China and the Premier League have parted ways amid a downturn in diplomatic relations. Image: Facebook

The English Premier League, the world’s most-watched sports league, isn’t known for turning away money, especially while most of its clubs are facing financial troubles because of the Covid-19 pandemic.

So it was all the more surprising when last week the league canceled a reported US$665 million broadcasting deal with its Chinese partner, the most money paid to the football league for overseas broadcasting rights.   

The dispute purportedly arose after the Chinese broadcast partner, Suning Holdings and its subsidiary PPLive Sports International (PPTV), failed to pay $210 million in fees due in March, the first tranche of a three-year agreement which would allow PPTV to broadcast each season’s 380 Premier League matches in China until 2022.

The Premier League, a corporation run by the 20 football clubs that play in the league each season, claims this non-payment represented a breach of contract.

The unanswered question, though, is whether the break-up was simply a breakdown in trust over money or whether politics was a factor, as relations between the United Kingdom and China have severely deteriorated since March. China-UK relations were lauded to be in a “golden era” when the deal was first signed.

Reports suggest that PPTV wanted to renegotiate the deal because, it argued, empty stands and a pause in games after March 13 due to the pandemic had devalued the product. Other broadcasters have agreed to a Premier League rebate because of the postponement of matches.

PPTV had the exclusive right to broadcast Premier League games in the Chinese mainland and Macao Special Administrative Region as part of the now-terminated deal. It bought the rights for the 2019-2022 broadcasting cycle back in 2016, outbidding the previous Chinese broadcaster Super Sports by a multiple of 12.  

A very brief statement by the Premier League said only that “the Premier League confirms that it has today terminated its agreements for Premier League coverage in China with its licensee in that territory.” It added: “The Premier League will not be commenting further on the matter at this stage.”

Chinese fans at a Premier League Liverpool match. Image: AFP

Suning Holdings, which also controls Italian club Inter Milan, has said the cancellation was solely to do with financial disagreements.

The UK, which was supposed to uphold its former colony Hong Kong’s autonomy until 2049, reacted angrily after Beijing imposed a national security law over the territory in June. London has also revoked its extradition treaty with Hong Kong and offered residency to fleeing Hong Kongers.

More importantly, Britain has defiantly sided with the US against allowing the controversial Chinese tech firm Huawei from providing equipment for its 5G network development, due to fears the company spies on behalf of Beijing. Huawei has consistently denied the charge

Back in January, the UK stirred a diplomatic spat with the US, its closest ally, when Prime Minister Boris Johnson said that Huawei’s involvement could go ahead.

But escalating tensions with China from March onwards, during which Foreign Minister Dominic Rabb said relations won’t return to normal, saw Johnson U-turn on his decision and banned Huawei altogether.

Simon Chadwick, professor of Eurasian sport at Emlyon Business School, says the Premier League’s decision to cancel the Chinese broadcast deal “reveals a great deal about both the misaligned and divergent interests of Chinese investors and European sport.”

“The matter seems to be about money,” he added, “but it’s also about politics and expectations as well. Indeed, on this basis one wonders about the extent that both sides feel able to trust the other.”

This wouldn’t be the first time that sports have fallen casualty to China’s international ambitions.

For months last year, Chinese broadcasters took off-air several matches of the National Basketball Association (NBA), the American basketball league, after Houston Rockets’ general manager Daryl Morey publicly came out in support of Hong Kong’s pro-democracy supporters.

Huawei also canceled its sponsorship deal with Australian rugby league side Canberra Raiders after Canberra banned the Chinese tech giant from providing equipment for its 5G network.  

The logo of Huawei is seen on a Football Photo: AFP Forum via NurPhoto/ Alexander Pohl

Chinese broadcasters took some Premier League matches off-air last year after German star, Mesut Ozil, who plays for London-based Arsenal, denounced China’s human rights violations of the Uighurs, a Muslim minority detained in camps in China’s northwestern Xinjiang.

