China Media & Entertainment Law Report : China Media Lawyer & Attorney : Reed Smith Law Firm : Entertainment, Sports & Consumer Rights Law

Chinese football has long been plagued by allegations of official impropriety and corruption. Last year saw numerous top football officials in China, including former Chinese Football Association heads Xie Yalong and Nan Yong, arrested under suspicion of taking bribes and fixing matches. Xie Yalong, who served as Chief of the Chinese Football Association between 2005 and 2009, was taken into custody for questioning in September 2010 with regard to his alleged corruption. Xie was appointed to repair the public image of Chinese football and clean up illicit practices in the national league, but he failed to fulfill this goal. His successor Nan Yong was given the same task, but after just one year he too was arrested on bribe-taking and match-fixing charges. Sentencing for Nan Yong, who may face the death penalty for his crimes, and Xie Yalong is expected soon.

In spite of the game’s tarnished image, sports betting in China remains extremely popular, with 90% of all wagers on competitions involving football matches. The China Sports Lottery is the only legal form of sports betting in the country. The lottery is quite popular and rakes in huge annual profits, which are to be set aside for the development of public sporting facilities.

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In August 2008, Chinese state broadcaster CCTV announced its May 2009 joint venture with global sports management company IMG Worldwide. CCTV brings a viewership of 850 million to the JV, while IMG Worldwide brings significant industry experience, including management of international sports stars such as Tiger Woods, and organization of approximately 4,500 sporting events per annum worldwide, including Wimbledon. Reports indicate that Jiang Heping, the head of CCTV’s sports channel, which claims 85% of China’s domestic sports TV market, was appointed Chairman of the JV’s Board of Directors. The first event managed by the JV will be October’s China Open, a global elite women’s tennis championship. CCTV-IMG expects to invest significant media resources in the China Open in the hopes of establishing it as one of the top global competitions. IMG said its financial investment in the 20-year joint venture was not substantial.

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According to the Chinese Basketball Association (“CBA”), questionable activities by basketball agents revealed limitations of the current agency system necessitating a revision of the regulations guiding agency activities. In the 2006 “Administrative Measures from the CBA on Basketball Agency” (“Measures”), the CBA defines a basketball agent as an individual or legal person holding a basketball agent license involved in basketball agency, including intermediation, commission agency, entrustment and/or other for-profit promotional activities.

The 2006 Measures established guidelines for broker eligibility and the two types of agents. Category A agents may manage foreign players, commercial entrustments or commercial promotion related to foreign players, manage Chinese National Basketball Team players and their commercial entrustments or commercial promotion, the commercial entrustment or commercial promotion of matches held by the International Basketball Federation, Asian Basketball Federation or CBA, and other basketball brokerage activities. Category B agents are prohibited from all activities except for basketball brokerage.

Current agent-related issues in the CBA range from uncertainty surrounding players’ legal representation due to frequent ‘agent-swapping’ to publicized failures of clubs to fulfill contractual obligations and an overall lack of transparency surrounding agent activities in the league. In response to these issues, the CBA has drafted the “Supplementary Regulations on the Administration of Measures for Basketball Agents in the Chinese Basketball Association,” which areintended to supplement the 2006 Measures. The CBA also has issued a circular to basketball clubs and agents that included a “Survey on Basketball Agent Activities,” which requests people to submit their general opinions on agents, the relationship between agents and players, and suggestions on ways to improve the current system.

The 2009 supplementary regulations established minimum qualifications for basketball agents, their rights and obligations, limitations on agent activities, and repercussions for violations of the regulations.

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