China vows to curb record spending on football transfers
Sports agency warns against irregular payments after local clubs sign star players
by: Tom Hancock in Shanghai
China’s top sports administrator has vowed to cap spending by football clubs, accusing them of burning money and paying excessive wages to foreign players.
The General Administration of Sport of China made the pledge after several signings during the winter transfer window smashed already high records.
Among the deals, Shanghai SIPG bought Brazilian midfielder Oscar from Chelsea rumoured to be as high as £60m, and Shanghai Greenland Shenhua, a local rival, signed a two-year contract with Argentine striker Carlos Tevez reported to be worth more than $20m per season.
Chinese clubs have made a string of record-breaking signings over the past year as companies with interests ranging from real estate to steel diversify into the rapidly growing sports sector. They are also hoping to curry favour with the Communist party, which plans to turn China into a footballing superpower.
The administrator said on its website: “A cap on players’ salaries and transfer fees will be established to control irrational investment.” Supervision of club finances will be stepped up to “keep fees for top-tier players within reasonable limits”.
“Some issues have arisen and generated wide attention, such as large overseas acquisitions, a serious situation with clubs burning money, and foreign players with excessive salaries,” it added. Clubs whose liabilities exceeded their assets would be banned from professional competition.
The agency said it would “combat irregular behaviour with regards to signing fees and under-the-table contracts”. Players and agents found to be in violation of regulations would be “severely punished”.
The warning comes as Beijing seeks to curb capital flight disguised as foreign investment. Some Chinese companies are thought to have moved billions of dollars offshore via acquisitions to escape the country’s weakening currency, with analysts noting a particular tendency to overpay for foreign assets.
China’s football spending splurge spread around the world over the past year, with Chinese companies buying a stake in English club Manchester City and acquiring Italy’s AC Milan, alongside lesser known teams. England’s four main West Midlands clubs — West Bromwich Albion, Aston Villa, Birmingham City and Wolverhampton Wanderers — now have Chinese owners.
The agency was partially echoing the language of four senior finance regulators who last month issued a joint statementsaying they were monitoring “irrational” overseas investment in real estate, hotels, film, entertainment and sports clubs.
President Xi Jinping has declared his hope that China will one day host and win a football World Cup. That will be a tall order for a country whose national team has a woeful record and is ranked 82nd in the world. But it has prompted a flood of money into professional teams.
Last year, Brazilian striker Hulk moved to Shanghai SIPG for $61m and his compatriot Alex Teixeira completed his move to Jiangsu Suning for €50m ($55m). Former Arsenal player Gervinho moved for $20m to Qinhuangdao, China’s biggest coal port. |
