Skip to main content

"If you want some accessible but informative insight into football then I suggest you couldn't do better than the Political Economy of Football website, which is not only intelligible but comes with the added bonus of being written by Addicks fan Wyn Grant."
Ben Hayes - Charlton Athletic programme

A list and B list Chinese investors


As clubs looking for buyers and investors welcome the new wave of Chinese investors, it is as well to remember that not all of them may be of high quality.

The tale of Birmingham City is a cautionary one.   Acquired in 2009 by Carson Yeung, a former hair salon proprietor, the team was relegated to the Championship and remains there for now.  Yeung was jailed in Hong Kong in 2014 for money laundering and the club remains barely known in China.

The fact of the matter is that there are A list Chinese investors like Wanda and Fosun which have plenty of funds at their disposal and a strategic plan to develop their sports and media businesses and B or even C list investors.   The latter group have less money to spend and the source and extent of their money is difficult to trace.

They often offer fewer synergies than the A list conglomerates.  For example, Lai Guochuan, the new owner of West Bromwich Albion, previously built a company he described as 'the IBM of landscape gardening.'   In the case of the Baggies, as many as a dozen Chinese investors looked at the club, but only four had the financial capability and a good rationale to proceed with the deal.  

Many smaller Chinese companies have no experience of football and appear to be acting on a whim. They may think that they will win favour with Communist Party bosses by signing up to President Xi's ambitious plan to make China a leading football nation.  Guanxi or connections are everything in China, not least connections with the ruling party that can grant entrepreneurs the space to operate or decide to make life dificult for them.

One constant that is unlikely to change in China is the existence of a party state regime.   There is a plurality of ownership structures and ambiguity in the status of business.   This is not accidental.  A successful economy is a key requirement for continuing effective party rule, but business also needs to be kept in check in case it develops as an alternative power centre to the ruling party.

Business is profit seeking as it would be in a market economy, but it is also taking political orders or at least seeing the way in which the political wind is blowing, as with football.   To some extent there is competition to extract favours from the state.   This may seeing the mapping of bureaucratic rivalry on to business competition which may create risks of corrupt behaviour.

Feng Tao, chief executive of Chinese sports marketing company Shankai, a Chinese sports marketing company, told the Financial Times that some entrepreneurs believe they can make quick profits by buying underperforming European clubs with a large fan base and turning them round, eventually capitalising on a higher valuation by injecting them into Chinese listed companies.

Blogger Mark Dreyer from China Sports Insider says 'the idea that clubs will be big in China just because they have a Chinese owner is nonsense.   Some of these purchases are going to end in tears.'