Manchester United exec Ed Woodward sees the newly-acquisitive Chinese Super League (CSL) as “another useful market if we are looking to sell players”. And the recent £20 million-plus deal that took Ramires to Jiangsu Suning, to the considerable benefit of Chelsea’s bottom-line, surely demonstrates that he is right.
But is this the full story? The experience of Liverpool, who appear to have been comprehensively outbid by the same Chinese club in their efforts to land Shakhtar Donetsk’s Alex Teixeira, strongly suggests it is not.
Actually, the basic laws of economics suggest as much too: the CSL’s new-found spending power constitutes a new source of demand for top-class footballing talent, and higher demand equals higher prices.
Not only that, it might mean higher wages too, if artful agents use actual or rumoured Far East interest to bargain for better terms for their Europe-based clients.
I even wonder, assuming this lavish Chinese team-building proves more than a flash in the pan, if it might put Europe’s Financial Fair Play (FFP) regime under more pressure. Here’s why.
I’m no expert in Asian club football, but it looks to me like Chinese clubs will not be able to finance these levels of spending out of football-related revenues.
A few months ago, Xinhua reported that the CSL had sold its broadcasting rights for the five years starting from 2016 for a record fee. But this fee was only 8 billion renminbi yuan, or $1.25 billion. That is to say, an average of $250 million a year, or $15-$16 million per club per season.
By way of comparison, the new domestic Premier League deal, covering three years from the start of next season, weighs in at some $7.4 billion, or nearly $2.5 billion a year. It will, moreover, be a long, long time before the CSL comes close to competing with the English top-tier in non-domestic markets.
Admittedly, Jiangsu Suning and Guangzhou Evergrande, who bought Jackson Martinez from part Chinese-owned Atlético Madrid in another recent high-profile deal, have both qualified for this year’s AFC Champions League.
But even though prize money for this year’s competition has apparently been increased, I read that the successor to reigning champions Guangzhou will receive just $3 million, with qualification from the group stage worth $80,000.
Obviously, prize money is not the only source of revenue from participation in Asia’s premier club football tournament. Even so, it looks like it would be a tough ask for Chinese clubs to compete with established European giants for top talent in the transfer market while also turning a profit.
One is drawn to the conclusion, therefore, that deep-pocketed owners such as the internet colossus Alibaba, which part-owns Guangzhou Evergrande, and the Suning Commerce Group, which recent bought Nanjing-based Jiangsu, changing its name from Jiangsu Sainty, may opt to subsidise their respective clubs for the sake of the brand boost that top-level footballing success might bring them.
This would be, in essence, not so very different from the situation, pre-FFP, that saw Chelsea post a loss of £140 million for the 2004-05 season.
The European winter market is now closed, although its Chinese counterpart remains open until February 26 (coincidentally also the date of the much-anticipated FIFA Presidential election).
Assuming a similar pattern to last season, the Chinese market will open again in late June for a bit less than a month.
What happens if the European elite then find they are being outbid, like Liverpool, for key summer transfer targets by Chinese buyers who are not subject to UEFA-inspired FFP regulations? My guess is there would be cries of “It’s not fair” and pressure to level up the playing-field. This could be achieved, evidently, by imposing a brand of FFP in both markets, or in neither.
At the very least, European clubs might find themselves racing to tie up deals for their most coveted new players comparatively early in the European transfer window.
This is just one more reason to expect a dose of inflation in player transfer fees this summer. I would not be at all surprised to see the world record broken, though not (yet) by a Chinese buyer.
David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics, the 2010 World Cup and London 2012. Owen’s Twitter feed can be accessed at www.twitter.com/dodo938.