Two Pandas called Sunshine and Sweetie arrived in Edinburgh on the evening of 4 December to start their 10 year stint at the city zoo after the UK clinched a deal to lease them following five years of political and diplomatic negotiation at the highest level. At the time the deal was struck Mr Liu Xiaoming, ambassador of China to the UK, said: “Pandas are a Chinese National Treasure. This historical agreement is a gift to the people of the UK from China.’
However, the gift isn’t entirely a gesture of goodwill from the Chinese; the deal includes the following:
- The zoo is paying around Â£650,000 a year for the Pandas on a 10-year lease.
- It is hoped the Pandas will breed but any offspring will belong to the Chinese, plus the zoo will have to pay more money to the Chinese for the privilege.
- The zoo has had to source Â£70,000 worth of bamboo a year to be imported from an organic grower in the Netherlands.
The zoo plans to make money on the deal through increased visitor numbers and merchandising. In the week preceding their arrival a website selling tickets to see the pair crashed due to the demand. The Chinese will be looking to make more money from the export of Panda-related merchandise to the UK with zoo gift shops already full of Panda teddies and clothing.
Sponsorship will also be an important means of funding the deal. A deal was struck with Fed-ex for the transport of the precious cargo. A Fed-ex plane brought the bears into Edinburgh airport and the crowds first glimpsed them peeping out through Fed-ex branded crates.
All elements of the deal and surrounding sponsorships will have required the drafting of tailored legal contracts, specific to this rather unique transaction, to govern the relationships between the various parties. It isn’t surprising that Ross Minett from animal charity OneKind said at the time the deal was struck: “This is a commercial deal: the animals may appear to be diplomatic gifts ‘¦ but in fact the zoo will pay a substantial fee for the lease of these animals.’
It would have been a fascinating deal to have worked on because of the nature of the transaction, but leasing pandas is essentially not unlike a lease of any asset. The parties will have had to consider carefully their respective liabilities in the agreements and the provisions which will govern any dispute, for example in the event that the zoo cannot keep up payments for the Pandas or if one of them were to die.
A lender will typically have looked for security in the lease agreement, often in the form of a charge over the borrower’s property. Fingers crossed the lawyers resisted giving the Chinese a legal charge over Scotland as security!