China’s European Soccer Takeover Puts Politics over Profits

Beijing’s plan to turn China into a global soccer powerhouse has led to several investments in foreign clubs over the past year, despite China’s general controls on capital exiting the country.
China’s European Soccer Takeover Puts Politics over Profits
Children play soccer on a practice pitch at the Evergrande International Football School in Guangdong Province, China. Kevin Frayer/Getty Images
Fan Yu
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News Analysis

Beijing’s plan to turn China into a global soccer powerhouse has led to several investments in foreign clubs over the past year, despite China’s general controls on capital exiting the country.

With official state backing, Chinese foreign investment into soccer clubs ballooned over the past year. Over ten deals were closed since early 2015 involving clubs in the U.K., France, Italy, and Spain.

The latest deal was announced last week, when a group of unidentified Chinese investors bought A.C. Milan, a participant in Serie A and one of the most successful European clubs in history, from former Italian Prime Minister Silvio Berlusconi. The purchase valued Milan at around $500 million.

The A.C. Milan deal comes merely a month after Chinese retailer Suning Holdings purchased a 70 percent controlling stake for around $300 million in Internazionale, another club in Italy’s Serie A.

In the same month, on June 17, Chinese businessmen Chien Lee, Zheng Nanyan, and a consortium of other investors acquired an 80 percent stake in French Ligue 1 soccer club OGC Nice for an undisclosed sum.

China’s shopping spree over the last year has netted the country a list of Who’s Who of European soccer clubs, including varying stakes in Spanish club Atletico Madrid, English Premier League teams Aston Villa and Manchester City, France’s FC Sochaux-Montbeliard, Czech’s Slavia Prague, and others. The Chinese funding came from a spectrum of sources, including individual businesspeople such as Wang Jianlin, private companies, and state-owned companies such as Citic Capital.

Milan forward Carlos Bacca (L) fights for the ball with Juventus' Giorgio Chiellini during the Italian Tim Cup final in Rome on May 21. A group of Chinese investors paid $500 million to acquire A.C. Milan this month. (Filippo Monteforte/AFP/Getty Images)
Milan forward Carlos Bacca (L) fights for the ball with Juventus' Giorgio Chiellini during the Italian Tim Cup final in Rome on May 21. A group of Chinese investors paid $500 million to acquire A.C. Milan this month. Filippo Monteforte/AFP/Getty Images
Fan Yu
Fan Yu
Author
Fan Yu is an expert in finance and economics and has contributed analyses on China's economy since 2015.
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