Jack Ma And Xu Jiayin Become Megapowers of Chinese Football As Alibaba Buys 50 Percent Stake In Evergrande
Alibaba founder Jack Ma is no expert on football, but the extreprenuer knows a good investment when he sees it as his company sealed a $192 million deal to claim 50 percent of Chinese Super League champions Guangzhou Evergrande. The deal was announced by Ma and Evergrande boss Xu Jiayin on Thursday in Guangzhou.
It was reported on this site last month that Ma was looking at buying a stake in fellow CSL side Hangzhou Greentown as Alibaba is based in the city located in Zhejiang Province. However, after a meeting between the two billionaires, the deal was hashed out in a mere matter of days.
There is speculation as to the reason behind the deal, with one news report stating that Alibaba’s investment is more about building a national brand than doing good business.
“Most, if not all, professional sports teams lose money, and anybody who buys into them isn’t doing it as a money making proposition,” said Doug Young, a professor at the Fudan University Journalism School. “Evergrande is looking for someone to share the misery with them in terms of having to subsidise the team, and the reason Alibaba is doing it is for the local relationships and publicity.”
While Alibaba has bought 50 percent of the reigning AFC Champions League winners, the investing may not stop there as in the same press conference Xu mentioned that he intends to bring in 20 more shareholders.
This news has without a doubt brought shockwaves throughout Chinese football as two of China’s wealthiest businessmen have joined forces to make Evergrande into the super club that the country has never seen in its fledgling professional league.
However, there has to be concern as to how this partnership — and future investors in the team — will affect the level of competition in the league.
With Alibaba coming on board, Evergrande will have even more financial power to attract top players inside the country as well as from abroad. This could lead to casual fans losing interest in the league as it would just be a one-team race.
The Scottish Premier League with Celtic and the German Bundesliga with Bayern Munich are currently the two best examples. While neither are not at fault for what has happened in their respective leagues — Celtic losing the challenge of Glasgow rivals Rangers as they were relegated to the lower leagues and Bayern having no teams in the league to match their financial prowess — there has been no remedy to the problems.
The CSL will need to find solutions in due time to ensure that the league remains competitive for all teams or there could be the chance fans see Evergrande dominate for many years to come.
Links and Sources
- Reuters – Alibaba buys half of Chinese soccer club for $192 mln
- BBC – Alibaba buys half of Guangzhou Evergrande football club
- Tech Crunch – Alibaba Buys 50% Stake In Leading Chinese Soccer Team Guangzhou Evergrande
- Wall Street Journal – What Alibaba’s Soccer Team Purchase Says About Chinese Real Estate
- Global Times – Giants joining hands may thwart real progress in China
- Quartz – Alibaba bets that Chinese soccer will evolve beyond corrupt mediocrity