Guangzhou soccer once again adjusted the rally day, which is not the first time. Fans focus of attention, undoubtedly focused on the future of Guangzhou soccer. The general view is that Guangzhou soccer will not easily exit, but whether Evergrande continues to invest in soccer, but full of variables. Guangzhou soccer's future direction, is still an unknown.
Evergrande crisis, not a family of difficulties. Its seriousness is not only from the enterprise itself, but also closely related to the overall downturn of the real estate market. The crisis is not unique to Evergrande, but is a challenge faced by the whole industry, and may even spread to the whole Chinese soccer.
Policy intervention should not be delayed and clearer policies should be introduced to lay a solid foundation for the development of professional soccer in China.
Chinese Super League club investors (real estate companies) facing a crisis, Evergrande is undoubtedly the focus. But for Chinese soccer, Evergrande crisis is just the tip of the iceberg, many real estate enterprises invested in soccer clubs have suffered a serious crisis.
Evergrande had led Chinese soccer into the golden dollar era, winning seven consecutive titles and the 2013 and 2015 AFC Champions League. In the past 10 seasons, Evergrande has won a total of eight Chinese Super League titles and two AFC Champions League titles.
Evergrande's investment in soccer was once successful, and Evergrande's enterprises also rose rapidly during this period. The demonstration effect of Evergrande attracted more real estate enterprises to enter China's soccer, and China's professional league fully entered 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 City, Shenzhen Jiazhaoye, Shanghai Shenhua, Beijing Guoan, Dalian People's Republic of China, Wuhan Zhuoer, Hebei Huaxia Happiness, Henan Jianye, and Cangzhou Lions.
In addition, investors in Shandong Taishan and Changchun Yatai are also partly involved in real estate. The remaining four clubs, Chongqing Liangjiang Athletic and Qingdao, are facing serious difficulties, with the former's diversification and reform program advancing slowly, the latter's urgent need for diversification and reform, the existing investors are no longer sufficient to support the normal operation of the Chinese Super League, and Tianjin Jinmen Tigers are in a custodial status.
Among these 10 real estate soccer clubs, the situation of Guangzhou team and its investor Evergrande Group is well known, and the situation of Hebei team and its investor Huaxia Wonderful has been reported many times before, in which Huaxia Wonderful suffered even more difficulties than Evergrande, and after the establishment of the Debt Committee of Huaxia Wonderful in March this year, the club could no longer get support from the group, and was forced to sell its players to survive.
Among the current investors in Chinese Super League club real estate companies, Wanda and JIA Zhaoye are in a relatively optimistic position. Wanda has benefited from the previous investment contraction, and Jiazhaoye 2021 interim results report 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 the relevant reports now, there are either minor or serious crises, such as the originally very stable Jianye, which has suffered a large economic loss due to the double impact of epidemics and floods.
Of these 10 clubs, only two have carried out diversified reforms: Henan Songshan Longmen Club, Jianye and Zhengzhou and Luoyang parties to cooperate, to realize the "433 shareholding structure" of the diversified reforms and mixed ownership reforms; Cangzhou Lions Club, Yongchang and Cangzhou parties to carry out mixed ownership and diversified reforms.
From the current situation, Jianye Group has some losses, but Henan Songshan Longmen Club is still relatively stable.
Back to the Evergrande crisis, Guangzhou Football Club does not go to the point of bankruptcy, regardless of whether this club is trusteeship or diversified reforms, this team has brought eight Super League titles and two Asian Champions League titles, is a heavy honor, is a thick history, should not be easily killed.
However, there are multiple possibilities as to what Evergrande will do: one, to continue to operate the club with Evergrande as the main player, which is relatively low now; two, to hand over the right to operate the club and retain only part of the shares, which is still relatively high; and three, to withdraw from the club altogether, with the club undergoing a complete diversification of the reforms, which is also a certain possibility.
In fact, how the Guangzhou team survives is not too big a problem, under the premise of not going bankrupt, it is only the difference between better or worse conditions of survival in the future. However, Evergrande's going or staying is likely to trigger a chain reaction.
After the irrational investment, many soccer clubs have become the burden of real estate investors. Even though the CFA has pushed forward the salary limitation policy to protect the clubs, the situation has not changed fundamentally. In the past, a real estate company, a year out of 2 billion spent on soccer clubs, not even with a frown, because not bad money, but now a real estate company, out of 600 million spent on soccer clubs, I'm afraid that the heart began to beat the drums, but also the crisis is particularly serious clubs, has not been able to give the clubs blood transfusion.
But these real estate investors are not going to quit soccer easily, for a variety of reasons, one of which is perhaps sentimental; the other is to prevent market panic; and the third is fear of other outcomes.
At the beginning of 2021, Suning did not hesitate to quit, the rights and wrongs of this matter is not good to comment, but for Chinese soccer, really "a bad start". "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 worrying about the panic of the market, but also do not have to worry about other results, after all, the sky has fallen there is also a tall man on top of it.
Now that is a very scary situation.
For Chinese soccer, this Evergrande crisis also has the potential to seriously affect youth training. Some sources show that the Evergrande football school has also carried out a certain degree of staff reduction. 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 a situation 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 much heart to do youth training. If the panic flight mentioned above eventually occurs, it will be a fatal impact on the youth training of Chinese soccer.
Panic flight may not necessarily occur, as it arises from the prerequisite that there is no necessary regulation and intervention, and that it is left entirely to the free choice of firms, which is unlikely, with the relevant state interventions in place.
In terms of 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 point, trying to school soccer on the basis of the gradual incorporation of youth training into the education system, both of which have an ultimate goal: to make the work of the league more stable, so that the stability of the youth training system, in order to cope with the current unstable situation of "real estate football dominance", "work clubs do not sustain the investment in youth training". At present, the unstable situation of "real estate soccer is dominant" and "work clubs do not invest in youth training".
Now look, in order to prevent panic flight 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, as far as possible within the scope of their ability to continue to invest, beyond the scope of their ability to continue to club the survival of the club through other means of support, which in turn, in order to buy time for the reform of diversification and mixed ownership system.
The core and bottom line of this approach is to eliminate "Suning-style exits" as much as possible.
Of course, more important is the guiding policy: for example, to encourage and support 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 clearer and more explicit guiding policies, to provide policy support for the promotion of professional soccer development in all parts of the world.
More importantly, this doesn't just correspond to the CSL, but to the entire Chinese soccer professional league. After all, nearly 30 clubs have quit the Chinese soccer professional league in the past three years or so, and only by establishing a stable league system based on diversification and mixed ownership is it possible to ensure the stability of the league to the greatest extent possible.
As far as the development of Chinese soccer is concerned, the best league structure is "mixed": of course, this league can be based on mixed ownership, but it is also necessary to have a single state-owned club, a single privately-owned club, diversified private clubs or diversified state-owned clubs, and only in this way can the Chinese professional soccer league balance stability and vitality. In this way, the Chinese professional football league can take into account stability and vitality, and the multiple modes can contrast and encourage each other, so as to realize the simultaneous improvement of the league's quality in the end.
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 unstable, the latter is prone to lose vitality.
