Recent news has revealed that Guangzhou Football Club has once again postponed its assembly date, not for the first time, and the fate of the club's future has become a hot topic of discussion among fans. The general view is that the Guangzhou team will not be disbanded, but the question of whether the Evergrande Group will continue to invest in soccer is still up in the air. Looking to the future of Guangzhou soccer, it is still an open question.
However, this is not just a crisis for Guangzhou. The severity of Evergrande's crisis is not only related to the enterprise itself, but also closely related to the overall downturn of the real estate industry. The crisis brought by the real estate industry is not only a problem faced by Evergrande itself, it may trigger a wider chain reaction, for example, a large number of real estate investors withdrawing from Chinese soccer, leading to the overall crisis of Chinese soccer.
Therefore, timely intervention is crucial. More importantly, a solid foundation for the healthy development of Chinese professional soccer clubs will be laid through the introduction of clearer policies.
Investors (real estate companies) in Chinese Super League clubs are facing a crisis, and Evergrande is undoubtedly in the spotlight, but for Chinese soccer, Evergrande's crisis is just the tip of the iceberg. Most of the soccer clubs invested by real estate companies are facing serious or relatively serious crises.
As we all know, Evergrande led the "Golden Dollar Era" of the Chinese Super League (CSL), winning seven consecutive titles and the AFC Champions League in the 2013 and 2015 seasons. In the past ten years, they have won eight Chinese Super League titles and two Asian Champions League titles.
Evergrande's investment in soccer was once very successful, Evergrande's enterprises also grew rapidly in the process, and its demonstration effect attracted more real estate enterprises to enter China's soccer, which made China's professional league comprehensively enter the "real estate league era".
There are currently up to 10 real estate-led clubs among the 16 clubs in the Chinese Super League, including Guangzhou Evergrande, Guangzhou R&F, Shenzhen Jiazhaoye, Shanghai Shenhua, Beijing Guoan, Dalian People's Republic of China, Wuhan Zhuoer, Hebei Huaxia Happiness, Henan Jianye, and Cangzhou Lions.
In addition, the investors of Shandong Taishan and Changchun Yatai are also partially involved in the real estate industry. The remaining four clubs, Chongqing Liangjiang Athletic and Qingdao, have encountered serious difficulties, with the former's diversification and reform program advancing slowly and the latter's urgent need for diversification and reform, with the existing investors no longer able to support the normal operation of the Chinese Super League, and, as for Tianjin Jinmen Tigers, they are currently in a custodial situation.
Look at the 10 real estate soccer clubs, Guangzhou team and its investor Evergrande Group's situation we all know very well, Hebei team and its investor Huaxia wonderful situation has been reported many times before, in which Huaxia wonderful encountered difficulties even more than Evergrande, this year March after the establishment of the debt committee of the Huaxia wonderful, the club can no longer get support from the group, forced to sell players in order to survive.
Among the current real estate business investors in Chinese Super League clubs, Wanda and Jia Zhaoye are in a relatively optimistic position.
Wanda has benefited from the previous contraction of investment, and the mid-year report of Jiazhuangye 2021 shows that its debt ratio has declined for eight consecutive years since 2017. As for other real estate investors, due to the interaction of multiple factors such as real estate regulation, epidemics, and natural disasters, according to current reports, there are either minor or serious crises, for example, the originally very stable Jianye, due to the double impact of epidemics and floods, there are large economic losses.
Of these 10 clubs, only 2 have carried out diversified reforms: Henan Songshan Longmen Club, Jianye and Zhengzhou and Luoyang side to cooperate, to realize the "433 equity structure" of diversified reforms and mixed ownership reforms; Cangzhou Lions Club, Yongchang and Cangzhou side to carry out mixed ownership and diversified reforms.
Back to the Evergrande crisis, the Guangzhou Football Club does not go so far as to dissolve, whether the club is trusteeship or diversified reforms, the eight Chinese Super League titles and two Asian Championship titles brought by this team are heavy honor, a thick history that should not be easily erased.
However, there are a number of possibilities as to how Everest will act:
Firstly, to continue to operate the club with Evergrande as the main player, which is relatively unlikely at present; secondly, to transfer the right to operate the club and retain only part of the shares, which is relatively likely; and lastly, to withdraw from the club altogether, with the club undergoing a complete diversification reform, which is also a certain possibility.
