Text | Zhao Xueyi Li Wenshan Li Yucheng
The next home of Guangzhou Football Club (hereinafter referred to as "Guangzhou Team") seems to have an eyebrow. On January 17, Guangzhou Pharmaceutical Group published information on a recruitment website to recruit football management talents with an annual salary of 500,000-600,000 yuan. As soon as the news came out, it triggered speculation that Guangzhou Pharmaceutical Group took over the Guangzhou team, and Li Chuyuan, chairman of Guangzhou Pharmaceutical Group, said in an interview with the media that he intended to get involved with Guangzhou football again.
In this regard, an informed source of Guangzhou Pharmaceutical Group told the Securities Daily reporter that two state-owned enterprises of Guangzhou Pharmaceutical Group and Guangzhou Automobile Group may take over 50% of the equity of Guangzhou Team, but the plan is still under discussion. The relevant person in charge of GAC Group told reporters that if there is a suitable opportunity, GAC Group does not rule out continuing the leading edge with Guangzhou football in an appropriate form.
Who did the Guangzhou team spend?
Guangzhou Pharmaceutical and GAC may each hold 50% of the shares
According to the recruitment advertisement of Guangzhou Pharmaceutical Group, in 2022, Guangzhou Pharmaceutical Group will continue to pay attention to the needs of Guangzhou Football and fully mobilize corporate resources to provide strong support. In order to make Guangzhou football industry get faster, stronger and more professional development, the company recruits football management talents for the world, including professionals in competitions and markets, requiring 5-7 years of work experience, salary of 500,000-600,000 yuan / year, and the work content includes business development, responsible for club access, player registration and transfer, etc.
It is worth noting that this salary level is among the top of all the positions released by Guangzhou Pharmaceutical Group. As of January 17, the highest salary of the 1,202 positions on the recruitment website of Guangzhou Pharmaceutical Group was the general manager position of the subsidiary in Xi'an, Shaanxi and Nanning, Guangxi, reaching 450,000 yuan to 600,000 yuan per year. This shows that Guangzhou Pharmaceutical Group attaches great importance to football management positions.
Li Chuyuan, chairman of Guangzhou Pharmaceutical Group, publicly stated at the 12th Party Congress of Guangzhou on December 27, 2021 that Guangzhou Pharmaceutical Group intends to reunite with Guangzhou football in 2022. Wang Laoji, a brand of Guangzhou Pharmaceutical Group, also launched a vote on Weibo on December 28 last year to solicit netizens' opinions on the choice between "Guangzhou Team" or "Guangzhou City Team", which attracted about 11,000 votes as of January 3, 2021.
Although Li Chuyuan revealed the information that Guangzhou Pharmaceutical Group has returned to the football circle, Li Chuyuan said that there is no specific measure for Guangzhou Pharmaceutical Group at present.
In fact, Guangzhou Pharmaceutical Group has a deep relationship with the Guangzhou team. According to public information, as early as October 1984, Guangzhou Baiyunshan Pharmaceutical Factory signed a contract with the Guangzhou Municipal Sports Commission to jointly organize the Guangzhou football team on the condition of sponsoring 200,000 yuan per year, setting a precedent for the national enterprise to undertake sports teams. In 1989, Guangzhou Baiyun was expanded to become a football club. At the beginning of 2006, Guangzhou Pharmaceutical Group acquired 90% of the shares of the team, established Guangzhou Pharmaceutical Football Club, and won the first league championship in the history of the team's professional league in 2007.
"Securities Daily" reporter contacted The Guangzhou Pharmaceutical Group to ask whether it has decided to join the Guangzhou team, as of press time, the Guangzhou Pharmaceutical Group has not made any response.
However, the reporter exclusively learned from the informed sources of Guangzhou Pharmaceutical Group that Guangzhou Pharmaceutical Group is likely to take over the Guangzhou team, and at present, Guangzhou Pharmaceutical Group is discussing with Guangzhou Automobile Group whether to take over the Guangzhou football team together, and the plan may be that Guangzhou Pharmaceutical and GAC each account for 50% of the equity, but this plan is still under discussion.
