Wed, Jun 08, 2016 - Page 20 News List

No end in sight to Chinese soccer spree, experts say

AFP, BEIJING

China’s extraordinary spending spree on soccer assets shows no sign of slowing down — but the bubble is also unlikely to burst for some time to come, experts say.

Clubs, players, coaches, media assets and high-profile sponsorships have been eagerly snapped up by Chinese teams and investors, shifting the goalposts for soccer’s economics.

On Monday, Italy’s Inter became the most prestigious club to come under Chinese ownership, when Suning Holdings Group’s billionaire chairman, Zhang Jindong, announced a 70 percent takeover.

It follows earlier swoops on Spain’s Atletico Madrid, 20 percent owned by the company of Asia’s richest man, Wang Jianlin, and RCD Espanyol, which was bought out by a model car-maker owned by billionaire Chen Yasheng.

A state-backed Chinese fund owns 13 percent of Manchester City, Aston Villa have accepted a takeover offer from China’s Tony Xia and last month Chinese investors bought a controlling stake in international media rights company MP & Silva.

Earlier this year, Chinese Super League clubs indulged in a world-leading 331 million euros (US$365 million) binge on players, breaking the Asian transfer record four times in quick succession.

One key impetus is soccer-loving Chinese President Xi Jinping’s ambition to turn China into a world soccer power, with successful clubs and a winning national team.

Chinese companies are also keen to gain global reach and visibility, and diversify away from their core businesses at a time of uncertainty in the Chinese economy.

David Hornby, sports business director of the Mailman brand management group in Shanghai, said China’s soccer investment craze did not seem likely to peter out soon.

“These deals have been coming thick and fast therefore are certainly part of a bubble, but it’s a bubble unlikely to burst anytime soon,” he said. “This outbound investment into football will continue for at least the next two years.”

In the next few years, Chinese firms will begin reassessing their investments based on returns, Hornby added, which could change buying patterns.

Appliance retailer Suning agreed to pay 270 million euros for its 70 percent stake in Inter, a price which looks substantial, but not exortionate, he said.

“The Inter valuation is somewhat higher than expected, but not dissimilar to the figures being paid by groups out of the Middle East for top European clubs,” Hornby said.

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