Aug 22, 2008

Sport - What chinese stars earn

Xu Haifeng was the first Chinese to win an Olympic gold medal. That was in the 1984 free pistol shot competition in Los Angeles, and it earned Xu the first national prize money for an Olympic champion--9,000 RMB (about $1,312) and a salary increase from 51.5 RMB ($7.50) to 98 RMB ($14) per month. "At that time, that was already considered a lot of money," says Xu, now the deputy director of China’s Cycling and Fencing Sports Administrative Center.

No longer. While Xu Haifeng might have been one of the first athletes to make any money out of his sport, China’s top-earning athlete is now NBA star Yao Ming, whose estimated income for 2007 was 380 million RMB ($55.4 million). The country’s second biggest earner is Shanghai’s Liu Xiang, whose 2004 Olympic gold medal in the 110-meter hurdles earned him 160 million RMB (about $23 million) last year. Both are beneficiaries of China’s changing economic system. Wei Jizhong, a consultant to the Beijing Olympic Organizing Committee, and former national sports official who led the women's volleyball team to five consecutive championships, points out that during Xu Haifeng's era, people around the country were still discussing whether or not China should adopt a free-market economic system, not the commercialization of sports. "Xu Haifeng won in 1984, but the formal decision to adopt a market economy was made after [former Communist Party leader] Deng Xiaoping's 1992 southern tour," says Wei.

The changing stakes have led to changing attitudes too. While older athletes saw their sports as more about the glory of themselves and their nation, the new generation has learned the value of packaging itself. One example of an athlete ‘on message’ is Liu Xiang as spokesman for Amway’s nutrition supplement Nutrilite. At one press conference for the brand, Liu Xiang’s first comment was a plug for the brand. "It's been my dream to represent Amway,” he said as he took his seat. “From a young age, I used Amway products my father's work unit gave to him and felt they were great." When a journalist asked about Liu's dreams for the future, the athlete did not speak about hurdles or life, but instead resolutely said, "I hope everyone will use Nutrilite."

Olympic medals don’t always bring in the money. Lu Hao, a high profile sports agent whose clients include Yao Ming, says that athletes’ market values are closely related to their media exposure and the type of sport they play. That’s why the gorgeous young athletes on the national badminton team--featured last year on a magazine cover that presented them dressed like Hollywood stars--have signed contracts with Federal Express, Bank of China, Pepsi and L’Oreal. The Chinese Ping-Pong team, by contrast, lags behind in these deals, in spite of its excellent match performances.

Most athletes, also, are still managed by state organizations. While sports like basketball and soccer are more commercialized than others, most still fall under a system called Sports for the Nation, where the value of an athlete’s brand falls largely under the domain of “state assets”. Yao Ming, who moved abroad to play, has an international team of professional money managers. Liu Xiang's "state owned" business activities, on the other hand, are managed by the Chinese Athletics Association. Intermediary organizations must pass through the Association to discuss advertising representative business. Under the state-owned athletic system, athletes' advertising earnings are allocated by provisions of China’s State General Administration of Sport. Accordingly, Liu Xiang keeps 50 percent of his earnings, with 15 percent going to his coach Sun Haiping, and 20 percent to his hometown Shanghai's sports bureau. The remaining 15 percent is allocated to the Chinese Athletics Association. Although there isn't a vast difference between the number of ads done by Yao Ming and Liu Xiang, the hurdle star’s income is less than half of the basketball star. “Yao Ming is already a professional athlete,” says Wei. “He only participates in national training for a short time when there's to be a match. Under the national system, athletes receive government subsidy and are financially taken care of by the state. So they don't entirely answer to themselves."

Chinese athletes who disobey the rules can pay a heavy price. In 2005, Sydney Olympic diving champion Tian Liang was removed from the Olympic team for participating in too many commercial events. The decision forced Tian out of the Beijing Olympics and also saw the sponsorships for the former “Sunshine Boy” fade into the twilight.

The next generation of sports stars is likely to be even savvier about marketing their achievements. Where Yao Ming’s parents refused to let him go to sports school because they felt he would not be able to make a living from his athleticism, parents like Ding Wenjun are now making enormous financial sacrifices to promote their children’s talent. Ding is the father of snooker player Ding Junhui, winner of the 2005 World Snooker China Open and the world’s Number 11 ranked player. Ding Wenjun, a former cigarette salesman, risked ruin by selling his family’s house to support his son’s career. The gamble paid off. Last year, the 21-year-old champion made 4.8 million RMB (almost $700,000) in ad and endorsement money--more than 500 times the award money Xu Haifeng received back in 1984.

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