The relevant person in charge of GAC Group told reporters: "Football is a very mass-based sport in the world, which can provide a good communication platform for enterprises to carry out marketing activities. Guangzhou has a strong football atmosphere, Guangzhou citizens love football, and GAC also sponsored the Guangzhou team in 2010. Therefore, if there is a suitable opportunity, GAC does not rule out the possibility of renewing the frontier with Guangzhou football in an appropriate form. ”
Star shareholders come in and out
Where does the Guangzhou team go
Looking back at the history of the Guangzhou team for nearly a decade, there is no shortage of heavyweight investors.
At the beginning of 2010, Evergrande Group bought out all the shares of Guangzhou Football Club for 100 million yuan, and Guangzhou Pharmaceutical Group withdrew from Guangzhou Football. Public information shows that after Evergrande took over, Guangzhou team ushered in a brilliant decade, from 2010 to 2019, Guangzhou team won 8 Chinese Super League championships, 2 FA Cup championships, 4 Super Cup championships and 2 AFC Champions League championships, becoming one of the most successful professional football clubs in China and even Asia.
In 2014, Alibaba invested 1.2 billion yuan in Guangzhou and won 50% of the club's shares. In November 2015, Guangzhou's Taobao was listed on the New Third Board, becoming the first stock in Asian football, with a reference market value of more than 20 billion yuan. In addition to Alibaba, the star shareholders of the Guangzhou team have also included well-known enterprises such as Gold Mantis, Guangtian Group, and Keshun Shares.
However, from the operational level, under the continuous large-scale investment, the operating income of the Guangzhou team cannot cover the business costs such as transfer costs and player salaries, and has been in a loss-making operation situation since 2013. From 2017 to 2019, financial data show that the Guangzhou team lost 987 million yuan, 1.829 billion yuan and 1.943 billion yuan respectively, and the losses expanded year by year; the net cash flow from operating activities was -433 million yuan, -1.583 billion yuan and -2.220 billion yuan, respectively, and the cash outflow continued.
Taking the worst loss in 2019 as an example, although the main business income of the Guangzhou team increased by 29.85% year-on-year to 783 million yuan, the operating cost was as high as 2.406 billion yuan, which was 3.07 times the operating income. In terms of income, nearly 60% comes from evergrande real estate.
As of the end of the first half of 2020, Evergrande Real Estate and Alibaba held 56.71% and 37.81% of the shares of the Guangzhou team respectively, and the assets of the Guangzhou team were 2.151 billion yuan, the total liabilities were 7.354 billion yuan, and the net assets were -5.203 billion yuan, which was insolvent. On March 10, 2021, ST Guangzu (delisted) was delisted in a low profile. As the shareholder Evergrande Real Estate fell into a liquidity crisis, the Guangzhou team was also facing the dilemma of where to go.
In fact, not only the Guangzhou team, as the real estate industry is strictly regulated, the Chinese Super League, which is jokingly called the "real estate league", has also been impacted, and the ability of many Chinese Super League teams to continue to operate is questionable. In February 2021, after winning the first Chinese Super League championship in the history of the team, Jiangsu Suning announced its dissolution. With the debt restructuring at the level of Huaxia Happiness Group, the future of Hebei team has also been cast a shadow. Recently, the Shenzhen team has also been rumored to be looking for new investors, and its current sponsor Kaisa Group was recently caught in the storm of financial default of affiliated companies.
Shen Meng, executive director of Chanson Capital, said in an interview with reporters that the football club is not a money-making project, but it is a sign of local social development, so there will be the emergence of the phenomenon of "real estate football" when the economy is good. At this stage, the real estate industry is affected by continuous strict macro-control and no longer has the ability to invest in football projects, and local governments will not let iconic sports projects fall, so there is a lot of news about the transfer of football clubs.
Bai Wenjia, chief economist of IPG China, told the Securities Daily reporter that maintaining a football team is actually very expensive, which is impossible for housing companies in financial crisis to continue to bear. Later shareholders should take steps towards commercialization in order to make the club healthy and sustainable.