The Chinese flirtation with European football is over

AS the old adage tells us, if something looks too good to be true, it usually is, or words to that effect. China’s appetite for European football clubs and players seems to have dissolved, a fleeting moment in time when money from the world’s second biggest economy seemed to signal a shift in the balance of power. Chinese business people, corporates and their football clubs threatened to change the face of football, but the macro-economic situation, government priorities and, more recently, covid-19 has put paid to their ambitions. 

The latest symptom of change came when Gao Jisheng sold his stake in Southampton to Serbian media mogul Dragan Salak for £ 100 million. Anyone who assumed Jisheng was looking to make a killing by treating Southampton as a “pig to be fattened”, was wrong. He made a £ 110 million loss on his original investment.

After the flurry of activity that saw clubs like West Bromwich Albion, Reading, Aston Villa, Atlético Madrid, AC Milan, Slavia Prague and others either purchased or invested in by Chinese individuals or companies, the flame has clearly gone out. The only Premier League side with Chinese backing is Wolverhampton Wanderers, who are owned by Fosun, a multi-tentacled company that also has strong links with super agent Jorge Mendes.

China’s government was keen to encourage investment abroad, mostly because the country had designs on becoming a major football power. The country’s prime minister, Xi Jinping, is a big football fan and would dearly love China to not only host the World Cup, but also win the competition. However, the national team is way behind many of their Asian rivals and since China discovered their football aspirations, they have yet to qualify for the World Cup. Their only appearance was in 2002 when they lost all three group games and failed to score a goal.

So the investments made by China at home and abroad have yet to yield dividends and the government is feeling a little short-changed. With China’s economic growth slowing – GDP looks set to rise by 5% in 2022 – people are wondering if the money spent abroad might be better used at home. The Communist Party, for example, wants investors to pull out of European football, and government officials is now calling for the focus to be on developing local talent.

In 2017, there were 20 Chinese-owned clubs across Europe, now there are just 10. Owners such as Wang Jianlin (Atlético Madrid) and Ye Jianming (Slavia Prague) were encouraged to sell their holdings. No surprirse given China’s 14th five-year plan proposes money from outward investment should return home.

Naturally, the economic situation has affected the Chinese Super League (CSL). Many clubs are in financial trouble and 12 of the 16 clubs who took part in 2020-21 have fallen behind with players’ wages and most have serious cashflow problems due to a lack of liquidity and a reluctance to lend from the banking sector. One of the most influential corporates in the CSL, Evergrande, has recently been on the brink and has only pulled clear of danger because of a debt relief deal.

Inter Milan’s owners, Suning, had huge debt problems, and closed down their club Jiangsu, but according to the company, the crisis has now subsided due to help from the government. They have to pay £ 157 million to the Premier league over a legal case related to TV rights. Suning, who own PPTV, agreed a three-year deal with the Premier, but they failed to pay the first two instalments of their agreement. The deal was subsequently cancelled and settled in court.

Players were attracted to the CSL because of the obscene wages. Brazilian midfielder Oscar, left Chelsea at the age of 25 to join Shanghai SIPG, reputed to be earning £ 400,000 oper week. The move, which earned Chelsea £ 50 million, was something of a shock because Oscar was in his prime. He is now looking to return to Europe, possibly Barcelona. Other players saw China as a cash cow or a pension fund deal.

The CSL has had two seasons of empty seasons, but before the pandemic, attendances had risen to just under 25,000 – it is likely that momentum will be lost and they will have to work to build its football back to pre-crisis levels. For the time being, European clubs will no longer be able to look to China for a convenient takeover. The country is still in love with the game, but they now realise how difficult it is to buy credibility. They will be back, that is almost a certainty.

The Asian dream may remain elusive for Europe’s corporate clubs

AS Europe’s international teams close in on the final stages of the 2020 European Championship, the shadow of the European Super League mutiny refuses to disperse. 

The contribution to Europe’s football strength is underlined in the surviving squads in the competition – 48 players are from the ESL dozen, including 14 from England and one less from Spain. These players are part of the reason why the project was aimed not just at Europe but also rising football nations. With the exception of the top South American players, European players are a strong currency in Asia Pacific’s many football markets. They represent aspiration, glamour and prosperity, a way out of poverty and the realisation of dreams.

