China’s soccer field of dreams lacks one thing
China’s soccer field of dreams is taking shape. Tycoons and corporate giants are spending heavily on local clubs and foreign stars. Media and web groups are bidding up the value of broadcasting rights. Yet the Chinese league is missing one key element it
Super-fan President Xi Jinping has made soccer a national reform priority and businesses have enthusiastically joined in. Insurer Ping An paid a mooted price of 600 million yuan ($91.7 million) over four years to become the title sponsor of the Chinese Super League (CSL). E-commerce group Alibaba and electronics retailer Suning have invested in Chinese clubs.
Now those teams are on the offense for foreign talent. Clubs in the CSL, which kicked off its 2016 season on March 4, spent a record 337 million euros ($366 million) on winter transfers, according Transfermarkt. Suning Jiangsu shocked the global sport when it signed Brazilian midfielder Alex Teixeira from Shakhtar Donetsk for a whopping 50 million euros last month.
What’s missing is profit. The CSL’s clubs made a combined loss of 1.5 billion yuan in 2015, estimates one report. Defending champions Guangzhou Evergrande Taobao, which is 40 percent owned by Alibaba, lost 265 million yuan in the first five months of last year.
The bonanza should attract more fans to matches and boost merchandise sales. KPMG Sports Advisory reckons the average attendance for CSL matches jumped 17 percent to 21,800 in 2015, surpassing U.S. Major League Soccer.
The real prize, however, is the promise of television riches. Last year China Media Capital raised eyebrows when it paid 8 billion yuan for the contract to broadcast the CSL for five years. Recently, it re-sold the rights for the first two years to internet company LeSports for 2.7 billion yuan – an implied annual rate of about 17 times what state broadcaster CCTV paid in 2015, according to local media.
But it’s far from clear that online groups can recoup those sums from Chinese web users, who show little inclination to pay for content on the internet. Besides, fans can already watch games from international leagues for free: over 100 million viewers tuned in last year when CCTV showed the Premier League clash between Arsenal and Manchester United, according to a report by Mailman Group.
The vast sums that have flowed into European football in the past two decades were based largely on recruiting affluent armchair viewers. For now, a loyal, paying fan base may be out of China’s league.
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