Key points in due diligence on sporting event IP in China

Since the issuance by the State Council of the Several Opinions of the State Council on Accelerating the Development of the Sports Industry and Promoting Sports Consumption on 2 October 2014, the Chinese sports industry has become a new growth driver in the market, with relevant M&A cases and purchases of sports assets greatly increasing.

However, due to such reasons as the lack of clarity of the relevant legal nature of intellectual property in the sports industry, obstacles have arisen when investors wished to acquire sports companies or purchase sports industry related assets. This column highlights key points in due diligence for the acquisition of sports industry related companies and the purchase of sports industry related intellectual property in the light of practical experience.

Sporting event intellectual property. From the perspective of a sporting event promoter, so-called sporting event intellectual property generally includes venue advertising, competition broadcasting, sponsorship, licensing, media authorization, event logos, ticket revenues, sporting event merchandise and other such relevant rights. Accordingly, it can be seen that not all of the foregoing are covered by the concept of intellectual property as used in law. Then, how is one to understand “sporting event intellectual property”?

Zhang Qinghua is a partner and Shi Xiaonan is an associate at East & Concord Partners