Chinese Retailer Suning Purchases Controlling Stake In Italy’s Inter Milan Amidst China’s Ongoing Overseas Football Investment Boom
- Posted by Christopher Ledsham
- On 8th June 2016
- football, overseas investment, sport, Suning, Xi Jinping, Zhang Jingdong
Nanjing-based retail giant Suning Commerce Group announced on Monday 6th June, 2016 that it has acquired a 69% controlling stake in Italian football club F.C. Internazionale Milano (commonly referred to as Inter Milan) for USD 307 million. Following the buyout of other top European clubs by wealthy investors from a number of countries such as Russia, the UAE and the USA, [tweetable]Suning’s purchase of a majority share in Inter makes it the first high-profile European club to be predominantly Chinese-owned[/tweetable].
Suning purchased 40% of Inter from former majority shareholder Indonesian businessman Erick Thohir, who retains a 30% stake, as well as the whole of ex-club president Massimo Moratti’s 30% share. Suning Chairman Zhang Jindong, a renowned football fan, declared his company’s purchase to be a “strategic move”, informing the media at a press conference at the company’s headquarters that “[ours] is an international business and our brand will soon be big in Europe too.”
As has been the case with many similar investments in top European clubs by wealthy overseas backers, Zhang has pledged to infuse both capital and resources into Inter Milan, which has underperformed in recent seasons. With a personal net worth of USD 5.5 billion, Zhang was ranked on Forbes’ 2015 “The World’s Billionaires List” as the 13th richest person in China and the 205th wealthiest in the world.
Before investing in the club, Suning bought out Nanjing club Jiangsu F.C. (now Jiangsu Suning F.C.) in December 2015 for USD 80 million and proceeded to twice break the Chinese player transfer record in the following weeks by purchasing European-based Brazilian stars Ramires and Alex Teixeira for USD 32 million and USD 56 million respectively.
The same winter transfer window also saw other wealthy Chinese clubs such as Heibei China Fortune F.C. (bought in January 2015 by China Fortune Land Development Co. Ltd.) and Guangzhou Evergrande Taobao F.C. (co-owned by Alibaba and Evergrande Real Estate) invest a total of USD 336 million on player transfers, much of which was spent on acquiring marquee players from the European leagues. This figure dwarfed the English Premier League’s USD 289 million transfer outlay during the same period and even exceeded the USD 240 million spent by clubs in the other top four European leagues (Germany, France, Italy and Spain) combined.
While European football has been a well-established area of investment for wealthy overseas enthusiasts looking to keep up with their peers while broadening their asset portfolios for a number of years, China’s sudden financial interest in the sport can be traced back to Xi Jinping’s rise to power.
A well-known football fan, Xi is determined to raise his country’s international standing, by turning China’s lowly-ranked national men’s team into an international superpower and ultimately creating a domestic Chinese sports economy worth USD 850 billion, twice its current global value. This programme will also see 50 million children becoming involved in playing the game, as well as the establishment of 20,000 training academies and 70,000 pitches by the year 2020.
As has been seen in a wide range of industries during its economic rise, China is looking to achieve its footballing ambitions by turning its attention overseas and looking to invest heavily in both acquiring assets in other countries, as well as bringing international talent to China so as to gain knowledge from the best in the global game.
Whilst a number of aging or lesser-known foreign players and coaches have been drawn to Chinese football for a number of years, the takeover of an elite European “brand” such as Inter Milan and the sudden ability of wealthy Chinese clubs to prise top players away from their European counterparts serves as an example of an eastwards shift of power away in yet another premium global industry.
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Sources: Forbes, TIME, The Wall Street Journal, Quartz