China’s billionaires take to football
Businesses, eager to please the government, rush to sign players and coaches, invest in clubs and buy out sports-media businesses in light of President Jinping’s ambition to host a World Cup — and win one by 2050
ulk had quite the welcome to China. Shortly after his plane landed at Shanghai’s Pudong International Airport, hundreds of chanting fans mobbed the Brazilian football star as he pushed his way through the crowd on June 29.
Hulk, who recently inked a recordbreaking deal with Shanghai SIPG, is just the most recent football star to sign up.
Long a football backwater, China has gone on a buying spree unprecedented in the history of the game. Chinese money, of course, has been flowing into all sorts of sectors: technology, health care, retailing, you name it.
And now it’s football, a move that follows Middle Eastern and Russian investments into the game.
What differentiates China is the speed and scale of the country’s newfound appetite for all things football. Chinese companies have invested $1.7 billion in sports assets — the vast majority football-related — since the beginning of 2015, according to Bloomberg data. As recently as five years ago, that number was zero.
“It’s insane,” said Brazil-based sports lawyer Marcos Motta, who’s worked on several player trades to China. “I have never seen anything like this before.”
Led by some of the country’s richest men, including Dalian Wanda Group Co founder Wang Jianlin and Alibaba Group Holding Ltd’s Jack Ma, Chinese businesses are at the table for almost every football asset up for sale. In recent months, a dizzying array of deals have roiled the industry — from signing football players and coaches to Chinese investments in storied clubs and buyouts of sports-media businesses.
Next year the Milan derby, one of European football’s most-prestigious games, will feature two teams recently purchased by the Chinese, assuming both deals conclude without a snag. Nanjing-based Suning Holding Group Co in June paid €270 million (Dh1.09 billion, $298 million) for a 70 per cent stake in 18-time Italian champion Inter Milan, while a separate consortium is nearing an agreement to acquire 80 per cent of AC Milan, a seven-time European champion, from former Italian Prime Minister Silvio Berlusconi.
“There will be more acquisitions and of very famous teams,” said Feng Tao, CEO of Shankai Sports, a Beijing-based consultant that has advised on deals, including Wanda’s $1.2 billion purchase of Swiss-based sports-marketing company Infront Sports & Media AG. Most striking of all, though, has been the sudden rush by teams to pay huge sums on importing talent. Chinese Super League clubs outspent those from any other country this past winter, spending a combined $280 million for European football stars. And Shanghai SIPG, a team owned by the Shanghai International Port Group, just broke the Chinese record again with its trade to acquire Givanildo Vieira de Sousa, popularly known as Hulk, for $61 million.
New faces
Hulk’s first game for the Shanghai club was short, but eventful. He scored after nine minutes before leaving the field on a stretcher 12 minutes later. Still, Chinese fans are likely to see more new faces like his, as agreements with football’s top agents pave the way.
Alibaba’s sports unit has a partnership with Cristiano Ronaldo’s manager Jorge Mendes.
The dollars doled out to China-bound players and coaches are infinitely greater than they could command elsewhere, according to Motta. It’s common for top imports to get 7 million or €8 million, more than five times what players of a similar standard would get in Europe, he said.
Chinese President Xi Jinping, an avid football fan, is fuelling the spending spree. He’s eager for China to improve its global football standing: The national team is ranked 81st, just after Jordan and before Bolivia.
And he covets hosting a World Cup — and winning it by 2050. That’s providing the green light for Chinese businesses, eager to please the government, to open their wallets.
Coinciding with Xi’s zeal for the game is an effort on the part of the government to promote sports and exercise to the new urban working class, recently transplanted from farms. A national plan announced last year contains the audacious goal of spurring an industry worth 5 trillion-yuan ($747 billion) by 2025, when 50,000 schools are expected to offer specialised football training.
The Chinese are spreading out all over Europe with open cheque books. On a visit to the UK in October 2015, Xi, accompanied by Prime Minister David Cameron, visited Manchester City. He posed for a selfie with Cameron and City’s star Argentine striker, Sergio Aguero.
Two months later City Football Group, which owns the team, announced a $400 million investment from China Media Capital for a 13 per cent stake.
That same month, a unit of Alibaba paid an undisclosed amount, believed to be in the tens of millions of dollars, to become title sponsor of football governing body Fifa’s annual Club World Cup. In March, Wanda signed a $150 million agreement to become Fifa’s first Chinese sponsor.
The two companies are the only new sponsors to engage with Fifa since the US Department of Justice unveiled an industry-rocking indictment that accused several senior Fifa officials of “rampant corruption” dating back more than two decades.
Wanda has also bought a minority stake in Atletico Madrid, last season’s Champions League finalist. That deal was followed by a slew of Chinese companies investing in European clubs to buy football expertise China doesn’t have and to help develop young players.
Buyers are popping up in every corner of the country’s business elite, from the owner of a monosodium glutamate company buying England’s Aston Villa to a consortium led by hotel entrepreneur Chien Lee taking control of France’s OGC Nice.
For Nice co-owner Lee, the club’s training academy, which has nurtured players including French national team captain Hugo Lloris, is a model to export to the mainland.
“I see this as a big opportunity. Our plan is to bring the Nice academy to China, to open a training Centre in China.”