2020 CSL champions Jiangsu Suning, after struggling financially for a while, announced that they were shutting down football operations last week, sending shockwaves across the country. The problem shouldn’t be such a big shock and it’s time for the Chinese FA to do something about it.
This is not the first time that we have seen disbanded teams; indeed, it has become a pre-regular season activity over the last few years in Ligue 1 and 2. The breakup of Tianjin Tianhai last year was an uplifting tale of a team flying too close to the sun, but it could be glossed over on the grounds of ownership. illegal activity. This season outside of Jiangsu, another team from Tianjin, this time around Teda, also seems to be disappearing.
Although there is a lot of vomiting about the situation in Jiangsu, to call it the worst thing that has happened to Chinese football is either shortsighted or ill-conceived, it may not be the worst thing that has happened. produce this year (arguably that would be if China fails to advance to the next stage of World Cup qualifying). Of course, the disappearance of last year’s league champions will be a story that the foreign media will pick up on and cause Chinese football to lose some “face”, but it is much less serious for the powers that be and fans (outside of Jiangsu at least).
So why did this happen? Suning was struggling financially in 2019 and things got worse during the COVID era. While I sided with PPTV, the Suning-owned streaming service, over the English Premiership when they faced each other in early 2020, in retrospect this was one of the first public signs of their financial problems. Since then, PPTV has lost a number of broadcast rights, most recently Serie A and CSL. In September, there were widespread rumors that Jiangsu players were refusing to train to protest unpaid salaries, which the club quickly denied. These rumors continued to escalate in October as the club were on the verge of winning the league playoffs.
Coincidentally, it was around the time Suning qualified for a final against Guangzhou Evergrande that Suning the company agreed to waive repayment of a $ 3 billion loan to a troubled Evergrande Corporation. As Suning’s other sporting investment, Inter Milan are in pole position to win Serie A for the first time in a decade. It should be happy days in Nanjing, but Suning’s financial woes and China’s currency controls mean the company is also looking for suitors for the pearl in its rapidly crumbling crown.
Unfortunately for Jiangsu fans, Suning’s pride meant that a number of contenders were rejected at the end of 2020 because they did not meet Suning’s assessment of the club. In the last few weeks before the breakup announcement, Suning was prepared to sell for free to anyone willing to take on the debt, which amounted to around $ 90 million. At that time, no one was willing to take over.
Financially, Chinese football is a giant toilet that club owners just throw money away. Although the books have never been opened to the public, it is widely believed that no top-flight team has ever been run with a profit. There’s a reason most clubs are owned by state-owned enterprises or corporations with a very strong chairman, board of directors, or shareholders who would run screaming at the idea of investing in football. Chinese. Ownership also comes with a certain degree of political caching and can help win the favor of local or national leaders and have them benefit from local government support / grants, but when losses continue to pile up as The saying goes, “A billion here, a billion there, and soon you’re talking about real money.”
The squeeze caused by a business downturn made worse by COVID, meant their investments in sports were unsustainable and the money had to be focused on key companies.
Chinese football is obsessed with having clubs with enduring identities (despite new naming rules ignoring old traditions). Executives often refer to European teams as what they are looking for, but their focus is all wrong. Chinese professional football is not even 30 years old, the 100+ year old clubs they focus on in Europe have gone through many struggles, mergers and changes in their early years to get to where they are today. . A Manchester United or Bayern Munich didn’t just start where these clubs are now.
When Guangzhou Evergrande started ten years ago, their spending created a bubble which only exacerbated as other teams chased them. We have seen wages increase in the CSL faster than ever and before action was taken in 2019 the speed at which this was happening was incredible.
How to deal with the situation? Pressing the CFA for a salary cap is a good idea that is unlikely to produce the desired results, a fairly common problem with CFA policies. The best teams are so used to spending that it won’t lead them to reign over their spending, instead they will just find ways around them (bonuses, gifts, apartments, employing family members on paper, etc. .).
So how do we get everyone to play by the rules? Blow it up. It might sound drastic, but that’s what was supposed to happen in the early 2000s when Jia A became the Chinese Super League. Unfortunately this was only a minor rebranding, for CSL 2.0 it has to be much more drastic.
CSL salaries are 10 times that of the Korean league and almost four times that of Japan. This has to change for teams to have a chance to be profitable. Completely renegotiating the salaries of all players is probably a way to lead to the problems mentioned above, so I suggest starting from scratch, with clubs having to bring in new foreign players and a draft of all domestic talent to decide the teams (As an American, I don’t like bringing American elements to non-American sports, but it will be a one-time thing). Players from a club’s youth academy still with that team could stay, as well as players who have spent 10 years or more with a team to maintain elements of a club’s identity.
The profit sharing of the TV rights deal and sponsorship is expected to remain with one exception, the league-wide kits deal is set to end. While in theory the league-wide deal with Nike promotes fairness for all teams, Nike has only focused on big city teams and has completely ignored large swathes of the league. , including teams with decent-sized fan bases. Allowing these clubs to sign with other producers could mean they earn more from their deal, as smaller brands want to be associated with a CSL team and could also mean more product in stores for fans.
The hard cap and the new rules may cause some sponsors to want to pay less because you won’t have so many big-name foreigners in the league, but that shouldn’t lead to a major reduction in proceeds on the pitch. Chinese clubs that make the effort have been rewarded by finding young gems in South America, there is no reason why it should stop. The competition will ideally focus less on the initial money and more like the old days, on the quality of a team’s scouting and, above all, on its ability to develop young talents.
As teams slowly move towards profitability, aided by the frenzy of new stadiums set to open ahead of the 2024 Asian Cup and beyond, the cap can be raised and potentially a designated player rule can be added like MLS. did so, allowing clubs to recruit. a high level foreigner.
Of course, this proposal is not without its flaws, but continuing to do the same thing will continue to lead to the same results. Losing three top teams in two years is just too much. While it’s possible to explain what happened in many of these cases, until CSL’s sides can go into the dark (or even approach breakeven point), it will continue to happen. because there are a limited number of companies that have the level of investment. must own a CSL club and are willing to lose tons of money every year. One of the potential benefits of the new neutral naming rules is that consortium ownership may become more common and losses will be spread more acceptably, but the key is finally to burst the bubble and find a new one. approach. I’m concerned that the CFA salary cap doesn’t go far enough to bring things back to reality.