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.

World Cup beckons for Serbia, but club football is left behind

SERBIA are on the brink of qualifying for the 2022 World Cup, although they still have the daunting task of facing Cristiano Ronaldo and Portugal. They are unbeaten in their seven qualifiers so far, but the Portuguese have a game more to play. It could easily go wrong for the Serbs.

2021 was the 30th anniversary of Red Star Belgrade’s European Cup success, a remarkable achievement but a forgettable final for most onlookers. Red Star and their capital city rivals, Partizan remain two grand old names of European football, but neither can compete on the biggest stage. Serbian football would be one of the domestic leagues that would undoubtedly suffer should a European Super League ever take place.

The gulf between Europe’s top leagues and Serbia can be seen in the economic strength of the country’s biggest name, Red Star Belgrade, who are estimated to be worth just € 63.5 million, less than the value of a big-name player in the Premier League or La Liga. Moreover, Serbian clubs do not benefit from a major broadcasting deal, their current TV income is among the lowest in Europe. In total, Serbian football is thought to be worth less than € 400 million. Perversely, Telekom Serbia, which is partially-owned by the state, recently paid-out € 600 million for Premier League rights, a transaction that attracted great criticism inside and outside of Serbia. This merely underlines that Serbian domestic football has an ongoing battle to retain popularity when faced with the glamour of elite leagues.

Serbia has a population of less than seven million people. Since regaining independence, Serbia is seen as a relatively small country, hence it has limited appeal to major corporates across the continent, although the ubiquitous Russian energy firm Gazprom are Red Star’s shirt sponsors. Many clubs are propped-up by state support or government links. There is a lack of financial transparency at some clubs that breeds a certain mistrust among the public.

Belgrade, however, has a population of 1.2 million, meaning it is, effectively, bigger than British cities like Manchester and Liverpool. For a country of its size, Serbia does produce a lot of decent footballers. According to CIES Football Observatory, there are around 440 expatriate Serbs plying their trade around the world in 60% of major associations. Many of these do not make it to the top five leagues, but neighbouring countries like Bosnia and Hungary benefit from the Serbian production line and player-trading is an important element of club finances. Red Star have a very cosmopolitan squad, with 60% coming from Serbia and 40% foreigners. Partizan, however, has a squad that is 75% Serbian. 

People become very animated and highly emotional about their football in Serbia. Unfortunately, politics and hate are often not far from the surface and only a few months ago, a match between Novi Pazar and Partizan was halted after the latter’s fans began chanting slogans about the Srebrenica massacre and in support of Ratko Mladić, a convicted war criminal from the Balkan war. 

Football has often been linked to violent crime and more than a dozen prominent members of football supporters’ groups have been murdered in recent years in gangland-type killings. Sadly, hooliganism has been associated with nationalist outbursts.

Needless to say, this season’s title race is between the relative heavyweights Red Star Belgrade and Partizan. The two sides drew 1-1 in September, but Partizan are six points ahead of Red Star and have played 16 games to their rivals’ 15. Partizan remain unbeaten, Red Star’s only defeat was at Radnik Surdurlica at the end of October.

Red Star, whoe won the Serbian Super Liga in 2020-21, going through the entire campaign unbeaten, are faring well in the Europa League group stage, but they face a vital game in Braga at the beginning of December. The club’s European ties have attracted some good attendances, far higher than some of their league games this season. Partizan, who last won the league in 2017, are competing in the Europa Conference group stage.

It’s almost a certainty that one of the two Belgrade giants will win the title, at present, Partizan have the upper hand thanks to the goals of Ricardo Gomes and a cast-iron defence. If Red Star win their game in hand, the margin will be just three points. It should make for an interesting second half of the season in Serbia.

This is what really scares European football

FIFA’s proposal to make the World Cup a biennial event is freaking European football at the moment. Other regions are more enthused about Arséne Wenger’s attempt to throw the game up in the air, but Europe feels seriously under threat by this harebrained scheme. 

Once again, the governing bodies give the impression they speak about a more democratic game, but deep-down, financial opportunism really runs football. Not that anyone will sympathise with Europe’s top clubs, who tried their own game of double bluff earlier in the year. It feels, to some extent, like football has become the wild west of global sport and the only thing stopping complete fragmentation is the knowledge most fans are against much of what is being tabled at the moment.

