MasterCard Gains Wukesong Rights - Analyst Blog

In an effort to expand its international business, MasterCard Inc. (MA) has obtained the naming rights of Wukesong Arena in Beijing for a five-year period. Though the financial terms of the deal were not disclosed, it was decided that the arena will be re-named the MasterCard Center or Wanshida Zhongxin in China.

The Wukesong arena, which has a capacity of 18,000 seats, will become the first 2008 Olympic Games venue in China's sports and entertainment industry to be re-branded commercially. In addition, Bloomage International Investment Group will act as the owner of the Wukesong arena, and Aegon NV (AEG) and the U.S. National Basketball Association (NBA) as consultants to run the arena.

The renaming will become official on January 21, and will combine the local ownership and know-how with the international event management expertise and sponsorship, in order to bring the world's best performers to Beijing.

The popular Cantonese pop singer Jacky Cheung is scheduled to perform at the launch of MasterCard Center, along with other renowned artists including the American rock band the Eagles and Hong Kong singer Aaron Kwok. Additionally, the Wukesong arena will host sports events like NBA basketball, table tennis, badminton and others.

MasterCard already derives nearly 60% of its revenue from overseas, and remains on track tapping the growth opportunities through expanding its operations globally. In September 2010, MasterCard entered into an agreement with China UnionPay, the state-owned company, which has the monopoly on issuing credit cards in the country, for exploring business opportunities together. China UnionPay already issues dual-currency cards with both its own logo and MasterCard's, which are designed to enable the Chinese consumers to use their credit cards overseas.

MasterCard has taken several initiatives globally including travel deals like privileged fares for tickets to over 120 Lufthansa destinations in Europe, support for up-and-coming fashion designers as sponsor to the Singapore fashion festival, and the region-wide ‘Purchase with Purpose' fund-raising program for good causes. Likewise, the MasterCard Center deal is expected to create public awareness of its brand and services in China.

Besides, the MasterCard Center is expected to demonstrate MasterCard's long-term commitment to China, while helping to ensure the legacy of the Olympic Games. It leverages local resources for the benefit of consumers and stakeholders, including the local community in Beijing and the local government. MasterCard is in line with the government's objective of maintaining economic growth through increased domestic consumption.

 
AEGON N V (AEG): Free Stock Analysis Report
 
MASTERCARD INC (MA): Free Stock Analysis Report
 
Zacks Investment Research