In fact, the survival of the Guangzhou team is not too much of a problem, on the premise of not being disbanded, it is only the difference between better or worse conditions of survival in the future. However, Evergrande's stay or go is likely to trigger a chain reaction.
After irrationally high investment, many soccer clubs have become the burden of real estate investors. Even though the CFA has pushed forward the salary restriction policy in order to protect the clubs, the situation has not essentially changed. In the past, a real estate enterprise, a year out of 2 billion into the soccer club, the eyebrows do not even with a wrinkle, because not bad this money, but now a real estate enterprise, out of 600 million into the soccer club, I am afraid that the heart began to drum, there are also particularly serious crisis of the club, has not been able to give the club blood transfusion.
However, these real estate investors do not quit soccer easily for various reasons, one of which may be sentimental; the other is to avoid market panic; and the third is to worry about other consequences.
Early 2021, Suning resolutely quit, the matter of right and wrong is not good to comment, but for Chinese soccer, really "opened a bad head". "Suning-style withdrawal" is to withdraw directly from the league way out of soccer.
If Evergrande also eventually exits at the end of 2021, the presence of Suning in front and Evergrande behind will most likely trigger other real estate companies to follow suit.
The reason is very simple, the deep feelings for soccer, but also can not withstand the brutal economic reality, more importantly, Suning and Evergrande's influence is large enough to have them initially, most of the other real estate companies will be able to quietly sneak away without having to worry about the panic of the market, but also do not have to worry about the consequences of other things, after all, the sky has fallen there is a taller person on top of it.
Now that is a very scary situation.
For Chinese soccer, this Evergrande crisis may also seriously affect youth training. Some sources show that the Evergrande football school has also carried out different degrees of layoffs. Ten years of trees, a hundred years of trees, Evergrande football school just 9 years there will be changes, is bound to have a greater impact on the youth training.
The reality of the current Chinese Super League clubs is that in the case of financial constraints, the youth training funds are likely to be the first to be cut, and in the context of the crisis, the clubs don't have a lot of heart to do youth training. If the panic withdrawal mentioned above eventually occurs, it will be a fatal blow to the youth training of Chinese soccer.
Panic exits may not necessarily arise, as they arise under the precondition that there is no necessary regulation or intervention and that they are left entirely to the free choice of firms, which is unlikely, with the relevant state interventions in place.
In the past few years, the country has an overall level of thinking in the development of soccer, the work of the league, advocating diversified reform and mixed ownership reform, and youth training to the integration of sports and education as a breakthrough, trying to school soccer on the basis of youth training is also gradually integrated into the education system, both practices have an ultimate goal: to make the work of the league more stable, so that the youth training system is more stable in order to cope with the current "real estate football dominance", "work clubs do not sustain the investment in youth training" unstable situation. The current unstable situation of "real estate soccer is dominant" and "work clubs do not invest in youth training".
Now look, to prevent panic withdrawal of real estate investors, in addition to the work carried out, it may be necessary to provide the necessary guidance and direction to these real estate investors, within the scope of their ability, as far as possible to continue to invest, and beyond the scope of their ability to continue to club the survival of the club through other means of support, and thus to buy time for the diversification and mixed ownership reform.
The core and bottom line of this approach is to eliminate "Suning-style exits" to the greatest extent possible.
Of course, more important is the guiding policy: for example, to encourage and support high-quality central and local state-owned enterprises to invest and participate in soccer clubs and youth training, the stability of these enterprises will greatly enhance the stability of the league. In fact, this has been a national level initiative, but now the environment, it is necessary to introduce a more clear and specific guiding policies, to provide policy support to promote the development of professional soccer around the world.
More importantly, this is not just for the CSL, but for the entire Chinese soccer working league. After all, nearly 30 clubs have withdrawn from China's professional leagues over the past three years or so, and only by establishing a stable, diversified and mixed-ownership-based league system is it possible to maximize the stability of the league.
As far as the development of Chinese soccer is concerned, the best league structure is "mixed": of course, the league can be based on mixed ownership, but it also needs a single state-owned club, a single private club, a diversified private club or a diversified state-owned club, and in this way, the Chinese professional league will be able to balance stability and vitality. In this way, the Chinese professional league will be able to balance stability and vitality, and the multiple modes will contrast and motivate each other, ultimately realizing the simultaneous improvement of the league's quality.
On the contrary, "real estate soccer a dominant" or "one-size-fits-all mixed ownership reform" is not the best way, the former is too little stability, the latter is prone to lose vitality.
