Suning’s loss of Inter Milan caps China’s failure to dominate soccer

But China's ambitions have never taken off, and may be on the verge of collapse entirely.

On Wednesday, US-based asset management firm Oaktree Capital made the announcement it tookItalian football club Inter Milan announced that its Chinese owner, Suning Holding Group, failed to pay its debts amounting to 395 million euros ($429 million) on time. Suning had offered its stake in Inter Milan as collateral.

Suning's loss of ownership of Inter Milan is part of a wider exodus of Chinese companies exiting European football. Up to 20 European clubs It was owned by and major Chinese investors in 2017; Which dropped to just 10 by 2021.

Suning's forced exit from European football is a decade-long experiment in whether flashy, multi-billion-dollar deals targeting elite sports can flow through to build a true soccer-playing giant.

“Looking back, there aren't a lot of great examples of success,” says John Durden, a long-time Asian soccer correspondent. China's ownership of these European clubs has not resulted in huge investments or major victories on the field. Many Chinese owners sold their stakes in European professional clubs within years of purchasing them.

These large foreign investments in professional football have not translated into gains at home. The Chinese national team has not participated in the FIFA World Cup for more than two decades.

China's entry level is “broken,” says Tom Beyer, a soccer youth development consultant based in Tokyo, Japan, who has experience with the Chinese soccer system. “The biggest driver in football is culture, and there is no culture in China. Most Chinese families view football as a distraction for education, and they don't want their children to play.

“A superpower in world football”

Chinese football's performance is a major failure compared to the ambitious plans unveiled in the mid-2000s.

In 2016, Suning bought a 70% stake in Inter Milan in what was one of the Chinese companies' most high-profile forays into European football. In the same year, organizations such as the Chinese Football Association Make plans To transform China into a “superpower in world football”.

Other Chinese companies, with big money from the country's booming economy, have bought stakes in European clubs. Dalian Wanda Group Bought a A 20% stake in Spanish club Atletico Madrid in 2015, and Then I signed for five years Naming rights deal when Atletico moved to its new stadium in 2017. Fosun International Buyer English club Wolverhampton Wanderers in 2016.

Football fans at the time were not concerned about the club's new Chinese ownership. “Nationality is secondary. As long as the results are good, fans tend to put those concerns aside,” Duerden said.

Major corporations have also poured money into the Chinese Super League, the country's domestic soccer league. In 2010, China Evergrande Group – then one of the country's largest property developers, years before its collapse that led to the current real estate crisis – bought the Guangzhou Football Club. Since 2016, Evergrande has financed costly transfers of European-based players to China. Other owners of Chinese football clubs, including Suning, have also financed their own transfers from Europe.

At one point, CSL competes The biggest leagues in Europe in terms of money spent on transfers. The club spent 418 million euros ($453 million) in 2016 and 543 million euros ($589 million) in 2017, according to data from Transfermarkt, a soccer website that collects player transfer data.

But when things started to take off, the authorities put a stop to these ambitions.

Chinese Football Association Clubs required To reduce “irrational spending” on foreign players in 2017, as well as limit their presence in top-flight teams in order to support local talent. Three years later, in 2020, CSL acquired Order of the shepherds To remove their brand names from local clubs.

Then money got tight. Beijing's campaign to rein in excessive borrowing in the real estate sector has put Evergrande in a liquidity crisis. Government authorities took over The company's soccer stadium in late 2021. (Evergrande defaulted on its foreign debt by the end of the year.)

Suning, the former owner of Inter Milan, also faced a financial crisis. Group shares in one of Evergrande's subsidiaries It sank in value The parent company also collapsed. E-commerce rivals such as JD.com have also squeezed Suning's core retail business, limiting its ability to finance operations at its local club, Jiangsu Suning FC. The club Resolved ahead For the 2021 season, right after winning their first ever Chinese Super League title.

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

Suning made its name in retail, selling electronic devices in thousands of brick-and-mortar outlets. With revenues of $35.5 billion for fiscal year 2020, the Chinese company ranked 328th on luck'Global 500 list 2021.

That was the last time Suning appeared on the list, with revenue falling to $10 billion in 2022.

Who owns European clubs now?

Oaktree, in a statement shortly after its acquisition of Inter Milan, he said to her The initial focus will be to ensure “operational and financial stability.” The company plans to bring more Italian and European members to the club's board of directors. (At the time of Oaktree's takeover, people of Chinese descent made up more than half of Inter Milan's board of directors, including its president.)

The United States now has a greater presence in world soccer. Half the teams in the Premier League now have it Some level of US ownership. And Inter Milan now Seventh Club In the Italian Premier League to be owned by an American company.

Gulf countries have also begun buying clubs in major European 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 Emir of the United Arab Emirates, Sheikh Mansour, wins domestically and in Europe.

But some ownership stakes are controversial. Human rights activists and Some politicians Owns Criticize The takeover of Newcastle FC by the Public Investment Fund, Saudi Arabia's sovereign wealth fund, has been dismissed as “sportswashing”, or using football to help cover up the country's human rights record.

Will China become good at soccer one day?

China's male footballers perform poorly on the world stage. The country's men's national team ranks 88th out of 210 teams, which is low for a country of its population size. The team qualified for the World Cup only once, and that was in 2002.

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

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

Japan qualified for the FIFA World Cup for the first time in 1998, but has since qualified for all competitions since then. More Japanese players He plays In the major European leagues, the pinnacle of professional football. (There is currently no Chinese footballer in Europe's top leagues after Wu Lei He left the Spanish club Espanyol in August 2022.)

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

Even Chinese President Xi Jokes about him His team's performance. In November, after the Chinese team defeated Thailand in a FIFA World Cup qualifier, the Chinese president said He told the Thai Prime Minister Srita Thavisin said that “there was a lot of luck involved,” according to a post on the Thai government’s official social media accounts.

“I'm not sure about their level,” Shi said. “There are ups and downs.”