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Abu Dhabi, UAEWednesday 19 December 2018

Chinese appetite for foreign football clubs likely to fade

Analysts say recent rash of purchases may have peaked

Aston Villa's John Terry (L) and teammates. Andrew Couldridge/Reuters
Aston Villa's John Terry (L) and teammates. Andrew Couldridge/Reuters

Outside investment in British football looks set to increase but the wave of takeovers from China has probably peaked, analysts say.

Out of 20 English Premier League clubs, 13 are owned or controlled by companies from outside the United Kingdom and that wave of investment has rippled down the leagues to the lower levels, such as Bristol Rovers, which was acquired last year by Jordanian Wael Al Qadi.

“If you look at the income, money from TV rights is increasing in value. That will attract people from around the world to English clubs,” says Mr Al Qadi, a co-founder of the Arab Jordan Investment Bank, who was speaking at the Soccerex Global Convention in Manchester, England, as part of a panel on international ownership of sport.

Trevor Watkins, the global head of sports at the legal practice Pinsent Masons, was moderating the session and said he had received “five or six” enquiries about buying English clubs in the last 36 hours. “I don’t think there is a lack of interest in people looking to buy [English] clubs,” said Mr Watkins.

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However, the influx of money into English football from China, which has seen Aston Villa, Birmingham West Bromwich Albion (WBA) and Wolverhampton Wanderers taken over by Chinese investors looks likely to stop.

“Deals are a lot more difficult to do now,” says Marcus Shabolt, a managing partner at Vermilion Partners, an investment banking group that specialises in cross-border Chinese investment and advised the consortium from China led by the entrepreneur Guochuan Lai, which acquired the English Premier League Club West Bromwich Albion in September 2016.

“China is still a developing economy. I can see it might be difficult spending a lot of money on a player or a club when there is a lot of work to be done raising the average lot of people in China," adds Mr Shabolt.

“There might be individuals with offshore funds but I doubt that companies in China will buy clubs outside of China in the immediate future.”

Those English clubs acquired by overseas investors are instead looking to make money overseas with Mr Al Qadi citing his attempts to generate interest in the Middle East in Bristol Rovers through the live streaming of matches over the internet.

“We are working to a strategy to make people in the Mena region to be interested in Rovers and to generate subscriptions,” he says.

China and the United States are the key markets for English clubs to boost their income.

Mr Shabolt adds: “It’s the national plan to take national income from sport from £40 billion [Dh191.21bn] to £500bn. Football is expected to be a large part of that. Owning a club from what is arguably the best league in the world is part.

“The accretion of rights value must stop at some point, but there are still some areas where it can grow.

“There is a lot of growth to be had in the USA; certainly, that’s in the mind of our owners.

“If a club gets the strategy right, they could double their commercial income in a place like China,” Mr Shabolt says.

With money coming in and clubs looking for global expansion, English football remains a money hub for the game.

Updated: September 6, 2017 06:06 PM

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