Heart and Soul

There may come a time when this really doesn’t matter and what will determine the drive for more money and ring-fenced leagues and competitions won’t be what the supporters want, but what high finance, media and marketeers demand. Indeed, we have already seen football can exist without fans, albeit a product that lacks heart and soul, but whenever has the softer elements of football ever been taken into consideration by hard-nosed business people?

However, it is the special feeling a World Cup creates that is also under threat. Too much of a good thing is not to be recommended, especially if players become jaded owing to the intensity of their day jobs as club players. Will we ever get to a stage where every club’s top players are only rolled-out for the big games, allowing them to rest for international football?

Moreover, with more and more countries being invited to the ball, FIFA will run out of eligible venues to stage a tournament. Is the future of World Cups likely to be multi-centred or alternately hosted in North America, the Middle East and China?

FIFA’s proposal plays into the hands of people who want financial growth to become the key motivator in the game, if it isn’t already. Listening to recent football business conferences, the dialogue sounds very similar to banking, fintech or technology events, all acronyms, clichés and corporate speak. Likewise, the scripted presentations, extolling the virtues of companies who claim to be people-orientated, socially responsible and eager to tick all the boxes, makes you question their authenticity and real underlying purpose. Football has become a gravy train for lots of peripheral businesses and they all want a piece of the action. Hardly anyone appears to be trying to solve football’s continued polarisation, excesses and moral code, largely because so many are feeding off the back of it.

Devaluation

There needs to be fewer matches, not just because of player fatigue purposes, but also because certain demographics are being squeezed out of the game due to the sheer cost of watching big-time football. Clubs won’t necessarily champion this, even though it is their players, their fans, that are at the sharp end of crowded calendars, because they crave the revenue. 

In 2019-20, European football’s income declined by 13% to € 3.7 billion, while the top 20 clubs, according to Deloitte, saw their revenues drop by 12% to € 8.2 billion. Recent announcements around 2020-21 figures demonstrate the downward trend and the size of some of the losses. Fewer games will, arguably, mean lower revenues from matchdays and this won’t be dovetailed with lower wages. Generally speaking, footballers’ wages are akin to house prices, they seem to always be in the ascendancy.

Somebody needs to be more transparent about FIFA’s agenda, though. At the recent World Football Summit, Jacco Swart of the European Leagues said that, contrary to FIFA’s claims that the fans want more World Cups, the research his group had seen suggested otherwise.

Swart said that additional and more frequent World Cups could devalue media rights of all other major competitions. Furthermore, an expanded UEFA Champions League will also increase the enormous disparities that prevail in Europe. By 2024, participants will be guaranteed 10 matches in the group stage, which will provide more income and widen the gulf between Champions League clubs and their domestic rivals. A problem that currently exists will only get worse. The introduction of the UEFA Europa Conference League was seen as a positive by Swart as it allows more clubs to benefit from European club competition. The money smaller clubs in lesser leagues get from the Europa League and Conference League is a big boost to their finances.

Nevertheless, the financial disparity between the Champions League and UEFA’s other competitions is substantial. Of this season’s group stage, 10 of the 32 clubs have appeared in all of the last five Champions Leagues, with eight featuring in four and four in three. That’s 22 of 32. All of these clubs have a significant advantage over their local rivals from regular involvement. 

Threat

Some football folk are worried that UEFA’s continued expansion of its franchise may continually threaten the position of domestic leagues with the end game being European competitions taking over the sacred weekend slot. “That will be crossing a red line,” said Swart.

There are also concerns from groups like European Leagues that UEFA’s potential € 7 billion fund will not find its way to the smaller clubs across the continent, but will be directed towards the big names who have racked-up huge debts. Swart commented: “The provision of this facility should not lead to further inequality in the system.”

But what can change the current situation? Since the 21st century began, we’ve had terrorism, a financial meltdown, political unrest and a pandemic. If football didn’t live so precariously, it would not have been so vulnerable when covid-19 came along, but the game has, mostly, proved to be robust and resilient. The pandemic tested the business models of the biggest clubs and their reaction was to try and create a self-serving project to compensate for their own parlous financial situations. 

When a club like Barcelona loses its best player because it cannot afford to keep him, something is definitely very wrong. More World Cups would not be part of the solution, they would merely make the problem worse, and instead of expectation and hope, continual carnival would prompt a shrug of the shoulders and weary sigh. When football loses that aspect of its offering, we are in trouble, for even the Romans found that bread and circuses can have limited appeal.