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China Digest | Chinese Grand Prix secured until 2020

China Digest | Chinese Grand Prix secured until 2020

By: Mark Dreyer

Daniel Ricciardo of Red Bull Racing signs autographs ahead of the Chinese Grand Prix in Shanghai (Getty Images)
3 Oct 2017
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Weekly round-up of sports business news from the Chinese sports industry.

Chinese Grand Prix secured until 2020

Formula One has agreed a three-year extension for the Chinese Grand Prix, which will see Shanghai continue to host the race until 2020.

After running uninterrupted since 2004, the race was in serious doubt after organisers had been unable to secure an extension following the 14th edition of the event in April, with word that negotiations on a renewal might not open until the end of the year.

But in addition to this extension, F1 has proposed moving the race one week later in the calendar, which, if approved by the FIA’s World Motor Sport Council, would see the 15th edition of the race no longer coincide with China’s Qingming three-day national holiday.

On the surface, that might seem like a curious decision, but the annual ‘tombsweeping’ holiday is when families typically pay respects to their ancestors, and so organisers are clearly hoping that avoiding this mini break in 2018 will mean more fans can attend the race.

Anta signs up for Beijing 2022

Chinese sportswear company Anta has become the latest sponsor of the 2022 Winter Olympics, serving as the official sports apparel partner for the Chinese team.

It is the third straight Olympic cycle that Anta has kitted out the Chinese squad, while also sponsoring 13 of the country’s national winter sports teams.

During a lengthy TV segment that was broadcast on China’s state broadcaster CCTV earlier this year, Chinese President Xi Jinping – widely seen as the most powerful Chinese leader in decades – famously wore an Anta jacket while touring some of the venues for the Winter Olympics, an extremely rare endorsement by a Chinese leader.

Anta is headquartered in the southeastern province of Fujian, where Xi served from 1985-2002, the last three years as Governor.

Since starting its marketing programme in February, Beijing 2022 has also added Bank of China, Air China and dairy conglomerate Yili Group as official partners.

AC Milan owner seeks funding help

Li Yonghong, the Chinese businessman in charge of AC Milan, is “looking for one or more investors to share the financial burden”, according to a Reuters report, which cited two sources.

Rossoneri Sport Investment Lux, a consortium led by Li, bought the club from former Italian PM Silvio Berlusconi in a €740m ($865m) deal earlier this year, but needed funding from US private equity fund Elliott to complete the deal after Li’s initial backers pulled out under pressure from the government, due to a crackdown on overseas M&A deals.

In a summer spending spree that raised eyebrows around the world, AC Milan, which lost €75m in 2016, spent €230m on players, putting them behind only Paris St Germain and Manchester City

The report suggests Li could consider a Chinese market listing, securing additional Chinese investors and refinancing the group’s debt with either Goldman Sachs or Merrill Lynch.

Overseas deals proceed despite crackdown

Meanwhile, a second Reuters report says Chinese outbound deals gathered pace in the third quarter, amid hopes that a previous crackdown on overseas deals might be softening.

Analysts quoted in the story said that improving underlying economic conditions had lessened the need to restrict capital outflows – one of the major reasons behind the government-led block on outbound deals.

After a string of overseas deals in recent years that has seen Chinese investment in close to 30 European soccer clubs, headlines earlier this year suggested future moves would be blocked, even as clubs such as Reading and Southampton continued to be acquired.

But investors are now anticipating further signals at China’s 19th Party Congress, which begins later this month, as the major political event may indicate how tolerant of overseas deals the government will be in the future.

CSL club chairman now China’s richest man

Xu Jiayin, chairman of CSL club Guangzhou Evergrande, is now China’s richest man, according to a Time story that calls Xu “the Donald Trump of China” due to his “lavish purchases and zealous acquisition strategy”.

Xu has made $31.9bn so far in 2017 – more than anyone else on the planet – taking his total net worth to $39.3bn.

Xu’s China Evergrande real estate group has seen its stock price soar in recent months due to a debt restructuring plan as it aims to relist in Shenzhen from its current Hong Kong listing.

Guangzhou Evergrande remains on course to clinch a seventh straight league title, powered in large part by some successful foreign signings, but earlier this year Xu – also referred to by his Cantonese name Hui Ka Yan – announced his goal for the club to have an all-Chinese squad by 2020.

Fears of obesity epidemic

A number of reports in recent days have focused on childhood obesity, with one study warning that as many as 50 million Chinese schoolchildren could be overweight by 2030 if nothing is done to constrain this alarming trend.

However, as China looks to promote healthy living among its massive population and mandates compulsory sports in schools, one university in Tianjin has told students they must pass a physical fitness test before they are able to progress to the next academic year, urging students to master two or more sports and “get off the internet, get out of the dormitory and get into sports halls”.

That piece of positive fitness news, though, is offset by a Xinhua report that cites a school’s athletic records remaining unbroken for 40 years as evidence that the level of sports in schools is deteriorating. 

Also this week…

Further reading…

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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