A Chinese consortium invested $400 million to take over 13% of the prestigious Premier League Manchester City football team. While several Chinese companies made an arrangement in order to take advantage of the notoriety of this team, there are several challenges in this transaction.
First, the consortium will not be the biggest stakeholder of the Citizens; the main control of the club remains to Abu Dhabi Investment Company. The companies involved in this Chinese consortium had been taking over several TV rights in the last few months. Leshi Internet Information & Technology Corporation got the NBA TV rights earlier in 2015. Dalian Wanda bought some Iron Man series of races and is also one of the investors of Atletico Madrid, owning 20% of the La Liga club. The third company forming part of the consortium, Rastar, owns 56% of another Spanish team: Barcelona based RC Espanyol.
The major investment into Manchester City represents how Chinese companies are becoming increasingly interested and involved in European football. As part of their strategy, China wants to be highly involved in the world’s most popular sport, but struggle as they do not possess a world-class football league. Investing in European clubs is part of a global strategy to create an infatuation for this sport in mainland China. The purpose of these investments is to raise football popularity in China, with the intention that in the future their local league will become more competitive and attract famous players.
Can Manchester City become bigger in China than their rival, Manchester United?
When the Abu Dhabi Investment Company became the majority owner of Manchester City, they almost instantaneously converted the Citizens into one of the best in the world. Moreover, the minority Chinese consortium will provide the United Arab Emirates group an opportunity to have a better penetration in the Oriental Asian market. The Chinese football industry and Manchester City will get a big return in this investment. Few years ago, Sir Alex Ferguson, the former manager of Manchester United, said that Manchester City would not be a brand as huge as Manchester United in China. Therefore, can an investment like this create a change to this trend?