Suning’s defeat to Inter Milan crowns China’s failure to dominate football

But China’s ambitions never really got off the ground – and may be on the verge of complete failure.

On Wednesday, US asset management firm Oaktree Capital took overr the Italian football club Inter Milan after its Chinese owner, Suning Holding Group, failed to repay a debt of 395 million euros (429 million dollars) on time. Suning had offered its stake in Inter Milan as collateral.

The loss of Suning’s ownership of Inter Milan is part of a wider exodus of Chinese companies leaving European football. Up to 20 European clubs were owned by large Chinese investors in 2017; this number has dropped to just 10 by 2021.

Suning’s forced withdrawal from European football caps a decade-long experiment to see whether spectacular multi-billion dollar deals targeting elite sport could create a true football giant.

“Looking back, there aren’t many examples of great success,” says John Duerden, a long-time Asian soccer reporter. Chinese ownership of these European clubs resulted in neither massive investment nor significant victories on the field. Several Chinese owners sold their stakes in professional European clubs within a few years of purchasing them.

Nor have these large foreign investments in top-level professional football translated into profits at home. China’s national team has not participated in the FIFA World Cup for over two decades.

China’s entry level is “broken,” says Tom Byer, a Tokyo-based youth soccer consultant with experience in the Chinese soccer system. “The biggest driver in soccer is culture, and that doesn’t exist in China. Most Chinese families see soccer as a distraction from education and don’t want their children to play.”

A “world football superpower”

Compared to the ambitious plans presented in the mid-2010s, China’s performance in football is a major setback.

In 2016 bought a 70 percent stake in Inter Milan, which was one of the most significant forays by a Chinese company into European football. In the same year, organizations such as the Chinese Football Association Submit plans To make China a “world football superpower”.

Other Chinese companies, which have a lot of money thanks to the country’s booming economy, bought shares in European clubs. The Dalian Wanda Group bought a 20% stake in the Spanish club Atletico Madrid in 2015 and then signed a five-year contract Naming rights deal when Atletico moved to its new stadium in 2017. Fosun International bought the English club Wolverhampton Wanderers in 2016.

Back then, football fans weren’t worried about the new Chinese owners of a club. “Nationality is secondary. As long as the results are OK, fans tend to put these concerns aside,” said Duerden.

Conglomerates also pumped money into the Chinese Super League, the country’s top domestic soccer league. In 2010, China Evergrande Group – then one of the country’s biggest property developers, years before its collapse sparked today’s real estate crisis – bought Guangzhou FC. From 2016, Evergrande financed costly transfers of European-based players to China. Other owners of Chinese soccer clubs, including Suning, also financed their own transfers from Europe.

At some point the CSL rival Europe’s biggest leagues have spent a lot of money on transfers, with €418 million ($453 million) spent in 2016 and €543 million ($589 million) in 2017, according to data from Transfermarkt, a football website that collects data on player transfers.

But just as things were gaining momentum, the authorities put an end to these ambitions.

The Chinese Football Association appointed clubs In 2017, the CSL decided to curb “irrational spending” on foreign players and limit their presence in top teams in order to promote local talent. Three years later, in 2020, appointed sponsors to remove their brand names from local clubs.

Then money became scarce. Beijing’s efforts to curb excessive borrowing in the real estate sector brought Evergrande in a liquidity crisis. Government authorities took over the company’s football stadium at the end of 2021. (Evergrande defaulted on its foreign debt at the end of the year).

Former Inter-owner Suning also had a liquidity shortage. The conglomerate’s holdings in a subsidiary of Evergrande decreased in value when the parent company collapsed. E-commerce competitors such as JD.com also put pressure on Suning’s core retail business and limited the company’s ability to finance the operations of its domestic club, Jiangsu Suning FC. The club dissolved the 2021 season, shortly after winning its first-ever CSL title.

Suning’s loss of Inter Milan last week wiped out the fortune of the company’s founder, Zhang Jindong. The former billionaire was worth about $6 billion when his company bought Inter Milan in 2016, according to Bloomberg. Calculations. It is now close to zero.

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

This was the last time Suning was on the list as its revenue fell to $10 billion in 2022.

Who owns the European clubs today?

Oaktree announced in a statement shortly after taking control of Inter Milan: said it The initial focus will be to ensure “operational and financial stability.” The company plans to bring more Italian and European members onto the club’s board. (At the time of Oaktree’s takeover, more than half of Inter Milan’s board, including the president, were people of Chinese descent.)

The USA now has a greater presence in world football. Half of the teams in England’s top league now have a certain degree of US ownership. And Inter Milan is now the seventh club in Italy’s top league will be owned by a US company.

The Gulf states are also beginning to buy up clubs in Europe’s top leagues. Paris Saint-Germain, owned by Qatar Sports Investments, dominates the French league, while British club Manchester City, owned by a company controlled by the Emirati royal family of Sheikh Mansour, is successful both at home and in Europe.

However, some ownership shares are disputed. Human rights activists and some politicians have criticized He described the takeover of Newcastle by the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, as “sportswashing”, i.e. the misuse of football to cover up the country’s human rights record.

Will China ever be good at football?

China’s male soccer players perform poorly on the world stage. The Chinese men’s national team ranks 88th out of 210 teams, which is low for a country of this population size. The team has qualified for the FIFA World Cup only once, in 2002.

Byer, who previously held positions in Chinese youth football at the national level and at Beijing Guoan Football Club, says that “most people have no idea about youth development.”

While China focused on the elite level, its neighbor Japan targeted younger players. This “automatically increases the pool of elite players because the gap between the best and the least developed becomes smaller,” explains Byer.

Japan qualified for the FIFA World Cup for the first time in 1998, but has qualified for every competition since then. Other Japanese players play in the top leagues of Europe, the premier class of professional football. (After Wu Lei, there is currently no Chinese football player in the top European leagues. left the Spanish club Espanyol in August 2022.)

China is currently participating in the qualifiers for the upcoming 2026 FIFA World Cup, which will be held in Canada, Mexico and the United States.

Even China’s President Xi Jokes about his team’s performance. In November, after China’s team defeated Thailand’s team in a FIFA World Cup qualifier, told the Thai Prime Minister According to a post on the Thai government’s official social media accounts, Sretta Thavisin said that “a lot of luck was involved.”

“I’m not so sure about their level,” Xi said. “There are ups and downs.”