A combination of politics and economics are driving increased interest in football in China and the involvement of Chinese investors in European football. Underlying both drivers are an increasingly prosperous and urbanised population seeking leisure and entertainment and new sources of identity. It’s a classic case of political economy, the interaction of states and markets.
A combination of politics and economics are driving increased interest in football in China and the involvement of Chinese investors in European football. Underlying both drivers are an increasingly prosperous and urbanised population seeking leisure and entertainment and new sources of identity. It’s a classic case of political economy, the interaction of states and markets.
The backing of the Chinese leadership is of key importance, although there is some uncertainty about whether President Xi Jinping supports Manchester City or Manchester United. He visited City on his recent trip to the UK, but is thought to have leanings towards the red side of the city.
In any event, investors have tuned into the fact that the President is an avid soccer fan. When the government gets behind a sector, the signals are picked up by investors who pile into the sector. The first ones to do so usually make some money.
Wing Jialin, China’s richest man, invested £52m in a stake in Atletico Madrid. Last week China Media Capital bought a 13 per cent stake in Manchester City’s owners, City Football Group. There have also been deals involving domestic clubs. Jack Ma, chairman of ecommerce group Alibaba, last year took a 50 per cent stake in Guangzhou Evergrande, the strongest team in China.
Merchandising by foreign clubs is evident everywhere, ranging from a Manchester United themed bar in Shanghai to a trade in David Beckham products. However, China remains among the world’s major under-penetrated sports markets. Total revenues from ticketing, merchandising and advertising were estimated at $3.4bn this year compared with $63.6bn in the US.
Nevertheless, the Chinese market is the third fastest growing and European clubs are keen to establish their brands. I was talking recently to a Chinese national who is in charge of marketing there for a Premiership club and he reckons that this need to be done before Chinese clubs establish themselves. However, he admitted this could take ten to fifteen years and one wonders whether they will ever match the passionate atmosphere offered in the Premiership.