Not-so super league

By Chen Dujuan Source:Global Times Published: 2012-11-14 18:30:05


Players of Dalian Shide Football Club salute their fans at their last game on November 3 in Dalian, Liaoning Province, where the club is based. Photo: CFP
Players of Dalian Shide Football Club salute their fans at their last game on November 3 in Dalian, Liaoning Province, where the club is based. Photo: CFP

China's soccer league is rarely lacking in newsworthy stories, and the latest hot topic is Dalian Shide Football Club, former champions of China's Super League which have been reduced to battling relegation and mounting debts.

It was announced earlier this month that the club will be bought by Aerbin Group, sponsors of rival city club Dalian Aerbin, for 320 million yuan ($51.30 million). Shide's former sponsors Shide Group reportedly face debts of as much as 12 billion yuan, and in late March the company's chairman Xu Ming disappeared, amid rumors that he was taken into custody by the authorities on suspicion of economic crimes.

It's not the first time the club has changed hands. It was sold by Dalian Wanda Group to Shide Group in 2000 and renamed Dalian Shide Football Club. Now the club faces an uncomfortable consolidation with Aerbin and the name of Shide will no longer exist in China's soccer circles.

What's in a name?

Unlike European soccer clubs that have fixed names regardless of their sponsors, Chinese soccer clubs always include their sponsors' names, so when the sponsors change, the club names change accordingly.

Name changes and even relocation of clubs have happened a lot in China since the country's soccer teams were restructured into professional clubs in 1994. One example is East China's Shanghai Pudong Club, which changed its name six times and relocated three times, and is now Southwest China's Guizhou Renhe Club. Among the 16 Chinese Super League clubs, only Beijing Guoan has never changed its sponsor and name.

Relying on single sponsors is one of the major problems among Chinese soccer clubs, Zhu Xiaodong, general manager of sports marketing agency Oceans Marketing, told the Global Times on November 7.

Clubs can get money from their sponsors, so they don't feel the need to work for their own survival, let alone build their brands, Zhu said.

But they face a miserable fate if their sponsors lose interest in the club or run into difficulties and have no money to spend on it, he said, noting that more and diversified sponsors are needed to avoid such risks.

Excessive dependence on sponsorship has led to the common phenomenon of losses among Chinese soccer clubs, Wu Lei, sports division general manager at advertising and media service agency Charm Group, told the Global Times on November 8.

Compared with profitable foreign soccer clubs, which earn 80 percent of their income from television broadcasting rights and match day sales of club-related goods, Chinese clubs heavily rely on advertisements and ticket sales, Wu said.

A report on the Super League's commercial value released in June by news portal NetEase Inc and Total Sports Marketing & Management Co said that 84 percent of Chinese soccer clubs' income from 2008 to 2012 came from advertising and 12 percent from tickets, with almost zero from broadcasting rights.

Besides the lack of income from television, Chinese soccer clubs do not have long-term strategies for their own operation and for cultivating their fans' consumption habits, Zhu said.

"There are so many people who like soccer, so there is a huge market," Zhu noted.

The NetEase report said that China has roughly 50 million soccer fans.

Burning money

Despite their relatively low income, many soccer clubs spend huge amounts of money. According to media reports, the 16 Super League clubs spent 3 billion yuan in total for the 2012 season, four times their expenditure in 2010.

The main area of expenditure is buying foreign players and paying them huge salaries. Shanghai Shenhua are paying former Chelsea striker Didier Drogba 12 million euros ($15.25 million) a year. Guangzhou Evergrande are paying Italian coach Marcello Lippi an annual salary of 10 million euros.

Chinese soccer clubs have become well-known in the world soccer industry for the huge salaries they offer, even though they often find it hard to make ends meet.

Despite its huge wage bill, Shenhua earns an annual income of just 2 million pounds ($3.18 million), according to a BBC report in May.

Real estate billionaire Xu Jiayin's Guangzhou Evergrande made a loss of 80 million yuan in 2011, having made a profit of 770,000 yuan in 2010.

But compared with Shenhua's relative failure in terms of marketing, Guangzhou Evergrande has won the league and gained wide media coverage in sports pages and even business pages for the company, Wu said.

Xu is not operating a soccer club, Wu noted, but a PR event in which the big names like Lippi help to enhance the brand of Evergrande around the world. Also, the promotion effect is much stronger than from advertising, said Wu.

Thanks to its soccer marketing, Evergrande has developed from a regional brand to a national or even internationally known brand, said Yan Qiang, deputy editor-in-chief of NetEase and co-author of the Super League value report.

New model needed

The Super League has proved popular with fans, with attendances of 18,800 on average for each game of the 2012 season, up from 17,600 in 2011.

But at the same time, the Chinese national teams have had little success. It is also worrisome that data released September 2011 by China Soccer Association showed that China only has 8,000 registered soccer players, compared with 50,000 in the much less populous Vietnam, 500,000 in Japan and 1.46 million in France.

Yan said the huge sums washing around the Super League have brought few positive effects in terms of the long-term development of soccer in China and he expressed his doubts about the league's continued appeal to sponsors.

"How long will people like Xu keep investing in soccer, and will he leave if he achieves his brand promotion goals? The market lacks a healthy long-term development plan to attract more capital," he said.

Chinese soccer clubs should become independent entities and try harder to make money, said Wu from Charm Group. They also need to pay more attention to their fans, who are their main consumers for tickets and products.

Wu also noted that China needs to cultivate young players and enhance soccer skills, as this would be the foundation for strong development in the long run.

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