After a long 997 days, the AFC Champions League ("AFC Champions League") play-offs again came to the green field of the Chinese Super League, Shanghai Harbor and Zhejiang team respectively in their own home field to face the Thai Super League. In the end, the Zhejiang team succeeded in breaking into the main round of the AFC Champions League, while the much-anticipated Shanghai Harbor team suffered an unexpected "Waterloo".
After the match, the two teams were met with very different evaluations. The rich and powerful Shanghai Harbor team, despite having a 100 billion dollar market capitalization and many sponsors, fell in front of the threshold of the AFC Champions League play-offs, while Zhejiang, after getting rid of its financial woes, stepped onto the AFC Champions League stage again after 12 years.
At the beginning of this month, it was reported that the Zhejiang team had not received any financial support from their two major shareholders, Greentown Group and Zhenneng Group, from this season so far. But before the AFC Champions League play-offs, they managed to solve some of the financial problems. Meanwhile, the Henan team, which is also in financial difficulties, has just finalized its share reform program.
In the last three years, Chinese fans will finally have the opportunity to witness the AFC Champions League at the home of the Chinese Super League (CSL), while more organizations will be focusing on this top Asian soccer tournament. So, can China's soccer market attract more money?
The "Leader" of the pack breaks its wings
On the evening of August 22nd, Shanghai was humid and hot after the rain, and people were in a hurry on the road. At the "White Jade Bowl" stadium near Jindian Road in Pudong, some fans were still reluctant to leave, having witnessed Shanghai Harbor's unexpected defeat to Thai Premier League's Pathum United in the AFC Champions League playoffs, the first time the team had lost to a Thai club in its history.
Inside the stadium, billboards of companies such as Shanghai Harbour Team's majority shareholder, Shanghai Harbour Group, and sponsor, SAIC Group, remain prominent. The AFC Champions League, the highest level of soccer tournament for Asian clubs, is also an excellent opportunity for corporate brand exposure.
Shanghai harbor
Fans in the team's home stands (photo by Xia Yuechao)
Oriental Wealth Network shows that SIPG and SAIC are both A-share listed companies with a market capitalization of 100 billion yuan, which are subordinate to the Shanghai State-owned Assets Supervision and Administration Commission (SASAC). The former is mainly engaged in container terminals and other businesses, while the latter is an automobile manufacturer. Eye on the sky shows that SIPG has invested in Shanghai Dongya Team (the predecessor of Shanghai Harbor Team) since 2014 and is currently a wholly-owned shareholder of Shanghai Harbor Team.
Data from the annual report showed that Shanghai Harbor Group's net attributable profit for 2022 and 2021 will be 17.224 billion yuan and 14.682 billion yuan, respectively, a year-on-year increase of 17.31% and 76.74%. However, in the first quarter of this year, Shanghai Harbor Group's operating results showed a large decline, with net attributable profit and revenue of 3.551 billion yuan and 7.649 billion yuan, respectively, a year-on-year decline of 35.37% and 38.38%, respectively.
In the performance decline at the same time, Shanghai Harbor Group's executives have also undergone major changes. According to the announcement released by Shanghai Harbor Group on August 1, Yan Jun submitted an application for resignation due to work reasons, and at the same time resigned from the board of directors under the position of chairman of the Budget Committee. After his resignation, Yan Jun will no longer hold any position in Shanghai Harbor Group.
However, less than half a month later, "Clean Shanghai" public number issued a circular, Shanghai China Maritime Museum, deputy director of Yan Jun suspected of serious disciplinary violations, is currently accepting the Shanghai Municipal Commission for Discipline Inspection Supervisory Committee disciplinary review and supervision investigation. It is understood that the briefing Yan Jun and the former president of Shanghai Harbor Group Yan Jun is the same person. And is currently accepting the Central Commission for Discipline Inspection of the State Supervision Committee in the State General Administration of Sports Discipline Inspection and Supervision Group and Hubei Provincial Supervisory Committee review and investigation of the former Chairman of the Chinese Football Association, Deputy Secretary of the Party Committee, Chen Xuyuan, served as Secretary of the Party Committee in the Shanghai Hong Kong Group, Chairman of the Board of Directors and other positions.
