On Monday evening, Wigan Athletic will host Manchester City in the English FA Cup. This, the world’s oldest football competition, is famous for producing memorable “David and Goliath” upsets and this match might be one of them. Then again, the dazzling talent of Manchester City could well win the game very quickly and easily.
In a geographical sense these two teams are rivals. Their respective grounds are both in the English metropolitan county of Greater Manchester and sit only 30 kilometers apart. Apart from location, there would seem to be few other real similarities.
Wigan attract crowds as low as 5,000 in English football’s third tier and sit 46 league places below their far wealthier neighbors, whose team of seemingly unstoppable global superstars play every match in front of billions live on TV and are this season’s runaway success. There is one other similarity, however. Both clubs might soon be owned, in part, by interests from China.
Manchester City have lost in the English Premier League (EPL) only once since April 2017 and boast the world’s most expensive team, currently valued in excess of one billion US dollars.
The club’s controlling entity, the City Football Group (CFG), owns significant stakes in clubs in Australia, Japan, Spain, Uruguay and the USA and reportedly is currently assessing more possible buy-out targets, in China, India and Southeast Asia, as it moves to create what has been described as a global Disney-esque franchise model. Manchester City is attempting, with success, to become the most powerful football club the world has ever seen.
The ambition, structure and success was kick-started via the wealth of Abu Dhabi Royal Family member, Sheikh Mansour, who bought the club in 2008 for £210 million (at today’s rates, approximately $300 million) and has since spent considerably more – perhaps as much as $900 million – on team building, restructuring and facility upgrades.
But the recent chapter in this story includes China. In 2016, just weeks after President Xi Jinping visited Manchester City’s training ground, a PRC consortium led by Chinese media mogul Li Ruigang’s China Media Capital paid $400 million for a 13 percent stake in CFG. According to Forbes, in 2015 CFG was worth $900 million. The 2016 deal with China put this value in excess of $3 billion.
Figures published by Europe’s football governing body UEFA in January are revealing. They say that since 2016, more than 70% of all foreign takeovers in the top 15 European leagues have involved Chinese investors. In this period, according to UEFA, Chinese owners have taken over clubs in the highest leagues in England, France, the Netherlands, Spain and Italy.
PRC buying frenzy cools
This was driven by Xi’s enthusiasm for the game – and indeed the business – of football and the active encouragement his government gave Chinese entrepreneurs to invest globally in the game. But 2017 brought Beijing’s much-publicised currency controls and this put a hard brake on all “non-strategic” outward investments.
This, combined with some almost embarrassingly questionable high-profile football club buyout deals involving Chinese investors, have seen the big-money PRC buying frenzy stop.
But there is now another possible emerging trend and that is buyouts by overseas Chinese. In England, in May 2017, Dai Yongge and his sister Xiu Li purchased Reading Football Club. The siblings, who made their fortunes from converting urban mainland Chinese underground bomb shelters into shopping malls, originally hail from Harbin but Yongge is now listed as a resident of Hong Kong and Xiu Li as being British. Then, in December 2017, a consortium led by American Chinese billionaire Chien Lee purchased another English club, Barnsley.
And in early February it was announced that Hong Kong businessman Dr Stanley Choi Chiu-fai, who heads a collection of entities with wide-ranging commercial interests, in dairy, securities, foreign exchange, hotels and casinos – and who also plays poker on a professional circuit – has put a bid in to buy Wigan Athletic.
Despite Wigan’s current lowly status it is not hard to work out why Dr Choi hopes to complete this purchase. A sizeable chunk of the domestic UK rights to show EPL games for 2019-2022 were auctioned last week for $6.3 billion and were shared between broadcasters Sky Sports and BT Sport. The sale price shows an increase of just over a billion over the last 2015-2018 deal.
However, the international rights – currently spanning 80 broadcasters, in excess of 200 territories worldwide and a supposed possible audience of more than four billion people – was, for 2016-2019, reportedly worth about US$4.5 billion. In line with the English Premier League’s growing global popularity, is estimated to go up significantly, by three times or possibly by more than ten times.
If these sums are right this will mean considerably more broadcaster rights money, more audience and more brand leverage. The EPL has in the last two decades changed significantly. When the Premier League made its debut 25 years ago, every one of its 22 clubs was entirely owned by English owners.
Today, the league has 20 clubs and only six are 100% English owned. Global viewing figures were something like 500 million two decades ago and now they are in the multiple billions and rising.
And within the last 20 years, Manchester City have been relegated from the top league on more than once; in fact, in 1998, Manchester City pipped Wigan to win promotion back into the EPL. It is hard to imagine now but times change and so do clubs.
Dr Choi will undoubtedly be watching Monday night’s game with more than passing interest.