Reporter Journal / William Hennelly

China hopes world-class soccer investments pay off at home

By William Hennelly (China Daily USA) Updated: 2015-12-03 06:03

China hopes world-class soccer investments pay off at home

President Xi Jinping is joined by British Prime Minister David Cameron, former Manchester City star Patrick Vieira (second from left) and Manchester City Chairman Khaldoon Al Mubarak (second from right) at the City Football Academy in Manchester, England, on Oct 23. WU ZHIYI / CHINA DAILY

China's future soccer fortunes could rest on investing some of its own fortune in the great teams of the world.

A Chinese consortium's $400 million investment in the group that owns the Manchester City soccer club of the English Premier League is the latest move by China to make a splash in the beautiful game.

CMC, a Shanghai private-equity firm that holds broadcast rights to the Chinese Super League, teamed with CITIC Capital Holdings to buy 13 percent of City Football Group it was announced on Tuesday.

The deal values City Football Group at $3 billion, about the same as City's cross-town derby rival Manchester United, whose shares trade on the New York Stock Exchange.

"Clearly the Chinese leadership want to have a better football team," Simon Kuper, columnist with the Financial Times of London, told China Daily in a call from Paris. Kuper is the co-author of Soccernomics, a best-selling book that looks at the sport through a country's demographics and economic strength.

Kuper conjectured that Li Ruigang, chairman of CMC, was trying to "impress the president. It's (soccer) something close to the president's heart," he said. "As you know, doing business in China is very difficult if you don't have Chinese partners.

"My guess is pretty soon there will be a club called something like City playing in the Chinese premier league," Kuper said.

President Xi Jinping visited Manchester City's training facility during his UK state visit in October, where he took a selfie with Man City star Sergio Aguero and Prime Minister David Cameron.

"Manchester City was never thinking about becoming profitable until they became it," Kuper said. "Really they were just trying to build a brand, and having fun with New York City and Melbourne.

"Only very recently has City become profitable," Kuper told CNN International on Tuesday. "It's worth 10 times more," he said, adding that it was "a big surprise that suddenly City is a business".

"Football is a now at a fascinating and critical stage of development in China," Li said. "We see unprecedented growth opportunities in both its development as an industry, being China's most watched sport, and its inspirational role bringing people of all ages together as a shared passion."

Khaldoon Al Mubarak, chairman of City Football Group, told CNN International that "having the right partner in China is critical. China is the future, and City Football Group will be involved in China. We've been working on China for years. … This transaction had been worked on before that visit."

Manchester City, which sits atop the Premier League table, was bought in 2008 by Abu Dhabi United Group, owned by Sheik Mansour bin Zayed Al Nahyan. Its City Football Group also owns 80 percent of the New York City Football Club of Major League Soccer — the New York Yankees own the other 20 percent. NYCFC plays its home games at Yankee Stadium.

"It's not a bad time to invest in soccer," Kuper told China Daily. "You guys (in the US) have salary caps. Our soccer clubs have a global market, whereas your American sports clubs don’t. Investing in American soccer is still loss-making. There's no sign of that changing.

"TV rights for the Chinese league are still $1.3 billion, one of the handful of the richest leagues in the world," he said.

He told CNN that "if you're moving to China now, you're a first mover. … Now it's back on state TV. This is a country that is only beginning to turn on to English football."

"Huge amounts of money to be earned there," Kuper said. "China's political strategy is to host the World Cup. … Getting some of Manchester City's know-how could help.”

Soccer in China, at least how the men's national team has played it, has a long way to go. China has been to only one World Cup (2002), where it failed to score a goal and lost all three group matches. The women’s squad, conversely, has six World Cup appearances and reached the quarterfinals in the summer, losing to eventual champion the United States. (The two sides will play an exhibition rematch on Dec 13 in Glendale, Arizona.)

Kuper believes that China's strong showing at the 2008 Olympics in Beijing along with more participation in team sports are good signs for eventual soccer success.

The Man City buy-in was the latest of China's football pitches.

Last month, Rastar Group, a Chinese entertainment company, agreed to buy 56 percent of Barcelona's Espanyol, which plays in Spain’s top flight La Liga.

In January, Dalian Wanda Group Co, whose chairman is billionaire Wang Jianlin, took a 20 percent stake ($52 million) in Atletico Madrid, La Liga champs last year.

Alibaba Group Holding Ltd last year paid $192 million for a 50 percent stake in Guangzhou Evergrande Taobao Football Club in the Chinese Super League.

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