“Big Money Policy” Cannot Save Chinese Football

(Source: CFA)

“At the moment when I have to say goodbye, I have regrets and owes in my heart for our broken dreams and my players,” Li Weifeng, the coach group leader of Tianjin Tianhai (previously called Tianjin Quanjian), wrote on this Weibo on May 11th. One day later, Tianjin Tianhai officially announced their withdrawal from professional football due to unresolved debt and a financial crisis.

The shakeup of Chinese professional football continued. The aftershock happened on May 23rd, when Chinese Football Association (CFA) announced that 11 additional clubs, including Liaoning, one of the strongest clubs in the country, were disqualified from the 2020 season of Chinese football leagues due to wage arrears. Many commenters claimed that this wave of financial crisis indicated the failure of the “big-money policy” of Chinese football.

In the past ten years, with the rapid growth of China’s economy and the government support for sports related policies, many ambitious entrepreneurs decided to jump into the football field, including the investor of Tianjin Tianhai, Tianjin Quanjian group. In 2015, Quanjian took over Tianjin Songjiang, a club playing in the Chinese League One, the second-tier professional league. Instead of building a pyramid from the base to raise a local-based football community and construct a youth training system, Quanjian copied the Evergrande model, spending lavishly to bringing in experienced Brazilian coach Vanderlei Luxemburgo, international players Luís Fabiano, Jádson Rodrigues da Silva, and Chinese national team player Zhao Xuri. In the following years, Quanjian introduced Belgian national team player Axel Witsel and the 2016-2017 Bundesliga Bronze-boot winner Anthony Modeste to China with hefty salary offers.

Quanjian almost succeeded. In its debut season of the Chinese Super League, Quanjian cruised to the 3rd place and became qualified for the 2018 Asian Champions League next year. In 2018, Quanjian eliminated its “role model” Evergrande out from the ACL and advanced to the quarter-final. If the plan had been ongoing as expected, Quanjian would have become the second Evergrande — receiving all possible titles and becoming a national hero. However, the story ended in December 2018, when the Quanjian Group was accused of illegal multi-level marketing and false advertisement. After the arrest of club leader and Quanjian Group owner Shu Yuhui, the club asked the local Football Association to take over operations and changed its name to Tianjin Tianhai one month later. After losing the financial support from Quanjian, the club was soon hit by the debt crisis.

The collapse of Quanjian happened due to non-football issues, but the club operation itself was also full of unprofessionalism. Neither Witsel nor Modeste completed their contracts and both went back to Europe in 2018. They would rather lose half of their salaries and even go to trial than stay in Tianjin for one more year. The alarm bell of the big-money policy has been ringing since that moment, but unfortunately, few people took the warning seriously until now, when the virus destroyed people’s last illusions.

No one can deny Evergrande’s success. However, it also drives the whole industry out of control by pushing it into a ruthless money competition. In 2019, Evergrande invested almost 3 billion yuan in football. However, its football-related income was only 300-million yuan, including all sponsorships, ticket revenue, broadcasting shares, and derivative product sales. Ironically, the income of Evergrande was the highest among that of all clubs. Other smaller clubs, especially those that are playing in the lower-tier leagues without broadcasting income, were doing way worse. Without the abundant funding support from their parent groups, football clubs are effectively unable to operate as independent entities in China and their destinies are tightly linked to overall economic conditions. What Chinese football has to face now is that its spending-earning ratio has been over the range most investors can afford. When Quanjian went into a debt crisis, the club did proactively search for solutions, even considering the option of finding a new owner. Quanjian was even willing to transfer the club for free. However, no one took the deal.

China is not the only country whose football industry is suffering from the financial crisis this year. Due to the impact of the virus, many clubs are struggling, including many world-famous teams. One of the reasons why many European countries were searching for reopening leagues is money. “If Bundesliga did not reopen, over half of teams would go bankrupt,” said the Chairman of FC Bayern München Karl-Heinz Rummenigge. If even teams in Bundesliga, recognized as the most financially healthy league in the world, are standing on the brink of bankruptcy, how can Chinese clubs survive with their vulnerable cash flows?

Chinese Football Association has taken note of the crisis and started to take actions to drag the whole market back to financial sustainability. In its announcement regarding the disqualification of eleven clubs for the next season, CFA underscored its hope that “clubs at all levels could pay attention to long-term planning and rational management, so they can protect the legitimate rights and interests of players, coaches and staff, and therefore promote professional football to achieve sustainable development.” CFA president, Chen Xuyuan, also voiced his focuses on creating a financially healthy environment for Chinese football since his inauguration last year. “Our clubs can barely achieve sustainable development. The owners have invested a lot but earned little back, and this could be detrimental to Chinese football.” In 2019, CFA reiterated the salary-cap for the Chinese Super League and contained the post-tax salary of international players under $3.3 million. In comparison, Oscar, the ex-Chelsea player, used to earn $25 million annually from Shanghai SIPG.

Athletes’ career length is usually limited. Most of them retire in their early 30s and they have to consider making enough money to support the rest of their lives. Because of this, many talented footballers decided to come to China where they were offered double their domestic salaries. It is obvious that the implementation of the salary cap will stop many superstars from coming to China, but it is a must-take step for the long-term development of Chinese football. At the moment, some athletes benefiting from the high salaries, do not provide comparable performance. Last year, Shanghai Shenhua signed Shaarawy, who was playing for Rome, with a $18-million annual salary. However, he only goaled once in ten Super-League games, much lower than what was expected of him. Additionally, because international forwards were pouring into the league, there was less room for growth of Chinese local forwards. Escaping from blind worship of international superstars, clubs will be able to lower down their spending sharply, spare budgets for raising local talent, nurturing football culture in communities, which will benefit the whole system in the long-run.

Investors can quit professional football easily, but athletes cannot, especially those who are at the early stage of their professional career. After Tianhai was dismantled, Li Weifeng has been busy connecting his players with other clubs for trial training opportunities to maintain those kids and their parents’ confidence in football. The wave of quitting does not only affect Chinese football’s present, but also strikes Chinese football’ future. “Would you send your kids to play football if the risk of the team being dismantled was continuously high?” Li Weifeng asked the reporter in his recent interview regarding the dismantling of Tianhai.

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