International expansion is a goal for every major league in the United States. The NFL discusses European and Asian expansion often. The NBA is focusing on China and Southeast Asia when it talks about bringing more fans under its umbrella. MLB commissioner Rob Manfred discussed expansion into Mexico City and Montreal last week. Amid rumors of a potential sale, UFC president Dana White denied the company was for purchase, but then spoke about international expansion into Asian markets. The thing about international expansion is that it works both ways, and Chinese investors are aiming to expand their global influence, especially the Dalian Wanda Group.
Wang Jianlin, the richest man in China worth about $35 billion, owns the Dalian Wanda Group (DWG), and it has been snatching up sports and entertainment assets at a breathtaking rate. DWG bought a 20 percent stake in Atletico Madrid for $48 million in 2015. Not happy with that alone, DWG continued its expansion in buying InFront Sports & Media for $1.2 billion. InFront, a sports marketing company that specializes in distribution of media rights, sponsorship, media production and event operation, then purchased a majority stake in Omnigon, a company that specializes in providing digital and technology consulting for the sports and entertainment world. DWG essentially has ownership rights in every point of the sports ecosystem. Somewhere in between all the purchasing of sports properties, DWG also purchased the movie studio Legendary Entertainment.
DWG is not the only Chinese influence in sports. The Chinese SuperLeague is outbidding other major leagues for talent. Chinese investors are a major part of David Beckham’s MLS ownership pitch. Simply put, China and Chinese investors are expanding internationally outside of their market faster than the leagues that want to get a foothold in China are doing now.
That’s why the news of a UFC bid makes sense. This could be the first foray of Chinese ownership in an existing league. Teams are an investment with a limited return. Leagues — especially one structured like UFC — can create an even greater return. It also legitimizes Dalian Wanda Group as an even more major player in the sports business world than it already is now.
The major leagues in the U.S. don’t have to worry. No one is coming in and buying the NBA, NHL, NFL or MLB. But, if they want to truly expand overseas into the Asian markets, their best partner could be DWG. That would give Wang Jianlin more influence in the sports world than he already has acquired. U.S. major sports leagues can focus on expanding their influence in foreign markets. Wang Jianlin and Dalian Wanda Group are already there.
Michael Colangelo is Managing Editor of The Fields of Green and Assistant Director at the USC Sports Business Institute.