How difficult is it to hold on to a traditional Chinese Super League team?
In June 2023, between the excitement of the Champions League, Argentina friendly matches and the village super league, I noticed the news that Beijing Guoan, a veteran team of the Chinese Super League, was banned by FIFA due to a transfer dispute. And the origin is simply because Guoan owes 500,000 euros in the final transfer payment.
The operational difficulties of Chinese Super League clubs are nothing new, but it is hard to imagine that a Chinese Super League giant such as Beijing Guoan would now worry about 500,000 euros.
For me, most of the familiar A-A teams when I first started watching football as a child have disappeared into history, and even some names I have begun to forget. Therefore, the difficult situation encountered by Beijing Guoan this time still made me feel a lot of regret and emotion.
[How much money does a Chinese Super League team have to spend?] 】
As we all know, it is unlikely to make money doing football in China, at least not directly through football. But how much money is invested each year to run a Chinese Super League club, because most of the team's financial reports are not public, ordinary fans have no way of knowing for a long time.
However, in the Jin Yuan era, Guangzhou Evergrande Club, as a listed company, must publish its annual report, which gives the public the opportunity to find out. According to the 2018 annual report, Evergrande's revenue, including tickets, league sharing and advertising sponsorship, reached 630 million yuan, operating costs reached 2.43 billion yuan, and a loss of 1.8 billion yuan.
Considering that 59.27% of the revenue comes from related parties within the group, if the "self-sponsorship" part is included, it can basically be regarded as Evergrande's net investment for the club in 2018 of about 2.16 billion. At the height of the Golden Yuan era, the investment of the top of the Chinese Super League was so exaggerated.
A few years later, the Football Association began to demand a gender-neutral name change. In order to keep the name "Guoan", CITIC listed and transferred its club shares to Sinobo Group. According to the requirements of the property rights transaction, the 2020 financial report of the Beijing Guoan Club was also made public during this process.
According to the report, Guoan's operating income in 2020 was 103 million yuan, and the operating profit was -1.221 billion yuan. At that time, the Chinese Super League was affected by the epidemic and changed to a conference system, and the club had no ticket revenue at all, and other aspects were also affected to varying degrees. However, the enthusiasm of major companies to invest in football has also begun to cool, and this figure still has some reference value.
Combined with my exchanges with some club staff, it can basically be considered that most of the teams in the Chinese Super League in the Golden Yuan era have their own hematopoietic capacity of 100-200 million per year, and the cost is 10-2 billion. In other words, smashing 1 billion a year is the "starting price" of the Super League that year.
But we all know that this money throwing has not lasted. Affected by the epidemic, real estate enterprises and other environments, coupled with a series of cooling measures by the Football Association, the investment scale of the Chinese Super League has rapidly decreased, and wage arrears have become the most important news category. There are also many clubs that have either disappeared into the crowd or reorganized into lower divisions, and the Chinese Super League has ushered in a big reshuffle.
According to my understanding, the operating budget of each team in the Chinese Super League in 2023 is relatively low, and I hope to compress the net investment to 20-50 million yuan, and the top is about 3-500 million yuan.
This is basically the ebb and flow of the Golden Dollar Super League, and the maintenance of a club requires the investment of the parent company. There is now a lot more a return to rationality than in previous years, but it is still quite far from breaking even or even making a profit like the European club.
In the development of professional football in China, Beijing Guoan is one of the few clubs that has basically participated in the whole process and witnessed several ebb and flow. Sinobo Group, the current wholly-owned shareholder, has entered the market since the beginning of 2017, and has also experienced the prosperity and end of the Golden Yuan era.
When the news of the transfer ban at the beginning of the article came, curious, I picked up a calculator to calculate how much money they had spent on Guoan over the years.
【How much did Sinobo spend】
Sinobo Group's investment in Guoan can be roughly divided into the following three stages: investing in and operating Sinobo Guoan, neutralizing the name change, and changing the name so far.
In the first stage, when Sinobo Group took a stake in the club in 2017, Sinobo Group spent 3.5 billion yuan to obtain 64% of the equity, and the team was also renamed Sinobo Guoan. However, the 3.5 billion yuan was not handed over to the original shareholder CITIC Guoan, but directly remained in the club in the form of capital increase and share expansion as a long-term operating expense.
But as mentioned earlier, the operating expenses during the Jinyuan Super League period are at least 1 billion yuan per year, and 3.5 billion yuan is definitely not enough for all the investment of Beijing Guoan in the four years of 2017-20. Not only that, at that time, the Beijing Guoan Club was also burdened with heavy debt, and the source of the debt was the previous owner, CITIC Group. In the final stage of its stake in the Guoan Club, CITIC Group has stopped injecting capital and instead lent money to the club, so that future shareholders must pay CITIC on behalf of the club.
Then came the second stage, the gender-neutral name change in 2021.
Since the Football Association required that the name of the club could not include the parent company and other subsidiaries of the parent company, there were only two options to keep the name "Beijing Guoan".
Option 1: CITIC Group sells CITIC Guoan completely.
Option 2: Sinobo Group acquires the remaining shares of the Guoan Club in CITIC's hands, and CITIC completely withdraws from Beijing Guoan.
