China office opened by Bayern Munich for lucrative sponsorship deals

German soccer champions Bayern Munich have become the first foreign club to open an office in mainland China as they seek new sponsorship and merchandising deals in a nation where the sport is booming.

“It’s the right time to come to China,” the club’s chief executive, Karl-Heinz Rummenigge, said in an interview in Shanghai, where the office was officially opened on Wednesday. “We will come here constantly.”

Bayern, headed for a fifth straight German soccer championship, say they have 136 million fans in China, more than Germany’s entire population.

The club isn’t alone in targeting Asia’s soccer-loving public: rivals such as Manchester United and Barcelona have a presence in Hong Kong, where they’re looking to leverage their global popularity to secure sponsorships.

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Rummenigge, who cut the ribbons for the new office along side Shen Lei, secretary-general of the Shanghai Football Association, and Peter Rothen, Germany's consul-general in Shanghai, recalled his first interaction with Chinese fans five years ago, when about 5,000 people clad in Bayern's red-and-white colours serenaded the team in German on its arrival at the airport.

“I was very impressed,” Rummenigge said.

Global player

In recent years, China has emerged from being a relative backwater to one of the biggest players in the global soccer economy. Spurred by Chinese president Xi Jinping’s wish for the nation to become a soccer superpower, leading companies and some of China’s wealthiest individuals are ploughing billions into the sport, paying record fees to lure top talent to clubs, building training complexes and buying foreign teams.

Media rights for the domestic league and foreign competitions are now some of the richest in soccer.

Rummenigge, a former striker in Germany's national team, said the reason for focusing on China was twofold: to create an additional audience for existing sponsors, such as Adidas AG and Audi, while hunting for new local sponsors and helping the country develop its own stock of talented players.

China’s national team hasn’t qualified for the World Cup since 2006 and is 86th in Fifa’s rankings.

Spending vast sums on foreign imports has been one of the most-eye catching aspects of China’s soccer renaissance. Last year, Chinese Super League teams spent $451.3 million (€418 million) to import players, up from $168 million in 2015.

‘Exaggerated’ spending

Rummenigge described the spending as “completely exaggerated” and unlikely to help fuel President Xi’s dream of having a successful national team.

“I personally don’t believe what they are doing is the right way,” he said. “I believe they should invest much more in talent, instead of second-class or older stars. In the long term, the investment in talent in the youth will be more fruitful.”

Bayern plan to open a second soccer school in China later in the year, after the first one in the northeastern port city of Qingdao began operating earlier in 2017.

Counting Adidas, Audi and Allianz SE as backers at home, Bayern are also on the lookout for sponsorships in China.

“What we look for is long-term, sustainable and exclusive partnerships,” Rummenigge said.

The club has been selling merchandise, such as sportswear and mugs, on Tmall.com, a popular e-commerce site owned by Alibaba Group Holding, since May 2015.

Office outposts such as the one in Shanghai also serve as operational bases for increasingly regular tours to Asia. Bayern are playing two off-season games in China before moving on to Singapore, and there are also trips for the club’s women’s and youth teams planned.

– Bloomberg