Once upon a time, not long ago, two cities vied for the crown of Asia’s regional ‘sports industry hub’. No more.
One of those cities, Hong Kong, is undergoing a sports industry exodus. The other, Singapore, is the destination of choice for the exiles and has become the undisputed Asian hub.
Some of the biggest organisations in the regional business, including the NBA, IMG and Football Marketing Asia, are in the process of moving staff, including senior executives, from Hong Kong to Singapore. Companies recently looking for new Asia-Pacific bases, such as the CAA agency and Microsoft-backed sports tech initiative GSIC, have also chosen Singapore.
The assessment of industry insiders in Hong Kong is that it will be increasingly a base to service mainland China, and particularly the burgeoning Guangdong-Hong Kong-Macau Greater Bay Area. This is no small opportunity – the Greater Bay Area has a population of around 86 million and includes some of China’s most dynamic and growing cities, including Shenzhen. But it is a dramatic shift for a city whose sports industry once looked outward to numerous other markets.
One senior sports industry executive recently told me: “When I came here in the early 1990s, Hong Kong was the headquarters for virtually every business targeting Asia. Now, if you want to do business in Southeast Asia, you base yourself in Singapore. If you want to do business in China, you are based in Beijing or Shanghai. So Hong Kong has to some extent fallen between two stools.” He added: “Everyone knows what’s going to happen in the next 20, 30, 40 years.”
What’s going to happen is Hong Kong’s absorption by China and increasing integration into the mainland economy and polity. This has been an ongoing and turbulent process for several years, sparking civil unrest in 2019 and 2020. It raised doubts for Hong Kong-based businesses about what the future might hold, but many were long-established in the territory and appeared prepared to ride it out.
But Hong Kong’s tough response to the pandemic has proved the last straw for some sports businesses. The territory has mirrored the mainland response, pursuing a ‘zero-Covid’ strategy. Particularly onerous for the expat-heavy and travel-reliant sports industry have been the travel restrictions, including three-week hotel-room quarantines for arrivals and bleak quarantine centres for infected individuals.
Singapore’s sports industry is not unscathed by the pandemic. The city-state’s own relatively tough measures, and the downturn in business linked to the crisis, have led to the departure of a good number of foreign workers from the sports industry.
The Singaporean government has tightened rules on visas for overseas workers. This has made it harder for sports industry organisations to hire or keep foreign workers but should create more opportunities for local citizens.
Overall, Singapore’s standing in the sports industry has strengthened in the past couple of years. The local industry is supported by long-held, government-directed ambitions to be a leader in the regional business. The country’s vigorous sports agency, SportSG, has continued to court sports industry companies, start-ups and major events, to bolster its hub status. Events secured this year include one of the four new table tennis ‘Grand Smashes’. It also hosted the regional Suzuki Cup international football tournament in December, while the Formula 1 Grand Prix returns to the city’s streets in October after a two-year pandemic hiatus. A bid for the World Athletics Championships in 2025 has just been announced.
The idea of an ‘Asian hub’ for international businesses is something of an anachronism. It is well understood in the sports industry that it is virtually impossible to service Asia-Pacific’s vast and diverse markets from a single office. Today, the biggest sports organisations, and even smaller ones, have networks of offices or agents across the region, particularly to serve major markets like China, Japan and Korea. Regional offices in Singapore are often focused on Southeast Asia, rather than Asia-Pacific as a whole.
But you have to start somewhere, and many sports organisations are relatively small businesses in terms of manpower. So Hong Kong and Singapore have always been valuable jumping-off points. Both cities were business-friendly, low-tax, with world-class transport connections and infrastructure, and have tended to be accommodating for expats and their families, as well as offering growing local talent pools.
Hong Kong’s days as a base for international sports businesses are not entirely over. A number still have significant offices there, including the NBA, IMG and Football Marketing Asia, as well as sports marketing agency CSM, and European football clubs Juventus and Manchester United.
A Hong Kong-based executive told me: “It will remain a major financial centre where you can raise money outside of the Chinese system, and it will remain a great place to run an international sports marketing business…Hong Kong has been a city that has always evolved and found ways to survive. The Bay Area project is massive in terms of the industry and services that Hong Kong can provide..”
Singapore’s list of major sports organisations is now much longer than its northern counterpart. It includes agencies like CAA, FMA, IMG, Infront, Mailman, Mediapro, Octagon and Sportfive; leagues including the English Premier League, the Spanish LaLiga and the German Bundesliga; pan-regional broadcasters beIN Sports and SPOTV; football clubs including Paris St-Germain and Borussia Dortmund; and Singapore’s own ONE Championship, the Asian mixed martial arts promoter.
Many sports businesses still need an Asian hub. Singapore now stands alone as the location of choice.