Why China Holds Lessons for Soccer’s Next European Super League

Chinese state broadcaster CTGN may have declared the scuppered plans for a European Super League (ESL) as an “own goal for football,” but, in fact, many Chinese soccer fans and broadcasters would have loved the ESL.

As the ESL proposal collapsed in less than three days, huge volumes of invective were addressed at the executives and club owners who had joined the plan. They were mercenaries, out of touch with fans. It was “the worst announcement in European football history,” said former Real Madrid president Ramon Calderon.

The hand-wringing suggested that top European football teams still belong to local supporters and earn their revenues from ticket sales and turnstiles. But, in reality, the big clubs long ago moved away from their working-class, flat cap origins, and are now corporately-owned assemblies of revolving millionaire players and managers, which earn the bulk of their revenues from TV rights deals.

Thanks to TV, European soccer is a series of global franchises that has reached out to fans and paying viewers all around the world. That’s especially true in China, where soccer is hugely popular, even if the local game is less than successful. (China’s men’s national team currently ranks 77th in the world, immediately below Curacao and just ahead of Panama.)

The hundreds of millions of spectators in the Middle Kingdom have historically made the China TV license deal the English Premier League’s (EPL) most valuable. So, while the ESL backers were accused of turning their back on supporters in England and continental Europe, they were arguably doing something right by their far more numerous Chinese viewers.

Further, with China in the economic ascent — China already boasts the world’s biggest cinema box office and its GDP is forecast to overtake that of the U.S. by 2027 or 2028 — the ESL plan makes sound financial sense from a franchise owner’s perspective. Soccer is one of the few areas in which Europe has a positive trade balance with China.

Many soccer industry analysts understand such economics, and predict that the idea of a ESL will be revived at a later date. Soccer’s world governing body FIFA previously threw its support behind other super league proposals in Europe (in defiance of Euro-soccer body UEFA), backed a U.K. restructuring proposal called Project Big Picture, and had also sought expansion of its existing World Club tournament.

But if it’s inevitable that China’s influence and financial clout are set to grow, the Chinese soccer experience also has many warning signs that can provide learnings for the next chapter of the sport.

Apparently dismayed by China’s lackluster performances, especially when the country has more bodies to call on than any other, Chinese President Xi Jinping previously called on sports bodies to develop soccer quickly and strongly. They were encouraged to believe that China could not only host the World Cup (played between national teams) by 2030, but even win it by 2050.

Many companies did Xi’s bidding and piled in billions of dollars to develop teams and build stadiums. They brought foreign managers such as Sven Goran Erikson, Bernd Schuster, Luiz Felipe Scolari and Rafa Benitez, and players including David Beckham, Oscar, Hulk and Dembe Ba to China to raise standards.

But matters got out of hand just a few years later: government ordered salary caps and quotas for foreign players in China (both approaches are familiar to China’s film and TV industries) as spending outran revenues and stadiums failed to be filled. Former players report that money was badly spent, while others say the Chinese game was simply too political.

Other Chinese companies such as Fosun International and Dalian Wanda bought equity stakes in European teams. But then the regulatory wind changed and overseas expansion by Chinese corporations was reined in.

That the local club competition, the China Super League (CSL)’s component members were not locally-rooted clubs, but franchises, among them many with debt-ridden real estate companies as owners and sponsors, made problems worse.

Now the CSL lies in tatters. Last year’s league-winning team Jiangsu collapsed in February 2021. Another big name, Liaoning, was disbanded last year. And more than 20 professional clubs have been kicked out of Chinese leagues in the past two years due to financial problems, according to state news agency Xinhua.

The sector’s earlier growth spurt also encouraged Chinese media groups to over-estimate and over-pay for rights to international soccer. Last year, the EPL cut off the match feed after Chinese streaming firm PPTV failed to honor its payments.

Rights were quickly relicensed to Tencent, a social media, games and entertainment giant that has a market capitalization bigger than any conventional U.S. media conglomerate.

But that wasn’t the first time a soccer rights deal in China went badly. In 2016 and 2017, tech and streaming firm Le Eco had problems paying for its supplies of EPL, CSL and Asian Football Confederation matches.

The lessons from China suggest that soccer was an industry that grew too fast, depended on favorable political winds, and had rocky finances. As global sports move from the pay-TV age to the streaming era, leagues old and new would be wise to pick their partners carefully, and to verify their financial bona fides long before kick-off.

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