The owner of English Premier League champions Manchester City is heading a takeover of the Chinese soccer club, Chengdu-based Sichuan Jiuniu as part of a strategic foray into the country's rapidly growing soccer market.
City Football Group (CFG), along with UBTECH, the Shenzhen-based AI and robotics company that is a sponsor of Man City, and the investment company China Sports Capital have announced the joint purchase of the Chinese club, which plays in China League Two with a home-crowd capacity of just 27,000.
The deal is being seen as part of CFG’s programme of buying soccer clubs around the world and nurturing talent, as well as revenue. Apart from Manchester City, CFG now owns, or has strategic investments in, six other clubs, including the US Major League Soccer side New York City FC, and Melbourne City FC in Australia.
According to the FT.com, buying sides in China’s leading division, the Chinese Super League, was looked at by CFG, but executives were dissuaded by the high valuations at the top Chinese clubs, which have been spending lavishly to attract leading European players to gain overseas attention.
CFG is following an alternative strategy, reports the FT, of investing in a smaller club to make it successful, and at the same time using it as a portal to discover new top talent among China’s vast population.
Ferran Soriano, Chief Executive Officer of City Football Group said in a statement, “China is an extremely important football market, which we have been focused on for some time. We believe strongly in the future of football in China.”
He added that buying Sichuan Jiuniu was a “natural extension of existing activities” for the group, which, the FT says, believes that collective ownership of selected clubs can generate greater revenue and discover and develop player talent more efficiently.
However, critics have cited this strategy as one that aims to get around the Financial Fair Play rules, which are designed to cap spending by European clubs and prevent them investing beyond their means.
The FT quotes a person familiar with the Sichuan Jiuniu deal as saying “single digit millions” of pounds had been paid for the club. Forbes reported that, as of the middle of last year, Manchester City was worth approximately $2.474 billion.
Sourced from City Football Group, Financial Times; additional content by WARC staff