As a result, we all know that CITIC transferred the remaining Beijing Guoan equity of 1 yuan to Sinobo, and the club has since become a complete sole proprietorship. However, what many fans do not know is that although the transfer price of equity is basically equal to no money, the debt on the club's account needs to be paid off by Sinobo, and this debt mainly comes from the operating costs mentioned above.
According to the financial report released at the time, Guoan's total liabilities at that time were about 1.85 billion yuan. Although the specific figures are not disclosed, most of them should be the "price" paid by Sinobo to acquire the shares.
Finally, there is the third stage after the neutral name change.
As mentioned before, the operating costs of the Chinese Super League teams have plummeted in the past two years, but their own income is not high, and the investment of strong teams every season is about 3-500 million yuan, and Beijing Guoan is basically in this range. However, this operating cost only refers to the expenses related to the first team, not all the expenses of a Chinese Super League club.
For example, in the past few years, Beijing Guoan completely rebuilt its youth training system and introduced many excellent youth coaches from the Netherlands and other countries. Previously, some media revealed that including player salaries, coach salaries, food and lodging and travel expenses, the investment that the Guoan Youth Training Department evenly distributes to each player is about 300,000 yuan per year.
The total number of youth training echelons in Guoan is about 150 people, which means that the investment of the youth training camp is almost 45 million a year.
For example, as a capital team, Beijing Guoan naturally bears its due social responsibility. In the past few years, Guoan has hosted and participated in many cultural activities on campuses, communities and fans, and has also jointly held some public welfare projects with Aiberfu and Yanran Angel Foundation.
Although the investment in this area has decreased after the epidemic, public welfare undertakings still try their best to participate. On Children's Day 2023, 40 Tibetan children from Qinghai Yushu Children's Welfare Institute came to Beijing to train and exchange with the young players of Guoan Youth Academy in Xingongti, and were also praised by Hua Chunying and others.
If you roughly settle it, the total investment of Sinobo from its stake in Beijing Guoan to today, including the purchase of equity, first-team operation, youth training and public welfare, is roughly 8-10 billion yuan. If you add the construction cost of the new work, the overall cost will definitely exceed 10 billion. This figure is certainly much more rational than the madness of the Jin Yuan era, but considering that Sinobo is only a private company, it is still not easy to stick to it.
You know, of the 16 clubs participating in the Chinese Super League this year, only Beijing Guoan and Wuhan Three Towns are wholly privately owned. The top three teams in the provisional standings are all wholly owned by state-owned enterprises. In the general environment after being tossed by the epidemic for three years, state-owned enterprises do have many incomparable advantages.
Some people will say that how much money the owner behind the club invests has nothing to do with me, and if you can't afford to play football, don't play. Since you can't fight state-owned enterprises, wouldn't it be good to change the boss of a state-owned enterprise?
But sometimes, it may be that the private sector can bring something different.
[Will the future be better?] 】
The above calculated so many accounts for Sinobo, not to say that they do "public welfare football". I also never believed that a private company investing in football would really not expect a return at all.
When the neutral name was changed, Sinobo paid a big price. Many people say they lost a lot because the "national security" that they worked so hard to keep is still the name of former shareholder CITIC Guoan. But in fact, the "Guoan" that Sinobo has kept is not only the only name for this club in the hearts of fans, but also the most valuable and unique brand in Beijing's football circle.
In addition to the club investment estimated above, Sinobo Group also spent about 4 billion yuan to win the transformation and operation rights of the industrial body. The previous Argentina-Australia international friendly match, which ignited the country, showed the new style to fans across the country, and also set a sample for hosting various high-level events and commercial activities in the future.
By the end of this year or next year, the underground commercial area of the new building should be ready for use. It has a unique location advantage, and the IP of city center + Sanlitun business district + Beijing Guoan will definitely bring positive stimulation to the club and even Sinobo Group.
Among Europe's top giants, clubs such as Real Madrid, Barcelona, Manchester United, Manchester City and Juve have focused on building business districts around their home stadiums over the years, which is regarded as a blue ocean for the future development of football. Such attempts are still quite rare in Chinese football, and if Beijing Guoan succeeds, it will point out a new way out for professional football.
In addition, Beijing Guoan is also working hard to develop its own commercial value and cross-border IP. JD.com has signed a three-year sponsorship, and this season has also added many sponsors from China Mobile, China Telecom, Oriental Fashion, and Haier, bringing the total number of sponsors to 11, and the total sponsorship revenue should be more than 100 million. It is also said that a map giant and several banks are in talks with Guoan. All these will be an important boost for national security to get back on track in the future.
Chinese football is at another low point, with many familiar clubs either dissolved or relegated, and it seems that the entire league system will be rebuilt in minutes. What's even scarier is that we don't feel strange. From league to fans, we've lost so much in the last two or three decades that we've even started to get used to losing.
Therefore, the fire that continues to burn is more cherished.
Maybe the Chinese Super League still hasn't returned to full rationality, and maybe the club's truly benign operation is still a long way off, but I still hope that Beijing Guoan and other established clubs can survive the current difficult period and find a way to really stick to for a long time.
Then tell us that the past may not all become memories, and where will the persistence of the present lead.