Yingli's World Cup sponsorship belies financial condition

Want China Times, Staff Reporter 2014-06-21

Yingli Solar logos on pitchside digital billboards during the World Cup's
opening match, Brazil vs Croatia, June 12. (Internet photo)

Though China's national team has not qualified for the World Cup currently underway in Brazil, a number of Chinese firms are still enthusiastically splashing out to sponsor the tournament at great expense, notably Yingli Solar, the world's largest photovoltaic product supplier, a move which belies the company's financial problems, reflected in three consecutive years of red ink.

Yingli's sponsorship, which sees the company's name displayed pitchside at every match, has cost the company tens of millions of US dollars. Given the precarious state of solar power product manufacturers in China, the move undoubtedly represents a gamble for the company's chairman Miao Liansheng, known as a lover of basketball and soccer who has overseen the setup of two teams in his company.

Miao first forged ties with the World Cup in 2005, when the Fritz-Walter-Stadion in Kaislerslautern, a venue for the 2006 World Cup in Germany, gave the company free advertising in warm up games in return for the free resupply, via air transport, of photovoltaic products lost at sea due to a typhoon. In 2007, Yingli sponsored Osasuna in Spain's La Liga.

Yingli became an official sponsor for the next World Cup in South Africa in 2010, filling a vacancy left by an original sponsor which withdrew due to the global financial crisis.

Yingli spent 430 million yuan (US$70 million) to be a main sponsor of the 2014 World Cup in Brazil, according to Shanghai's China Business News. In addition to eight minutes of ad spots during each of the tournament's 64 games, Yingli has been allowed to erect 15 photovoltaic power-charging posts at media bases and commercial exhibition areas, among others, in addition to solar power systems at the Maracana Stadium in Rio de Janeiro and the Arena Pernambuco in Recife. The ad spots are in Chinese, highlighting the company's Chinese identity and aimed at boosting its domestic recognition.

The exposure associated with the sponsorship seems to have been reflected in Yingli's share price on the New York Stock Exchange, which had risen rom US$3.13 on June 13, when viewers in China saw the opening game of the tournament, to US$3.92 as of June 19, with the company's market value increasing by US$120 million to US$619 million.

Not all agree with the gamble, especially given that struggling solar companies in China have been given bailout packages. Critics have said the World Cup sponsorship may be improper for the company in view of its financial condition, suggesting it sponsor domestic sports tournaments or place large outdoor ads rather than go all out to sponsor one of the world's largest sporting events.