A growing number of Chinese investors are showing great interest in top European football teams.
Chinese billionaires are looking at English Football League Championship clubs, finding little success in pursuing teams from the five major European leagues.
Wolves is the second Championship club to have Chinese owners after Aston Villa earlier this year.
Chinese conglomerate Fosun International acquired 100 percent of Wolves in a deal thought to be worth 45 million pounds (US$59 million).
The English Football League Championship is the second highest division in English football after the Premier League.
Wolves, ranked 14th last season, have a glorious history.
Fosun said its goal is to take Wolves back to the Premier League and keep them there.
Why the surging interest by Chinese investors in English football?
The Chinese government has been encouraging domestic companies to get involved in European football. Chinese investors have either acquired or bought into European football teams.
The English Premier League is considered the most profitable league in the world and it has always been open to foreign investors.
Chelsea is owned by Russian billionaire Roman Abramovich and Manchester United by an Arab billionaire.
The buying frenzy has pushed up salaries and transfer fees to record high.
As a result, up to 12 teams out of 20 in the Premier League reported losses in the 2012-2013 season.
Copyright revenue accounted for half of the income of the Premier League in the 2014-2015 season and this is expected to rise further.
However, it’s fairly hard for Chinese investors to buy first-tier football teams in the Premier League.
A state-owned company has been trying to acquire Liverpool without success.
In May, Chinese businessman Tony Xia agreed to buy relegated Aston Villa for 60 million pounds.
Xia became the club’s chairman and vowed to lead the club into the top six and bring European football back to Villa Park.
Also, he agreed to pay another 30 million pounds if the team gets back into the Premier League in three years.
This deal makes economic sense.
If a Championship team moves into the Premier League, revenue will increase by 170 million pounds.
As many as 10 Chinese billionaires have targeted at least one European football club.
In July 2014, China’s United Vansen International Sports Corp. acquired a 98 percent stake in Dutch soccer club Alles Door Oefening Den Haag, the first such deal by a Chinese investor.
Lesser known Chinese buyers have enjoyed huge publicity from the takeovers.
In March 2015, billionaire Wang Jianlin snapped up 20 percent of Spanish club Atletico Madrid.
Now big Chinese companies have joined the buying spree.
A Chinese consortium led by China Media Capital Holdings spent US$400 million for 13 percent of Manchester City a few weeks after Chinese President Xi Jinping visited the team’s training facility.
Chinese electronics retailer Suning Commerce Group bought 70 percent of Italian soccer club Inter Milan for 270 million euros.
This article appeared in the Hong Kong Economic Journal on July 25.
Translation by Julie Zhu
[Chinese version 中文版]
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