029-8146392

Analyzing sports revenue

I'm considering the default sports rights in the PP Sports context. The leagues had lower central distributions and sponsors relied on state-owned enterprises. Ticketing improved with fans returning for the 2023-24 season, but the share is still small. Many clubs adopted a "rational spending policy" with salary caps, like CSL's foreign player salary cap at 3 million euros. For example, Shandong Taishan could have revenues around 200-400 million RMB. I can't leave out sponsorship and broadcasting, which play important roles in this!Evaluating financial scenarios

I’m looking at cost breakdowns like wages, operations, youth development, travel, and amortization, estimating total expenditure at around 300-500 million RMB. It’s common to see a net loss here. If I compare current spending with costs of all-Chinese players versus foreign ones, there could be significant reductions in wage bills. However, this might drop attendance and sponsorship, making revenue problematic.

I need to suggest practical steps, like investing in academies and branding, while ensuring my estimates are clear and not misleading. I’ll also address the user’s query about Shandong Taishan and profitability without foreign players.Creating a financial model

I’m thinking of adding a simple math model with variables R for revenue and C for costs. While the user didn't ask a direct question, I feel they’re after an analysis. I want to conclude that just removing foreign players won’t guarantee profitability; while cost savings are possible, revenue drops could counterbalance this, depending on the overall league product.

It's also worth noting that transitioning to an all-Chinese team could impact ACL spots and prize money. For example, Shandong's revenue with foreign players might be 350 million RMB against 500 million in costs, leading to a loss of 150 million. If we remove foreigners, let’s say costs drop by 120 million but revenue declines by about 60-120 million. This could still leave the club at a loss or showing minor profit if they're already efficient. I could include a sensitivity table for various revenue drop scenarios, along with assumptions to clarify.