A football club in the Chinese Super League has been sold to a local property developer at an equity valuation of more than $800 million (€750 million), suggesting it is worth more than European giants such as AC Milan and Atlético Madrid.
The high price put on Beijing Guoan, the top team in the capital, underlines the investment surge in football in China, despite recent efforts by the government to crack down on what it called "irrational" spending on foreign players.
Sinobo Land, a little-known property developer, is buying 64 per cent of the club for 3.6 billion renminbi from current owner Citic, a state-owned investment group, giving it a valuation of Rmb5.6bn (€756 million).
That would rank Beijing Guoan among the 15 most valuable clubs in Europe, according to estimates of enterprise value by KPMG.
Football industry analysts said that the premium paid for the club, which finished fifth in last season’s CSL, could not be justified based on its sporting performance or immediate commercial prospects.
Unrealistic
"This would seem to be an excessive and unrealistic valuation," said Simon Chadwick, a professor of sports business at the University of Salford in the UK. "It is not even the biggest or best club in China, let alone the world."
But Mr Chadwick said that Beijing Guoan, which attracts about 40,000 spectators to each match at the Workers Stadium, has the potential to grow into a leading Asian team thanks to its large support base and its location.
Chinese investors have pumped several billion dollars into football over the past two years, buying up European teams, importing leading international players and managers into the CSL and acquiring sports rights and marketing agencies.
The push was prompted by Chinese president Xi Jinping, who has called for a sporting revolution to turn China into a respected football nation that can qualify for the World Cup, host it and eventually win it.
The Chinese government, which is concerned about capital outflows at a time of slowing economic growth, recently sought to rein in some of the excesses in the CSL, with the state-controlled football association bringing in new restrictions on foreign players and transfer fees.
Mr Chadwick said this was more a question of good housekeeping rather than halting the investment flow.
“There has been a great deal of hype about China’s bubble bursting but it’s actually the sound of knuckles being rapped by the state,” he said.
– (Copyright The Financial Times Limited 2017)