It is all too often uncovered that western business looks at the potential-rich expanse of Asia and its growing middle classes in much the same way a cartoon character’s eyes turn to dollar signs when good fortune comes their way. This exposé of human nature represents the more cynical side of capitalism and can often become evident when traditional markets start to see the graph head south or demand begins to evaporate. 

With brands becoming so powerful and continually refreshing their offering to preserve customer appetite, the life cycle of any consumable, be it a phone, a computer or other forms of technology, can be relatively short. Such is the pace of modern business that the saturation point can be reached sooner than in the past.

When the financial crisis of 2008 broke and banks and corporates eventually climbed out of the mire, they spoke warmly and enthusiastically about the opportunities in Brazil, China, India and Russia. The BRICS, a phrase coined by Manchester United fan Jim O’Neill who was with Goldman Sachs when the world turned upside down, were supposed to be the way out of crisis and the platform for future growth. 

Although they reinforced their emerging market presence to fight on the battlegrounds of South America, Asia and the Steppes, there seemed to be a little cynicism about it all. These countries had, after all, seen banks move in and out of these markets as and when it suited them. 

In some respects, football adopted a similar strategy in so far that the big clubs have concentrated on building global franchises which really amounts to enticing Asian and American fans. It would seem some clubs may have reached saturation point in their own countries. 

European football is not generally a pastime where allegiances are transferable – as the misogynistic music hall wag on the terraces would tell you, “you change your wife but not your club”. Europe’s football-watching public has, to a certain degree, strengthened the theory that the game has become ecclesiastical among its followers, where emotions are over-dependent on 22 young men on a well manicured field, playing a game where the margin of success is extremely fragile.

If the truth was known, the 12 mutineers were aiming at a market that has very different football values than Europe’s mature locations. They may also have overlooked the fact that Asian football leagues are growing, creating their own heroes, fanbases and cultures. China, as one example, is no longer an undeveloped football nation, but at the same time, it is not a football nation like any found in Europe. The government has been very influential in China’s story, encouraging overseas investment on one hand but pulling back the reins when it got out of control. This should not surprise anyone who has any knowledge of China’s history, but there is something a little uncomfortable about the way European football, a child of capitalism, reaches out to a country that until very recently was inaccessible and mysterious.

But if the European Super League’s grandees thought China and its football fans would embrace the European Super League, they might have been in for a shock. Brand Finance research demonstrated that among football fans, the Chinese Super League is still the most followed across the country. Similarly, Japanese football fans are very loyal to their own teams, even though they also have an appetite for big Premier League clubs.

There is a danger that Asia will, eventually, develop strong affection for its own creations and young fans may realise that there is a fine line between customer exploitation and creating a “global family” supporting the club. Some clubs have got it more right than others, and it has to be said there seems a genuine attempt to create friendships and partnerships, but it has to be about something more than just monetising social media followers.

North American fans also have their own leagues and club cultures. Major League Soccer, which may have inspired club owners to pursue a competition which delivered more business certainty than those found in England, Spain and Italy, continues to grow and appears to be well-run and pragmatic. Brand Finance’s research also revealed that 31% of football fans choose MLS first as their league of choice.

If the ESL was to launch, it is fairly clear they may have found a tepid response from fanbases they anticipated would warm to the chance to patronise a new, glitzy, elitist product. The mood in Europe was very clear – the ESL was seen as a heinous crime.

When the ESL collapsed, analysts seemed to be more concerned with the lost business opportunity rather than the havoc an elitist, structure-threatening synthetic league would wreak. The statement made by Juventus’ Andrea Agnelli that Gen Z is not interested in football lacked real substance. If he meant they cannot afford football, then he may be right, but floating the ESL boat away would merely have created “wasteland football”.

What sort of fans do European clubs want in Asia? Most will never get to see their teams in the flesh, so their relationship with the club may only ever be virtual. Clubs can “sell” something that is lifestyle-orientated or an aspirational acquisition, but the real essence of being a fan will inevitably elude the majority. 

No longer are the west’s clubs football missionaries – that job was completed a long time ago. Football is a global game, a global language, so nobody has to be convinced of that. For globalisation to really show its benefits, clubs from emerging regions needs to be able to look their opposite numbers from Europe in the eye and, ultimately, compete with them. Using developing football markets as a place to sell raw materials is outdated – and haven’t we been somewhere like this before?

Photo: ALAMY