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China has recently become one of the top five spenders in the global football transfer market, as the owners of the Chinese clubs don’t hesitate to put their hands deep into their pockets to persuade famous footballers to move in the Asian country. Excited fans, lucrative contracts and political aspiration create an idiosyncratic environment in the Eastern country.
Players, agents and teams have strongly benefited from extravagant spending. A footballer may decide to join the ranks of a Chinese team and compete in a probably not-so-competitive championship, to secure a lavish living for the rest of his life. In the past, not many renowned footballers at the end of their careers used to play for teams in Asia and the Middle East.
However, nowadays football stars – like the former Chelsea player Oscar, who moved to Shanghai SIPG in the January transfer window – decide to sacrifice their future in the sport in order to see their bank balance soar. In fairness, would many people turn down an offer of £615,000 per week to play in a Chinese club? Most probably not.
Carlos Tevez accepted Shanghai Shenhua’s offer, and at the age of 32 the Argentinian has become the highest paid player in the world, receiving a staggering £32m a year.
China’s Supercharged Football Industry
The lack of top-class Chinese footballers to staff the teams is one of the reasons behind the transfer of foreign stars. However, the main reason is the Chinese government’s ambition to become a football superpower in the future. In its agenda, the government includes major reforms to its sports sector and aims to invest large sums of money in it. In fact, there is a plan to invest $813bn in the sports industry over the next decade.
The Chinese Football Association (CFA) wants to increase the presence of football in Chinese society. The strategic plan focuses on the establishment of 20,000 football schools by 2025, together with the creation of new training facilities and stadiums along the country.
These actions seem connected with China’s desire to host a FIFA World Cup in the future, too. Considering all the above facts, the influx of international players into the Chinese Super League may be just the tip of the iceberg.
Hand in Glove with the Big Players
Sports and politics have always been interconnected. As a result, the tactic of generous investments from the companies that own the football clubs is aligned with the government policies surrounding football. These companies perceive their investment as a way to win collateral favour with the government and build up close relationships.
It is therefore no coincidence that the Evergrande Group, one of the key players in the real estate industry in China and the Alibaba Group own 57% and 38% of Guangzhou Evergrande Taobao respectively. Investing money in Chinese clubs isn’t a one-way process. The participation of football stars positively affects the revenues of the teams, as the product being offered is more attractive.
Increased attendance at matches, sales of player shirts, interest from sponsors and growing broadcasting fees (which under current agreements have reached $1.3bn) can contribute to the returns to all this investment.
What the Future Holds
Chinese football still can’t compete with the top leagues in Europe – and it’s unsure if it will ever do, particularly given the limit on the number of foreign players that every club can use. However, if this situation changes in the future then there may be a shift in the balance of global football. One thing is for certain: the owners of Chinese clubs willing and able to pay the price.