CITIC Securities: Sports and Tourism Dual Powerhouse, Event Economy at Its Peak

China Securities Construction Investment Research Report states that the 14th Five-Year Plan emphasizes the strategic development of a strong sports nation and a strong tourism nation (for the first time). Sports, culture, and tourism are naturally interconnected. With the promotion of sports-related policies and the diversification of residents’ sports and entertainment activities, the foundation for the development of the sports event economy is gradually being established. It is expected to become an important driver for domestic consumption and enriching residents’ spiritual and cultural lives. Drawing on the highly successful commercialization experience of F1 racing, participants in the sports industry are expected to gradually move toward professional operation, industry chain collaboration, and the realization of commercial value.

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CITIC Construction Investment: Building a Strong Sports and Tourism Nation, The Time for Event Economy Has Arrived

The 14th Five-Year Plan emphasizes the strategic development of a strong sports nation and a strong tourism nation for the first time. In recent years, the social externalities of popular sports events such as the Scottish Premier League, the Winter Olympics, and F1 have been evident. Through new economic models like event economy, ticket economy, and debut economy, economic vitality has been stimulated, and the feasibility of promoting consumption cycles has been repeatedly validated. The sports industry is expected to become a leading sector in modern services.

The success of F1 commercialization stems from global strategic layout and innovative marketing

After Liberty Media acquired F1, the focus was on expanding potential audiences in China and the U.S., increasing the global race locations, and rapidly expanding the young and female demographics through social media DTC and film/TV IP licensing. The expanding influence of races has driven the growth of commercial value.

The commercial potential of race events is substantial, driven by three leverage points

The increase in race sessions and audience numbers continuously boosts average revenue; fan engagement and multi-industry collaborations enhance the value of broadcast rights and cultural derivatives; deep partnerships with racing teams and the industry chain create value, with commercial sponsorships and supporting services increasing profitability. These factors make F1 a highly profitable venture.

Investment Advice: We believe that as China continues to lead in the automotive and new energy vehicle sectors, its influence in competitive racing will also strengthen. Many mature foreign races have cultivated a large potential customer base domestically. The domestic race economy is expected to experience rapid growth, so investors should actively monitor listed companies related to the sports industry chain.

(Source: First Financial)