Suning’s loss to Inter Milan shows China’s failure to dominate football

But China’s ambitions have never succeeded – and may be on the verge of complete collapse.

On Wednesday, US-based asset management firm Oaktree Capital take overItalian soccer club Inter Milan after its Chinese owner, Suning Holding Group, failed to repay a 395 million euro ($429 million) debt on time. Suning offered its shares in Inter Milan as collateral.

Suning losing ownership of Inter Milan is part of a wider exodus of Chinese companies from European football. There are up to 20 European clubs was owned by major Chinese investors in 2017; That number has dropped to just 10 in 2021.

Suning’s forced exit from European soccer is a decades-long test to see whether flashy multi-billion dollar deals aimed at elite sports can trickle down to build Should a giant play real football or not.

“Looking back, there aren’t many great examples of success,” said John Duerden, a longtime football reporter in Asia. Chinese ownership of these European clubs has not resulted in large investments or significant wins on the field. Some Chinese owners have sold their shares in European professional clubs within years of buying them.

These huge foreign investments in elite professional football have not brought benefits at home either. The Chinese national team has not participated in the FIFA World Cup in more than two decades.

Tom Byer, a youth soccer development consultant in Tokyo, Japan with experience in the Chinese soccer system, said China’s entry level is “broken.” “The biggest driving force in football is culture and there is no culture in China. Most Chinese families consider football a pastime for studying and they don’t want their children to play.”

A “world football superpower”

China’s football performance is a major miss compared to the ambitious plans announced in the mid-2010s.

In 2016, Suning buy 70% stake in Inter Milan in one of the highest forays by a Chinese business into European football. That same year, organizations such as the Chinese Football Association come up with a plan to turn China into a “world football superpower”.

Other Chinese companies, cashed in from the country’s booming economy, have bought stakes in European clubs. Dalian Wanda Group bought one 20% stake in Spanish club Atletico Madrid in 2015 and then signed a 5-year contract naming rights deal when Atletico moves to new stadium in 2017. Fosun International buy English club Wolverhampton Wanderers in 2016.

Football fans at the time were not concerned about the new ownership of a club in China. “Nationality is secondary. As long as the results are okay, fans tend to put those worries aside,” Duerden said.

Corporations also poured money into the Chinese Super League, the country’s top domestic football tournament. In 2010, China Evergrande Group — then one of the country’s largest real estate developers, years before the collapse that sparked today’s real estate crisis — bought the Football Club Guangzhou stone. Since 2016, Evergrande has sponsored the costly transfer of players in Europe to China. Other owners of Chinese football clubs, including Suning, also finance transfers from Europe themselves.

At one point, CSL equal The biggest European leagues in terms of money spent on transfers. According to data from Transfermarkt, a soccer website that compiles player transfer data, they spent 418 million euros ($453 million) in 2016 and 543 million euros ($589 million) in 2017.

But just as things were starting to take off, the authorities asked for time on these ambitions.

Chinese Football Association ordering club Limit “unreasonable spending” on foreign players in 2017, as well as limit their presence in top teams to support domestic talent. Three years later, in 2020, CSL Order sponsorship to remove their brand from local clubs.

Then money became tight. Beijing’s efforts to limit excessive debt in the real estate sector caused Evergrande difficulties in liquidity crisis. Government agencies take over the company’s football stadium by the end of 2021. (Evergrande defaulted on its foreign debt at the end of this year).

Former Inter Milan owner Suning also had cash difficulties. The group’s shares in Evergrande’s subsidiary immersed in value when the parent company collapsed. E-commerce competitors such as JD.com also put pressure on Suning’s core retail business, limiting its ability to fund operations at its domestic club, Jiangsu Suning FC. Club disband first of the 2021 season, shortly after winning its first CSL title.

Suning’s loss to Inter Milan last week erased the net worth of company founder Zhang Jindong. The one-time billionaire was worth about $6 billion when his company bought Inter Milan in 2016, according to Bloomberg calculate. Now it’s close to zero.

Suning has made a name for itself in the retail industry, selling electronic devices in thousands of brick-and-mortar stores. With revenue of $35.5 billion in fiscal 2020, the Chinese company ranked 328th on the rankings. Luck’Global 500 list 2021.

That was the last time Suning made the list as revenue dropped to $10 billion in 2022.

Who owns clubs in Europe now?

Oaktree, in a statement shortly after taking control of Inter Milan, said it The initial focus will be on ensuring “operational and financial stability”. The company is planning to attract more Italian and European members to the club’s board of directors. (At the time of Oaktree’s takeover, ethnic Chinese made up more than half of Inter Milan’s board, including its chairman.)

America now has a larger presence in world football. Half of the teams in the English National League currently exist some degree American ownership. And Inter Milan now is Saturday club in Italy’s top league is owned by an American company.

Gulf countries also started buying clubs in top European leagues. Paris Saint-Germain, owned by Qatar Sports Investments, dominates the French league, while English club Manchester City, owned by a company controlled by United Arab Emirates royal Sheikh Mansour control, is champion both domestically and in Europe.

But some ownership stakes are controversial. Human rights activists and some politicians Have be censured The takeover of Newcastle by the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, was seen as “sports money laundering” or the use of football to help cover up the country’s human rights record.

Will China ever be good at soccer?

China’s male soccer players perform poorly on the global stage. The country’s national men’s team ranked 88th out of 210 teams, low for a country with such a population size. The team has only qualified for the FIFA World Cup once, in 2002.

Byer, who has held positions with the Chinese football team at the national youth level and at the Beijing Guoan football club, said that “most people know nothing about youth development”. .

While China focuses on the upper class, neighboring Japan targets younger players. That “automatically increases the pool of elite players, because the gap between the best and the least developed gets smaller,” Byer explains.

Japan first qualified for the FIFA World Cup in 1998, but have since qualified for every tournament. More Japanese players playing in Europe’s top leagues, the pinnacle of professional football. (There is currently no Chinese player in the top European leagues after Wu Lei left the Spanish club Espanyol in August 2022.)

China is currently competing in the upcoming FIFA World Cup 2026 qualifiers, to be held in Canada, Mexico and the United States.

Even Chinese President Xi joke about his team’s performance. In November, after the Chinese team defeated the Thai team in a FIFA World Cup qualifying match, the Chinese president told the Prime Minister of Thailand Sretta Thavisin that “there is a lot of luck,” according to a post from the official social media accounts of the Thai government.

“I’m not too sure about their level,” Mr. Xi said. “There were ups and downs.”