Dalian Wanda Group, one of the leading property companies in China, has agreed to pay €1.05 billion for Infront Sports & Media, a Swiss-based sports marketing company with major assets in China and other Asian countries. It has been owned since 2011 by Bridgepoint, a European private equity firm.
Infront is run by Philippe Blatter, the nephew of Sepp Blatter, the chairman of international football's governing organization, Fifa. The Zug-based agency boasts that it generated revenues of more than €800 million last year. The deal fits with Wanda's forays into sports and entertainment, which the company said would continue with at least two more acquisitions this year.
Wanda executives told Reuters that the group would acquire a stake of 68.2 percent in Infront, while the remainder is to be spread between three unidentified Chinese and global investors.
Infront has partnerships with such organizations as the International Ski Federation, Ironman endurance races, the Union Cycliste Internationale, the European handball and volleyball federations, several leading football leagues and teams – and Fifa. Infront sold media rights in Asia for the two latest football World Cups, held in South Africa and Brazil, and it has an exclusive agreement for the distribution of broadcasting rights in 26 Asian countries for Fifa events from 2015 until 2022, including the next two World Cups.
While it focuses on construction, Wanda has been investing in sports and other entertainment assets, as the Chinese property market has been impacted by economic pressure. Wanda has long been involved in Chinese football and last year it paid €45 million for a stake of 20 percent in Atlético Madrid, a Spanish football team. It was then said to be eying other assets in European football.
Wanda has also snapped up AMC Entertainment, a U.S. chain of movie theaters, and Sunseeker, a yacht manufacturer in the U.K. Furthermore, Wanda has been investing in Chinese theme parks and in a Chinese film complex in the coastal city of Qingdao. Wang Jianlin, Wanda's chairman, is described as China's second-richest man.
The Chinese connection is clear since Infront describes itself as the leading sports marketing organization in China. The company has a partnership with the Chinese basketball federation, representing interests of both the national team and the CBA league. In 2014 it also launched a series of amateur running races.
Infront's management team is to remain in place to lead an agreed long-term strategic plan until 2020. Wanda's chairman told reporters that the group wanted to take Infront public, although there isn't any timeline for such a flotation yet.
The acquisition comes a few months after the Chinese government alluded to potential initiatives to liberalize the organization of sports events and broadcasting rights. In the context of our research on the Chinese sports market, a top executive at Infront indicated that broadcasting rights made up only about 5 percent of the revenues for the CBA league, for example, due to the lack of competition (national broadcasting goes to the state-owned channel CCTV5). A more open market for Chinese sports broadcasting rights could have a very significant impact for companies like Infront and the sports business at large in China.
