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LAST WORD: China, Football and Business, What’s Going On?
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China, Football and Business

What's Going On?

BY Mike Cormack

BT 201610 240 04 Last word teixeira schal china 0The football off-season, after Euro 2016 and before the start of 2016-17 calendar is always exciting with transfers, appointments and resignations sustaining the interest and newspaper back pages before the actual football matches resume. But for those with an interest in China and soccer, this summer has been unusually interesting.

China has been getting into European football in a big way. We have started to become accustomed to big-money transfers to the Chinese Super League with big-name managers and players arriving first in a trickle but now in a flood. These once tended to be professionals on the downward slope of the career, such as Nicholas Anelka or Paul ("€œGazza"€) Gascoigne, avowing their excitement at building the game in the world's most populous country and more often just seeking one final big payday. But now we are seeing Chinese businesses take over top-level football teams wholesale in a way that suggests a concerted strategy and elite players are now coming to play in the Chinese league at the peak of their career. So what is going on?

BT 201610 240 02 Last word teixeira schal china 0Football is of course big business and has been since 1992, when the UEFA Champions League was inaugurated and a mid-week European league sold around the world. Many clubs turned from sporting associations to PLCs. Since then income and spending have boomed: the world record transfer has risen on average by 37% every year or 19.5% adjusted for inflation - from 1110,000,000 in 1992 (for Jean-Pierre Papin from Marseilles to AC Milan) to 1189,000,000 in 2016 (for Paul Pogba from Juventus to Manchester United). Financial clout has until now been restricted to major European teams who have the ticket sales, TV money, sponsorship and commercial revenue (sales of replica kits, etc). Real Madrid, for example, is the world's richest team with turnover of 12577m (11439m) in 2014/15.

But this seems to have changed, as the Chinese league has invested major cash on players in their prime. Shanghai SIPG splurged 1146million on Brazilian striker Hulk, making him the third highest paid player in the world (behind only Messi and Ronaldo), at 11340,000 a week. Jiangsu Suning signed Alex Teixeira for 1138million move and added Chelsea's Ramires at 1125million. Shandong Luneng spent 1113million on Southampton's Graziano Pelle (he's now the world's fifth highest paid player) and Guangzhou Evergrande splashed 1135m to prise Jackson Martinez from Athletico Madrid. This is serious investment and unlike players lured to Qatar or the US Major League they are all in their prime, all being international and having been starring for their former teams.

Where is all the money coming from? Most teams have heavyweight corporate backing. Nanjing's Jiangsu Suning is, not surprisingly, owned by Suning Appliance Group, Guangzhou Evergrande is fully titled Guangzhou Evergrande Taobao, reflecting the two owners, Evergrande Real Estate Group and Alibaba Group and Shanghai SIPG is a shortening of Shanghai International Port Group Football Club in deference to their owners. Also, the value of TV rights for the Super League is increasing exponentially. Media tycoon Li Ruigang raised many an eyebrow when he paid eight billion RMB (US$1.3bn) for five year's coverage of the Chinese league, but online video company LeEco announced in February it had paid Li RMB2.7bn for just the first two years.

hl01Investment by local industry is nothing unusual in football, of course, and rich proprietors are also common with Chelsea's Roman Abramovich being perhaps the modern game's foremost oligarch. What is unusual is to see such investment being distributed across so many teams at the same time. But this is only one pincer in the Chinese effort.

BT 201610 240 03 Last word teixeira schal china 0Numerous European clubs are being bought by Chinese businessmen. Chinese investors have bought both AC Milan and Inter Milan. In the English league, Aston Villa, Wolverhampton and West Bromwich Albion have all been bought by Chinese investors whether individually (Villa's Tony Xia) or by an investment group or business (as with international conglomerate Fosun International buying Wolves). In France, electrical components manufacturer Tech Pro bought FC Sochaux while a Chinese/US consortium bought OGC Nice. In Spain, probably the world's best league, Espanyol sold a 56% stake to auto manufacturer Rastar Group while Chinese firm Link International Sports bought Granada CF.

So many acquisitions show that China really means business in football. Interestingly, none are buying at the top of the market. Only one of the English teams is in the top division and while the Milanese teams are big names, Italian football is the poor relation of the Big 5 European leagues with aging stadia and moribund attendances. This may just reflect a dipping of a toe in the water of foreign football ownership.

After all, many would-be proprietors have been exhausted by the insatiable demands of the game - even billionaire Randy Lerner found Aston Villa too much for him - just as companies making international acquisitions do best when they start small. But the ambition is clear. China wants to do football, do it big and do it well. It wants the Super League to attract the best players and for this to improve the standard of domestic players for the international team. And why not? If China can top the Olympic league table in 2008, it can compete in football. South Korea got to the World Cup semi-final in 2002. Who would bet against China one day winning it?

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