Shanghai Harbor team's main sponsor SAIC Group's performance in the first quarter of this year is average. The data in the quarterly report show that SAIC Group realized net profit of 2.783 billion yuan, down 49.55% year-on-year; realized revenue of 145.916 billion yuan, down 20.03% year-on-year. SAIC explained in the quarterly report, the company was affected by the competition in the automobile market in the first quarter, the company's profitability level continued to be under pressure.
As of August 22nd, Shanghai Harbour Team is currently leading the 23rd round of the Chinese Super League with 53 points after a slightly lackluster performance in their last three matches, with only two losses and one draw. However, the Chinese Super League "leader" just lost to Batang United, which ranked eighth in last season's Thai Super League, and many fans find it difficult to accept such a result, not to mention that Shanghai Seaports also has shareholders and sponsors with hundreds of billions of dollars in market capitalization, and its lineup is the most luxurious of all the teams in the Chinese Super League at the moment.
Shanghai harbor
The team lost 2-3 to Baton Rouge United (Photo by Xia Yuechao)
According to the German transfer market website China administrator (hereinafter referred to as the "German transfer") on June 26 this year announced the 2023 Chinese Super League player price, the highest player price for Shanghai seaport team's foreign aid Oscar (7.5 million euros), the second is Wuhan Sanzhen team's Stanciu (5.5 million euros), the third is Shanghai seaport team's Vargas (5 million euros). Vargas (5 million euros). In terms of total club value, Shanghai Seaport ranked first with 22.83 million euros, Wuhan Sanzhen ranked second with 16.95 million euros, and Shanghai Shenhua ranked third with 13.13 million euros.
Zhejiang team which just got out of financial difficulties
Meanwhile, Zhejiang, who played in the AFC Champions League play-offs alongside Shanghai Harbour, hosted Thai Harbour, also from the Thai Premier League, and eventually collected a win to advance to the AFC Champions League main round after 12 years.
That night, the stands at the Huzhou Olympic Sports Center were packed, and the enthusiasm of the fans was high. According to relevant media reports, the average attendance of the Huzhou Olympic Sports Center in the past was only 8,000 people, while the number of fans in the stands exceeded 15,000 people for the match with Taikang on that day.
Just a short while ago, there was even concern about whether Zhejiang would be unable to play in the AFC Champions League play-offs due to financial difficulties.
According to the report of Qianjiang Evening News on August 15, earlier this month, there was news that from this season to date, the Zhejiang team has not been the two major shareholders of the capital investment. Zhejiang team can only through various ways to fight for funds to maintain the daily operation of the club. Even so, the lack of major financial support for the club is still struggling.
According to the above media reports, after communication and coordination, one of the main shareholders of the Zhejiang team Zhenneng Group agreed to pay a fee in advance to solve the team's current financial problems.
Zhejiang team intelligence group blogger had released a video on August 9, showed that: previously plagued the Zhejiang team's financial problems have been effectively resolved and progress can ensure that the Zhejiang team can participate in the AFC Champions League as well as to complete this year's league, more programs are being promoted.
Eyes on the sky shows that the Zhejiang team was founded in 1998, the team's current two major shareholders are Greentown Real Estate Group Limited (50% shareholding) and Zhejiang Energy Group Limited (50% shareholding). The former is a real estate private enterprise, listed in Hong Kong is Greentown China. The latter is an energy company, subordinate to the State-owned Assets Supervision and Administration Commission of Zhejiang Province, which has three A-share listed companies such as ZJN Power, Ningbo Marine Transportation and Zhejiang Xinneng, and one Singapore-listed company, ZJN Jinjiang Environment.
The data in the annual report showed that Greentown China realized net attributable profit and revenue of 2.756 billion yuan and 127.153 billion yuan in 2022, and despite the 26.85% year-on-year growth in revenue, the net attributable profit declined by 38.33% year-on-year. Greentown China explained in its 2022 annual report that it mainly accrued a net exchange loss of 1.371 billion yuan due to the depreciation of the renminbi and an impairment loss of 1.502 billion yuan on non-financial assets based on changes in the market environment.
