It seemed too ridiculous to be true – a group of unnamed Chinese investors were ready to shell out 3.5 billion euros just for a minority stake in Manchester United. Since further news has been non-existent, someone was probably taking a flier.
Why China’s billionaires may be ready to make great leap into English Premier League
With Espanyol the latest foray into European football for the mainland's rich, surely it's only a matter of time for a Jack Ma or similar to make a move into England
But it’s even harder to believe that some of the 319 US dollar billionaires on Forbes magazine’s China Rich List are not currently plotting a Premier League move.
Last week saw Rastar, a Chinese firm hitherto unknown to anyone not blessed with in-depth knowledge of the toy car industry, purchase up to 56 per cent of Espanyol, one of Spain’s oldest – if painfully unsuccessful – clubs for up to 17.8 million euros. It follows the takeover this year by Ledus, an LED lightbulb manufacturer, of French second division side Sochaux, historically the Peugeot factory team. Like Rastar, their Hong Kong entity will hold the football stake – you may, like me, have double-taked recently on seeing a bus drive by with an advert acclaiming this momentous deal.
The cynical might ask what toy car and lightbulb companies know about Spanish and French football, and question motives, but it seems likely we’ll be seeing more and more Chinese moves into European football. EPL clubs are protected by the obscene amounts of TV cash they receive but that also makes them attractive targets.
The Espanyol deal is the most high-profile deal since January’s purchase of 20 per cent of Atletico Madrid by Wang Jianlin (No.1 on that Forbes list, with US$30 billion, stats fans).
With net debt of 134 million euros, “we couldn’t let this train go by”, former president Daniel Sanchez Llibre told El Pais, while Rastar chairman Chen Yansheng (No 254 with a paltry US$1.2billion) told Barcelona paper Sport: “Champions League? The beauty of football is that anything can happen.”
Elsewhere, ADO Den Haag have been bought by United Vansen, a Beijing sports marketing firm, annoying some in the Dutch capital by plonking former China national team coach Gao Hongbo on the bench as assistant coach.
And CEFC China Energy recently took over the storied Slavia Prague, one of a spate of deals they have made in the Czech Republic. According to the firm’s website, chairman Ye Jianming is an ‘economic adviser’ to Czech president Milos Zeman, the only western leader who attended Xi Jinping’s ‘70th anniversary of the glorious crushing of Japan in WW2’ parade.
In broadcasting, electrical appliance manufacturer Suning bought Chinese TV rights to La Liga in August; Beijing firm Ti’ao Dongli has paid 8 billion yuan for five years of Chinese Super League rights, more than 26 times as much per season as the 60 million yuan paid for 2015.
Are these companies all merely following Wanda’s Wang? When No.1 decides football’s the place to be, perhaps it’s foolish not to follow.
Rastar say on their website they want to “construct interactive entertainment industrial ecosphere”, which maybe made sense in Chinese. Ledus say Sochaux can help them “tap the European market”. United Vansen are at least a sports-related firm. And CEFC appear determined to be China’s Czech stronghold as part of the Silk Road 2.0 etc.
President Xi’s love for the game is usually mentioned as kickstarting the billionaires’ hitherto unnoticed enthusiasm. Not often mentioned is a State Council document from October last year, ‘Opinions on Accelerating the Development of Sports Industry and Promoting Sports Consumption’.
Among its forecasts – often little distinguishable from direct orders in China – is that the country’s sports industry will be worth 5 trillion yuan by 2025, 15 times its present value.
Free market reforms to state-run sports industries are mentioned, and tax breaks for sports-related companies. For a billionaire looking long-term, a piece of that pie (paying 17 per cent less tax than say, a toy car company) looks tasty.
And it’s not just abroad that Chinese firms are keen on football, as seen on Friday with the announcement that Guangzhou Evergrande were to become the first stock exchange listed club in Asia. The club apparently loses 500 million yuan a year, but perhaps owners Hui Kai-yan (Forbes’ No 8, US$8.7billion) and Jack Ma Yun (No 2, US$21.8billion) see the PR and guanxi benefits as a small price to pay.
Which brings us back to England. Ma, the most recognisable face of China mega-richdom, again was front and centre in photos at the Guangzhou announcement. With the likes of Sochaux and Slavia Prague not household names, could the not-publicity-shy Alibaba chief be the man to make the great leap forward into the Premier League for China?
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