China's Soccer Strategy
OPINION |

China's Soccer Strategy

FOR CHINA, FOOTBALL IS A NATIONAL PRIORITY AND A BUSINESS WITHOUT BORDERS, FUELING TOURISM AND CONSUMPTION AND FOSTERING CULTURAL INTEGRATION

by Dino Ruta, SDA Bocconi School of Management
Translated by Alex Foti


The acquisition of Milan's two soccer teams FC Inter and AC Milan by Chinese investors has triggered strong reactions, both in sports and economic circles. It may seem like a problem, but it is not. Indeed, it is part of a clear political strategy that China is developing around football for being the world's most popular sport.

The Chinese government has said it wants to create an $813-billion sports industry in China by 2025, by acquiring football clubs and specialized media companies abroad, by bringing soccer champions to China (such as Tevez and Lavezzi) and successful coaches (such as Lippi) to spur the growth of the national football league (the Chinese Super League), and ultimately through the development of the sports market among Chinese fans and companies. China's economic plan, in a far-sighted way, is not just about professional soccer, but aims to invest in amateur leagues by providing the country with at least one soccer field for every 10,000 people by 2030. Every Chinese will be encouraged to play more football, watch more football, and thus consume more.
 
Political will has immediately translated into Chinese entrepreneurs buying minority or majority stakes in major English, French, Italian and Spanish football clubs. Conversely, the German rule requiring ownership of the club to be controlled by fans for 50+1% of shares, makes the Bundesliga immune from the China effect for the time being. Chronologically, examples of international import are: April 2015, the Dalian Wanda Group acquires 20% of Atletico Madrid (Spain) and supports the expansion of the club, which in September will play its first game in the brand-new stadium called Wanda Metropolitano; August 2016, IDG Capital Partners acquires 20% of Olympique Lyonnais (France); May 2016, Recon Group buys Aston Villa (UK); June 2016, the corporate giant Suning acquires a majority stake in FC Inter, while in July 2016, ownership of AC Milan is transferred to a Chinese business consortium that will complete the deal in March 2017.
 
The Chinese strategy, however, does not only focus on clubs. In February 2015, Dalian Wanda Group announced the acquisition of Infront Sports & Media, the world's leading sports media rights management company, for $1.2 billion. And other companies, including Suning Sports, buy the media rights of major soccer championships and sporting events to distribute them to the huge market constituted by Chinese sports fans.
 
Soccer is a way of demonstrating China's soft power, developing tourism and improving the business standing of Chinese companies that want to win over the West. Anyone who becomes the owner of a European football club immediately enters the international network of global elites. In this scenario however, there is a knot that still needs to be untied: the challenge of management. Especially in the case of acquisitions of clubs, it is fair to ask whether these investments will have a pure financial nature or if there is also a desire for involvement in operations. This is a challenge that has been launched in Europe by Qatar Sports Investments with the purchase of Paris Saint-Germain (PSG), by Abu Dhabi with Sheikh Mansour's acquisition of Manchester City, although sports results were lower than expectations, also considering the huge sums invested.
 
Becoming great at football is not impossible, but it is not so simple and it is clearly not just a matter of money. The discussion then shifts on the organizational models that Chinese owners will want adopt for their sports investments. In all industries where intangibles are highly relevant (and sport is one of these), the transfer of knowledge is not coded and mainly occurs through in-person relationships. So the Chinese will need a lot of time and patience to build cohesive international teams, if they want their sports investments to be successful. When China organizes and wins the world cup with national team led by a Chinese coach, then we will be able to say that the country's soccer strategy will have finally come to fruition. It's likely that sports, as is often the case, will accelerate China's cultural and economic integration with the rest of the world. For China football is not just a game, but a managerial and economic objective, like it often happens when a country wants to succeed in international sports.

Read More on this topic:
Andrea Colli, China Inc: The Celestial Empire Is Changing Direction
Elisabetta Marafioti, Chinese Digital Capitalism
Dialogue between Italy and China is an opportunity for all concerned. Interview with Marco Tronchetti Provera
Andrea Ghizzoni, I Can Tell You Why Tencent Chose Italy to Win Over Europe
Rodrigo Cipriani Foresio, When Alibaba's Jack Ma Told Me “Take Your Time”
Emanuele Francia, How I Help Chinese Companies Acquire Expertise
Kelly Chen, The Reasons Behind China's Successful Expansion
What Our Country Can Give You
 

Latest Articles Opinion

Go to archive
  • Occupational Downgrading Puts Mental Health at Risk

    Immigrants tend to be overqualified for the lowskilled, highrisk occupations that they tend to take up. A research study shows that this fact increases the risk of psychological disorders

  • With Increasingly Flexible Work, the Old Stakes Are of Little Use

    New work time arrangements and forms require new ways of management and new protections. And therefore, new forms of labor relations and union organizations

  • Trust That Can Be Trusted

    There is social trust and institutional trust. And if the former is more stable to external shocks, the latter is more sensitive to them. The two can also diverge, as during the pandemic, when mistrust in US institutions towards emergency management corresponded to an increase in social trust

Browse the magazine in digital format.

View previous issues of Via Sarfatti 25

BROWSE THE MAGAZINE

Events

Mon Tue Wed Thu Fri Sat Sun
        1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31