Several Arsenal matches were subsequently not broadcast and all mention of Ozil, even on Chinese social media, was banned.

The Premier League is a major soft-power source for the UK. Former Prime Minister David Cameron took Chinese President Xi Jinping for a tour of Premier League winners Manchester City in 2015.

During Xi’s state visit, senior British government officials boasted of a new “golden era” of UK-China relations and said the UK was China’s “best partner in the West.” Manchester City is part-owned by Chinese state-owned investment firm CITIC Group, the world’s largest state-run conglomerate.

In July, news agencies reported that China’s state television broadcaster, CCTV, had downgraded the final matches of last season’s Premier League from its main station to one with fewer viewers, CCTV5+, because of political tensions between Beijing and London.

However, Chinese media later asserted that the change wasn’t due to politics or motivated to punish the Premier League. They also claimed politics played no part in the recent cancellation of the Premier League’s broadcasting deal. 

The Global Times, a state-run tabloid, noted that whereas NBA matches weren’t broadcast in protest against the politically insensitive comments made by a club’s manager, no senior official from the Premier League or from its clubs has said anything critical of the Chinese government in recent months.  

Xi Jinping, Sergio Aguero and David Cameron took a selfie together during Xi's state visit to the UK in October 2015. Photo via Twitter
Xi Jinping, Sergio Aguero and David Cameron took a selfie together during Xi’s state visit to the UK in October 2015. Photo via Twitter

The Global Times may have been told to downplay the Premier League contract’s termination since the jingoistic newspaper rarely needs an excuse to whip-up nationalism at home by claiming that foreign nations are unfairly treating Chinese firms.

It’s highly unlikely that the Premier League canceled the deal on the express orders of the British government, though it’s probable that there was some discussion between authorities and the sporting organization surrounding the issue, analysts say.

“The [Premier League] enjoys close and often coordinated relations with the British government,” Chadwick noted. “Such was the sensitive nature of it terminating Suning’s deal that it seems highly likely that the decision was taken in consultation with Downing Street.”

It is probable that Suning Holdings was in consultation with Beijing, too. It is controlled by billionaire Zhang Jindong, one of China’s richest tycoons who sits on the National Committee of the Chinese People’s Political Consultative Conference, a senior governmental body.

Even if politics wasn’t the main reason for the contract’s termination, it reveals problems between Chinese investors in the English game, especially coming amid a scandal at Wigan Athletic.

Now a League One team – so under a separate organization than the Premier League – it went into administration in July just weeks after being taken over by Hong Kong-based owner Next Leader Fund.

Zhang Jindong at a football match in a file photo. Image: Facebook

The opaque dealings between several Hong Kong firms, which involved flipping ownership between firms run by the same person and claims that the new owners intended to put the club into administration before their takeover, was even debated by senior British politicians in parliament, one of whom called it a “major global scandal.”

In June, it was reported that the Premier League had agreed to pay back £330 million (US$430 million) to domestic and international broadcasters because of the postponement in the season this year, almost half of which went to Sky, the main domestic broadcaster of matches.

It is understood that the payment will be postponed until next year.

There are claims that the Premier League and PPTV disagreed over a rebate and a reduction to the agreed broadcasting deal, and that the Chinese firm felt it was being unfairly treated compared to other broadcasters. Alternative opinions hold that PPTV simply couldn’t afford the previously agreed contract. 

None of this would have been an easy decision for the Premier League’s clubs that voted in favor of the cancellation, as the 20 teams lost more than $1.1 billion in revenue combined last season because of the pandemic.

The Premier League, which is due to begin a new season on September 12, is now looking for a new broadcaster in China, with reports claimed that it favors splitting broadcasting rights between several Chinese firms, rather than giving one exclusivity, as it does domestically.

How easily it does or doesn’t find a new broadcast partner in Chia may reveal more about whether political intrigue did indeed play a part in the affair.