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Wanda and Infront’s interests align in long-term IAAF media, marketing deal

Noah Lyles of USA competes and wins the Men's 200m Final during the IAAF Diamond League Memorial Van Damme at King Baudouin Stadium on September 06, 2019 in Brussels, Belgium. (Photo by Dean Mouhtaropoulos/Getty Images)

  • 10-year contract worth a total of at least $115m
  • Wanda’s interest in Chinese athletics growth key
  • Private negotiations, timing raise questions

Wanda Sports’ mass participation drive and its subsidiary Infront’s push for summer sports were the basis for their decision to push into athletics through a record 10-year agreement with the International Association of Athletics Federation, from 2020.

The agreement includes IAAF Diamond League international media rights, from 2025 to 2029; international rights to a ‘second international tour’, from 2020 to 2029; and title sponsorship of the Diamond League over the same 10-year period.

The IAAF has separated the media-rights agreement and title sponsorship into two contracts, with Infront and Chinese conglomerate Wanda respectively. Wanda’s deal for the title sponsorship includes a commitment to organise an annual Diamond League and annual IAAF meeting in China, the rights for Wanda to host the IAAF Gala in China, and cooperation in developing youth athletics in the country.

The two contracts together will guarantee the IAAF a total of $115m (€103.1m) over the course of the deal. Infront will pay a minimum guarantee of about $75m in total for the international media rights to the Diamond League – for five-years – and the secondary international tour – for 10 years. Revenues will be split 50:50 above the minimum guarantee. Experts believe the overwhelming majority of media value lies in the Diamond League rights, and the deal is heavily backloaded beyond 2025.

Wanda will pay about $4m per year for the title sponsorship, totalling $40m over the duration of the deal.

The media rights for the Diamond League are sold by Diamond League AG – a joint venture between the IAAF and the meeting organisers. The Diamond League pools international rights to each meeting as each local meeting organiser sells its domestic media rights.

The deal with Infront comes only a year after the Diamond League renewed its international media rights agreement with the IMG agency for a further five years, from 2020 to 2024. IMG is set to pay a guarantee of $12m per year, plus a share of revenues above that figure. IMG has sold Diamond League international media rights since the competition’s inception in 2010. It paid a minimum guarantee of about $7m per year in its previous deal from 2010 to 2014, and guarantees $10m per year in its current deal, from 2015 to 2019.

Wanda/Infront ambition

Infront dominates the winter sports market with a host of high-profile global rights deals alongside a significant football-rights portfolio. The agency’s move for the Diamond League is thought to be the start of a push into outdoor summer sports rights.

It split its football and summer sports unit into two in December 2017, hiring the European Broadcasting Union’s former head of summer sports rights, Julien Ternisien, to lead the latter unit from May 2018.

The summer sports push from Infront uncoincidentally comes at the same time as Wanda Sports continues its own drive in its mass participation business. Ahead of its initial public offering this year, Wanda Sports filed a prospectus which stated its intent to increase its revenues from a growing mass participation market in China.

For this reason, the partnership with the IAAF to promote athletics in China, along with several new meetings in the country, was key to Wanda’s move to take on both title sponsorship and media-rights agreements.

SportBusiness Media understands the IAAF had similar discussions about developing athletics in China with the sports division of Chinese conglomerate Alibaba several years ago, but the talks never progressed.

For the IAAF, securing a title sponsor was extremely important as it had struggled to do so for many years. The IAAF contributes about $4.2m to the Diamond League for prize money, grants and promotional activity, and in return takes the ability to sell the title and timing sponsorship rights to the Diamond League.

The Diamond League has been without a title sponsor since 2013. From 2010 to 2012, electronics company Samsung paid about $4.5m per year for the rights.

Negotiation questions

The IAAF and Wanda/Infront held exclusive private negotiations, with the latter thought to have told the federation that this deal would not remain on the table if it spoke with any other party.

It is thought that the Diamond League council, which consisted of members from the Oslo, Zurich and Shanghai meetings, was presented the offer by the IAAF, and given a week to decide whether to accept it.

The process has been questioned by industry sources, with several wondering whether an open tender would have produced a better result for the federation. The IAAF did not give IMG a chance to extend its relationship, while only achieving an increase in the minimum guarantee of about 25 per cent.

This does however follow a pattern, as IMG has itself always completed its Diamond League renewals in private negotiations.

Potential confusion

It is the timing of the agreement and announcement that has potential to cause issues for IMG.

At present, IMG will distribute, and in many cases has already distributed, Diamond League rights to broadcasters from 2020 to 2024. However, before that agreement even begins, it will be possible for Infront to distribute the same set of rights to a different broadcaster from 2025. This will affect both agencies, but it is thought that IMG could suffer the most, as broadcasters that have just agreed five-year terms will be worried that they will lose out from 2025 before coverage has even begun.

Infront will also be distributing rights to a yet-to-be launched second international tour from 2020, which has led to some apprehension over potential broadcaster confusion. As one source told SportBusiness Media: “The Diamond League already struggles with a complex system and this could make it worse.”

Despite questions over the actual makeup of the second tour – there has been no communication yet from the IAAF – it is thought that Infront are fully aware of the IAAF’s plans and that an announcement will be forthcoming before the new year.

From 2025, both the Diamond League and the second tour will both be distributed by Infront and it is hoped that this will allay these concerns. Before then it is extremely unlikely that IMG and Infront would want to work together to combine them into a single package.

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