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China Digest | Regulator targets sports investors; fat footballers; motorsport calendar weakens; and more

Weekly round-up of sports business news from the Chinese sports industry.

Sports investors targeted by financial regulators

China’s banking sector was shaken last week with reports that the government has asked banks to assess credit risks linked to firms active in overseas dealmaking – with some buyers of sports assets specifically highlighted. While the troubled Anbang Insurance Group and the HNA Group, whose meteoric rise has puzzled many observers, drew the majority of attention of those mentioned by the China Banking Regulatory Commission, others under scrutiny include Wolves owner Fosun, Wanda – which has been acquiring properties throughout the global sports sector – and the newly-formed unit of the Sino-Europe Sports group that recently bought AC Milan. The reasons behind the regulator’s move are still unclear, but a Bloomberg report said the government “may be sending a signal of its commitment to cleaning up the financial system before a key Communist Party leadership reshuffle later this year.”

European football investments continue

Despite the turmoil surrounding some previous acquisitions, Chinese investment has still been pouring into European football. The Desports group, which bought Granada last summer and was recently rumoured to be close to buying clubs in England and Belgium, has turned its attention to Italy, buying a 60% stake in Serie B club Parma, which is recovering from a bankruptcy two years ago.

Meanwhile, Guangzhou-based agency 5USports, which has previously promoted John Terry in China, has bought a 60-per-cent stake in English League One side Northampton Town.

Elsewhere, news has been circulating that Mike Ashley was looking to offload Premier League club Newcastle United to a Chinese party, but for now it’s only his shares in Glasgow Rangers that have been sent east. Former Morgan Stanley banker and Hong Kong businessman Julian Wolhardt has invested £1m to buy half of Ashley’s shares with fans' group Club 1872 buying the rest. Wolhardt has professed his “love for Scotland and football”, although one suspects his stated desire “to see Rangers FC unlock its considerable commercial potential” might be more significant.

NGBs: Football moves and table tennis furore

Potentially significant moves have been taking place within China’s sports administration, with Du Zhaocai appointed assistant director of the General Administration of Sports (GAS) and also becoming Secretary of the Party Committee of the Chinese Football Association, effectively joining Cai Zhenhua at the top of Chinese football’s governing pyramid.

But it’s in table tennis where the sparks have really been flying, with the top three players in the world – all Chinese, of course – simultaneously pulling out of the China Open in Chengdu in protest at the removal of coach Liu Guoliang. Liu had been removed from coaching duties and appointed vice chairman of the Chinese Table Tennis Association, but seeing as he joins 18 others with the same title, it’s a ceremonial move at best. The background comprises a complex tale of friendships and political rivalries, but some reports have connected Liu’s ousting with the fate of his good friend Kong Linghui, the former women’s national team coach, who was recently suspended for having racked up sizeable gambling debts.

Motorsport hosting under pressure

Asia’s role in Formula 1 is looking increasingly shaky with the Singapore and Chinese Grands Prix both marked as ‘provisional’ on next year’s calendar. With the Korean race ending in 2013 after a short four-race run and Malaysia also ending its contract early, it’s more important than ever that the few remaining races in east Asia secure their futures. But with China’s contract negotiations only just beginning and no firm broadcaster in place after the recent withdrawal of LeSports, it remains possible – if still unlikely – that the Shanghai race may not continue after this season.

In electric car series Formula E, Hong Kong retains its place as the opening race of the calendar, but there are no other Chinese races despite three other new locations being added for next season. With significant investment in the series from China Media Capital (CMC) and SECA, whose boss Li Sheng is on the board of Formula E Holdings, it had been thought the series might make a return to the mainland after holding its maiden race in Beijing in 2014.

Youth football team could enter German league

The German FA says China's under-20 national team could enter its fourth-tier league southwest division as a guest team, enhancing China’s preparation for the Olympic U23 tournament in 2020. Following a government-level agreement at the end of last year, which now appears to have had more significance than the many memorandums the Chinese FA has signed with other counterparts around the world, German media have reported that each team in the regional league would receive €15,000 from the Chinese FA in order to play two matches against the U20 side, but the results of those games would not affect the league table.

New series to take Taekwondo global

The World Taekwondo Federation – whose name will soon be changing – has announced a new China-backed elite series, which will launch in December. The Shanghai Jijin Investment company will provide the money behind a new Grand Slam Champions Series based in the city of Wuxi, which aims to package taekwondo as a product for global TV audiences.

NFL expects regular-season game in China

The NFL has re-affirmed its commitment to staging a regular-season game in China, with the league’s China MD Richard Young telling AFP that it’s a matter of when, not if, during a visit to China by New England Patriots quarterback Tom Brady. It was reported last year that the San Francisco 49ers had been set to face the Los Angeles Rams in Beijing in 2018, but the league appeared to back away from that prospect in recent months. Young conceded there were still several logistical difficulties, but said he thought a game would still happen “down the road”.

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The China Digest is written by Mark Dreyer, who runs the China Sports Insider website, which features sports business news and analysis related to China’s fast-growing sports industry. He has worked for Sky Sports, Fox Sports, AP Sports and many others, and has covered major sporting events on five continents, including three Olympic Games. He has been based in China since 2007.

 

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