In addition to the two major shareholders, the Zhejiang team's main sponsors include Panasonic and Toshiba Air Conditioning, and its official partners include 28 companies such as Fuxing Fuel, Dongfang Rainbow, and Germany's Grohe.
International Financial News reporter on the reasons for the lack of funds for the Zhejiang team and when to invest new funds and other issues to the Zhenneng Group mailbox to send an interview letter, but as of press time, there is no response. Previously, the Zhejiang team had responded to the reporter in the mail, said that due to the preparation of the AFC Champions League play-offs, can not reply in time.
The German transfer data show that the Zhejiang team's latest team price of 8.05 million euros, only more expensive than the Shanghai seaport team's Oscar a 550,000 euros, temporarily ranked eighth in the Chinese Super League team price list.
How the soccer economy is bouncing back
With the exit of Shanghai Harbour, only Wuhan Three Town, Shandong Taishan and Zhejiang will participate in the group stage of the AFC Champions League proper this season. According to Der Spin data, the current value of all Chinese Super League teams ranks fifth in the Asian Football League with only 146 million euros, with the Saudi League coming in first with 321 million euros.
Located in the West Asian region of the Saudi Arabian League is following the Chinese Super League once "gold dollar soccer", C Luo, Neymar, Benzema, Mane, Firmino, Kante, Fabinho and other well-known stars who once played in the five major leagues in Europe have one after another by the Saudi Arabian League team "burning money! "This has attracted the attention of many fans and sponsors.
Zhang Xiaobing, executive president of Cofontaine Investments, said in an interview with the International Finance Daily that the Saudi league attracts European stars to join by paying high salaries in order to increase the league's visibility and competitiveness, while attracting more fans and investment to promote the development of local soccer.
However, Zhang Xiaobing believes that this is the same as the Chinese Super League's "golden dollar soccer", there will be the risk of instability. At present, the Saudi Arabian league is supported by all kinds of luxury funds, and the world's top players have joined the league. From the perspective of the future operation of the league and the eye-catching performance of the matches, it should achieve very good results and achievements. However, if the league is unable to maintain stable and sustainable financial operations, it may also lead to the emergence of subsequent shortages of funds and other problems.
The Chinese Super League, which was once also full of superstars, is now facing financial difficulties for some teams. Some media people claimed in February this year that Shanghai Harbor may be the only team in the Chinese Super League that does not owe money. According to Soccer News, Henan team has continuously encountered financial problems since last year, the club's daily maintenance relies on independent investment, financing and ticketing, etc. It was not until recently that the share reform program and financial solutions were determined.
"The financial difficulties of the Chinese Super League teams may be due to the lack of effective financial planning and management by some teams, and may also be due to changes in the domestic economic situation and changes in the investment market." Zhang Xiaobing believes. In addition, he said the relatively low visibility and attractiveness of China's national soccer clubs may also lead to a lack of interest from investors.
In fact, compared with Asia, the European soccer economy with five major leagues and many stars is more active. Jiang Han, senior researcher of Pangu think tank, told reporters that the European soccer economy has many advantages and characteristics, including deep culture, complete industry, mature market, rich resources, advanced technology and so on. This all provides a good environment and conditions for the European soccer market, making European soccer have an important position and influence in the economic, cultural and social aspects.
"The soccer market can be one of the major forces driving economic recovery because the soccer industry has a wide industrial chain and great commercial value, which can bring economic benefits to a number of fields. The business practices of investing in the soccer market include sponsorships, advertisements, ticket sales, broadcasting rights purchases, player transfer deals, and so on. But such investment may also face some bubble risks." Jiang Han said.
Zhang Xiaobing also believes that the soccer market can produce significant results in creating jobs, improving regional economic development, and promoting international trade and cultural and leisure tourism. However, there is also the risk of bubbles, investors need to have sufficient financial planning and risk management capabilities, while the need for scientific assessment and decision-making based on the latest market demand trends in order to minimize the risk and seek to maximize the return as much as possible.
