lyon, France, the WTA’s decision to confront China is a turning point.
“Over the last five years there had been a perception in the West that China is there for the taking — there’s lots of money, economic growth is strong, a growing middle class, disposal income, and we can go feast on this,” Chadwick said. “What has happened for some sports organizations in the West is that they have not found China as lucrative as they imagined, and they have also found China incredibly difficult to do business with.”
[...]
“I absolutely think over the long term that major sporting events will be hesitant moving forward to schedule out in China right now,” said Thomas A. Baker III, a sports management professor at the University of Georgia who has done extensive work in China. “The China that welcomed the world in 2008 is not the same China that people are doing business with in 2021.”
Of course, there’s unlikely to be an immediate impact. Despite growing calls from human rights groups to boycott Beijing 2022, it’s unlikely the Games will be significantly affected. At the most, there might be diplomatic boycotts from a few Western countries.
But if this episode can get sports organisations and sponsors to think twice before doing business with China—or any other authoritarian regime that’s trying to cover a poor human rights record with sportswashing—then it’ll be a start.
For now, one can only hope that Peng is actually safe.
Quick singles
📺🏏 Sports will be a key area of focus after media giants Sony Pictures Networks India and Zee Entertainment complete their proposed merger, confirmed Punit Goenka, who will be the managing director of the merged entity. “The opportunity is great, because the digital landscape has opened up a new opportunity for monetisation, which did not exist five years ago. And the sector itself will see a lot more happening going forward,” he said. [Mint]
💰 Sports tech company Dream Sports, the parent firm of fantasy sports platform Dream11, has raised US$840 million at a valuation of US$8 billion. The funding round was led by existing and new investors, including Falcon Edge Capital, DST Global, D1 Capital, Redbird Capital and Tiger Global. Dream Sports had raised US$400 million at a valuation of US$5 billion as recently as March. [The Economic Times]
🚫 The crypto ads you’re seeing on TV while watching cricket matches in India are set to disappear. The Board of Control for Cricket in India (BCCI) has sent a directive to all Indian Premier League (IPL) franchises and media rights holder Disney India to abstain from signing any sponsorship deals with cryptocurrency exchanges. This was after the Indian government announced that it will soon introduce a bill that will regulate virtual currencies and voiced “serious concerns” about private cryptocurrencies. [The Economic Times]
🇦🇪🏏 India’s largest conglomerate Reliance Industries Limited (RIL) has confirmed that it will own one of the teams in the newly announced Emirates T20 League in the UAE. RIL already owns the Mumbai Indians, the most successful franchise in the IPL. Reports suggest the owners of the Kolkata Knight Riders franchise and English football club Manchester United are also interested in buying teams. [ESPNcricinfo]
🟡🤑 Tyre manufacturer TVS Eurogrip has signed a three-year deal with IPL champions Chennai Super Kings to become a principal sponsor of the franchise. The deal is reportedly worth Rs 100 crore (US$13.4 million)—one of the highest in the IPL. [Business Standard]
What we are reading
I’ve been told by a couple of readers that I often talk about Manchester United in this newsletter. Guilty. But allow me once again to indulge myself.
Manchester United have a new interim manager in Ralf Rangnick, known as the godfather of gegenpressing—an intense style of football in which teams press high and use counterpressing to win the ball back. Rangnick, 63, has influenced a number of German managers, including Liverpool’s Jurgen Klopp and Chelsea’s Thomas Tuchel.
So, how exactly will Rangnick impact Manchester United? The Guardian has a nice piece.
And if you’re a subscriber of The Athletic, you can check out this excellent article by Raphael Honigstein. Here’s an excerpt:
“Working with him can be difficult because he expects things to happen immediately,” a Bundesliga official who knows him well tells The Athletic. “There’s no such thing as ‘tomorrow’ for him. He’ll call you late at night with an idea —he never stops thinking about football during his waking hours — and he expects you to have a good answer straight away. He’s very demanding. It can be overwhelming for those who don’t know him because he wants them to develop and innovate very quickly. But those can handle those type of demands tend to grow a lot in their careers. He pushes you to get better along the way.”
[...]
Rangnick hired people for jobs that hadn’t existed at football clubs before — a video analyst, a sports psychologist — and devised complex training sessions that put the players under a maximum of mental pressure in order to make the real game feel more comfortable by comparison. His game also required an integrated transfer strategy. “He only brought in players that were right for playing his way,” Helmut Gross said. “They were mostly young, U23s, open-minded, physically strong and quick in a cognitive sense. Older players often want to play at a slower pace because their bodies and minds slow down.”
The rise of Ralf Rangnick, godfather of German coaching, manager of Manchester United, The Athletic
Tweet/video of the week
⚽️🤯 Thiago Alcantara scored a world-class half volley for Liverpool against Porto in the Champions League earlier this week. Just check out the physics of this goal via these twogifs. Did the ball touch the ground? I’d like to believe it didn’t.
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