Some Chinese companies and tycoons have been interested in buying foreign football clubs in order to please Xi Jinping (inset). Photos: Wikimedia Commons, Xavoun, Gabhksw
Some Chinese companies and tycoons have been interested in buying foreign football clubs in order to please Xi Jinping (inset). Photos: Wikimedia Commons, Xavoun, Gabhksw

Well, yes, money can buy everything, but perhaps it is still a distant dream that China Inc will be able to purchase Manchester United Football Club, one of the most expensive soccer franchises in the world.

The news that a Chinese enterprise was buying a minority stake in Manchester United, known as the Red Devils, excited millions of Chinese fans for a day before the news died down. Chinese media had reported that Ping An Insurance (02318.HK) might be a suitor and provided financial details, but a spokesman for the Shenzhen-based company said it was fake news.

Read: Ping An denies bid for Manchester United

Too bad – the thought of having the top two teams in Manchester, where a Chinese consortium bought 13% of Manchester City in December 2015 for £265 million (US$346 million at current exchange rates), seems unrealizable now that Chinese corporates are unwilling to run the risk of  upsetting Beijing.

Last month, it was reported that the China Banking Regulatory Commission had ordered banks to provide more loan information on the four most aggressive overseas dealmakers – Dalian Wanda, HNA Holding Group (00521.HK), Fosun International (00656.HK) and Anbang Insurance Group – especially in five areas: property, cinemas, hotels, entertainment businesses and sports clubs.

Wanda owns 20% of Spanish soccer team Atletico Madrid, European Champions League runners-up in 2014 and 2016, while Fosun bought the English Premier League team Wolverhampton Wanderers in July last year.

Soccer fan Xi Jinping

Numerous Chinese corporates have bought into top soccer clubs during the past four years, something that is believed to have pleased soccer-loving President Xi Jinping, who visited the United Kingdom two years ago and took the time to visit Manchester FC.

But soccer-club deals have raised eyebrows, not just over the cost and speed of the acquisitions, but also how easily this sport, which involves betting among other things, can cause a flood of capital flowing overseas and money-laundering activities.

Beijing’s ban on buying overseas sports franchises seems to have poured cold water on the hope of wealthy Chinese tycoons to impress President Xi.

The last eye-popping deal was by Chinese tycoon Li Yonghong, who bought former Italian president Silvio Berlusconi’s AC Milan for €740 million (US$873 million) this April. It was the biggest-ever Chinese investment in a European soccer club.

Earlier, Suning, a retail giant backed by Alibaba Group, bought Inter Milan for €270 million in June 2016.

Chinese buyers took both franchise teams in Milan, but may need to wait a bit longer before getting those in Manchester.

Birmingham City

Even if Chinese companies and tycoons continue to be interested in buying European soccer clubs, not every deal has seen a happy ending.

In August 2009, Hong Kong businessman Carson Yeung Ka-sing bought Birmingham City FC for £57 million, injected into its listed firm, which was then renamed Birmingham International Holdings Ltd (02309.HK). In February 2011, the team beat Arsenal to win their first cup in decades.

However, Yeung was arrested in June 2011 for alleged involvement in money laundering. Struggling with lawsuits, he had to sell the controlling stake in Birmingham International Holdings to Paul Suen Cho-hung, a Hong Kong businessman nicknamed the “King of Penny Stocks”, for about HK$400 million (US$51.1 million), or a 94% discount per share.

Last year, Birmingham City FC filed a lawsuit to claim HK$120 million from Yeung, who is still serving a six-year jail term.

One reply on “Will Red China own the Red Devils one day?”

Comments are closed.