[1mm Financial Talk] Hana Financial, Why Target Chelsea Once Sponsored by 'Samsung'?

Aggressively Targeting East Asian Markets Beyond Europe
Already Expanded into Indonesia, Vietnam, China, etc.
Seeking 'Synergy' Fueled by EPL's Great Popularity

(London, Reuters = Yonhap News) On the 22nd of last month (local time), at Stamford Bridge in London, England, during the UEFA Champions League (UCL) Round of 16 first leg match between Chelsea (England) and Lille OSC (France), Christian Pulisic (right), who scored Chelsea's second goal, is being congratulated by his teammate Kai Havertz.

[Asia Economy Reporter Minwoo Lee] Hana Financial Group has entered the race to acquire Chelsea FC, a popular club in the English Premier League (EPL). This strategy is interpreted as expecting effects similar to when Samsung Electronics significantly increased its brand awareness and sales in Europe through sponsorship of Chelsea. Especially since the EPL is very popular in China and Southeast Asia, it is expected to greatly aid local market penetration.

According to the financial industry on the 21st, Hana Financial Group formed a consortium with British real estate developer Nick Candy and sports consulting firm C&P Sports to participate in the recent sale of Chelsea FC. Hana Financial Investment took the lead by submitting a letter of intent (LOI) for the acquisition. The price of Chelsea FC was reported to be 2 billion pounds (approximately 3.2 trillion KRW).

If the acquisition of Chelsea succeeds, it will be the first case of Korean capital investing in a top-tier global football league club. It is also an unprecedented challenge for Hana Financial Group. The group has shown affection for various sports industries, especially football. They employed Son Heung-min, who plays for Tottenham Hotspur, a top EPL club, as a model and have consistently maintained official sponsorships with the Korea Football Association (KFA) and the Korea Professional Football League (K League). Since 2020, they have owned and operated Daejeon Citizen, a K League 2 club. Nevertheless, this is the first investment on the scale of trillions of won.

It is interpreted as a joint effort by Vice Chairman Ham Young-joo, who has been appointed as the next chairman of the group, and Vice Chairman Lee Eun-hyung (CEO of Hana Financial Investment), who is in charge of the group’s global strategy. The acquisition of Chelsea is seen as a way to enhance brand awareness and provide advantages for the group’s affiliates to expand into Europe and Southeast Asia. Samsung Electronics, which sponsored Chelsea FC from 2005, greatly increased its brand awareness in Europe and saw a sharp rise in sales. After sponsorship, European sales more than doubled, and sales in the UK nearly tripled. By acquiring Chelsea, which won the UEFA Champions League, the largest pan-European tournament, last year, Hana Financial Group aims to achieve a similar upward effect.

In particular, it is expected to be a great help not only in Europe but also in targeting the Asian market. European professional football is the most popular sport in Southeast Asian countries such as Vietnam, Thailand, and Malaysia. It is known that there are tens of millions of European football fans in China as well. Among them, the EPL’s popularity is especially dominant. Before COVID-19, the EPL’s broadcasting rights fees contracted with Sky Sports, BT Sports, Amazon, and others (for three seasons starting from the 2019?2020 season) amounted to 5 billion pounds (approximately 7.9745 trillion KRW). This is about 1.75 times the broadcasting rights fees of La Liga, Spain’s top league, which was 3.4 billion euros (approximately 4.5515 trillion KRW) during the same period. This is the result of leveraging the advantage of the English language and advancing match times to actively target the Asian market. Ultimately, this acquisition aims to achieve marketing effects in China and Southeast Asia.

In fact, Hana Financial is actively targeting the Chinese and Southeast Asian markets. In June last year, Hana Bank partnered with the mobile messenger ‘LINE’ to launch the digital banking service ‘LINE Bank’ in Indonesia. In 2019, it invested 1.0148 trillion KRW in Vietnam’s largest bank, Vietnam Joint Stock Commercial Bank for Investment and Development (BIDV), becoming the second-largest shareholder and recently achieving an investment return of about 70%. In China, Hana opened branches in Jilin Province in 2008, establishing stores in all three northeastern provinces (Liaoning, Jilin, Heilongjiang). In 2010, it invested in Jilin Bank, the largest bank in Jilin Province, and has maintained a cooperative relationship since then.