Simon Chadwick, a professor of sport business strategy at Coventry University and the editor of sport business issues site The Scorecard, talks about the future of Chinese football and the challenges that await its fans
I was looking at this survey you did recently of over 16,000 fans in China, and it came out that Germany was the most popular national team among fans surveyed, followed by Italy, England and Spain. And the conclusion was that Chinese basically pick the winning teams. I’m curious about why that is.
I’ve done various pieces of research over the years looking at Chinese fans’ support for club teams and Chinese fans’ support for national teams, and I think in both cases obviously Chinese fans don’t have necessarily a national team, or a strong national team or a strong domestic team to follow. And I think what they have a tendency to do is really to select on the basis of two things.
I think the first one is to select on the basis of success. The second factor I would say is really based on history. I think Chinese fans like a history to their clubs, and to the brands that they associate with. So obviously if you look at the likes of Manchester United, or Real Madrid, or alternatively at national team level if you look at the likes of Germany, you’re not just getting instant gratification. What you are getting is something much more longitudinal and something much more enduring. I think it’s interesting because obviously Spain have been reasonably successful of late, but they weren’t the most popular team in China, it’s actually Germany. And I think it’s because Germany has this long track record, going back over several decades, of performing well at the international level.
Do you think that means that if China does field a World Cup team again, assuming it’s not wildly successful at first, Chinese won’t support their own team in the World Cup?
In lots of other sports China has been hugely successful, and there is a psychological phenomenon among sports fans called ‘BIRGing,’ Basking In Reflected Glory. I think what sports like table tennis enable Chinese fans to do is to BIRG. In football, it’s different. Because in spite of the efforts of the Chinese government and of the Chinese state to promote football, the national team and the domestic teams just haven’t become more successful. So there’s another psychological phenomenon among sports fans which is called ‘CORFing,’ which is Cutting Off from Reflected Failure.
So in other words, what fans do is they don’t want to be associated with losing teams because it makes them look bad, and so they support other teams, or they follow other sports. And I think what we see in China right now is CORFing. Why would you support China, who always fail, when you could support Germany, who always win?
Another of the big problems is that Chinese football is seen as being very corrupt. And I know the Chinese government has tried very hard to address that matter and is continuing to do so, but it does foster a degree of cynicism and suspicion amongst football fans. You could support German soccer which is clean, or you could support Chinese soccer which is not.
On that note, why even support football—why not pick a sport that’s more successful? What is the basic appeal of football spectatorship in a country where football isn’t really that widely played and many of the teams aren’t very successful?
I think we’ve started to see some changes recently that potentially will have a profound effect on Chinese football. In particular, I refer to the case of Guangzhou Evergrande, because the Evergrande Real Estate Company, which has owned the Guangzhou club, has invested heavily—not just in terms of buying players and recruiting good coaches, but they’ve also set up the Guangzhou Academy, which currently has 2,000 kids attending it. This is very much based on a long-term view of developing Chinese playing talent, and Guangzhou became the first Chinese club to win the Asian Champions League earlier this year. So they’ve made really large and tangible strides in terms of improving both the performance level and the image of Chinese football, not just domestically but overseas, too, to the extent that I was reading things that people were saying, well, is Guangzhou Evergrande going to be the first Asian superclub in the same way as Manchester United and Real Madrid?
Now, interestingly, Guangzhou, or most specifically Evergrande Real Estate Company, recently sold a shareholding to Alibaba, so now what you have is the champions of Asia, Guangzhou, very strong Chinese team, probably will do very well again in the league this year, obviously underwritten to a certain extent by Evergrande but now supported by an online organization that is growing very, very quickly. And for me, what’s very interesting is what happens to Guangzhou now, because I think they may very well became a barometer for change and development of Chinese football more generally.
I guess it does seem like there is this big push to have Guangzhou be the Chinese football club, to put all of the resources behind it. But do you think that that could be bad for Chinese football? Would it not be healthier to have a number of strong clubs in China?
One club doesn’t make a league. What you need is a lot of clubs that are of kind of equivalent size and balanced in the right way, so what you get is you get this intense and exciting competition. And you will know this if you look at in the United States – if you look at basketball or hockey or American football, what you get is lots and lots of teams that are kind of approximately equivalent in size and strength to one another, and you have measures in place to ensure this. And what this does is it ensures that there’s more balanced and more intense competition between the franchises out there.
But in China you don’t have that. Effectively what you have is industrial concentration. So you’ve got one club that at the moment is dominating and given recent developments is essentially likely to dominate for some years to come. And what’s very, very important is: if the state is behind the promotion of development at Guangzhou, I think there needs to be some development alongside that with other teams in other parts of the country—obviously in Beijing, in Shanghai, in key target markets where we see these teams starting to develop.
Someone was telling me some statistics earlier, that Beijing Guoan is the most popular club team among fans, and also being in Beijing—why is it not receiving more of the funding, why is it not more supported?
Beijing Guoan has a very different ownership structure to other clubs. Obviously in the case of Guangzhou Evergrande, what you’ve got over the last decade is Evergrande is the owner, and now Alibaba is moving in, whereas Beijing Guoan, historically it’s got large state involvement in the club. The state is the majority shareholder of Beijing Guoan. So in some ways Beijing Guoan is almost a reminder of how things used to be. But I think what it doesn’t have because of that ownership structure is the commercial focus and entrepreneurial spirit you might see at other clubs.
So you think it’s kind of almost this state-owned enterprise versus private enterprise issue.
Yeah, and I guess that really is the juxtaposition, and the crossroads that Chinese football is at right now. Because there is the old world, which to a certain extent which is represented by Beijing Guoan, and then the new world, which to a certain extent is represented by Guangzhou Evergrande. And I think this is not just an issue for fans, for clubs, it’s an issue for the government and for the country too. And it needs to ask itself, which way do you want to go?
Could you give me an impression of the statistics, what proportion of clubs are mostly private owned, or is it only a few, and what still have mostly state involvement?
I can’t give you specific statistics, but obviously if you look at the likes of Shanghai Shenhua, certainly Guangzhou Evergrande, over the last decade there has been growing private sector investment. But typically these investments have been made either by real estate companies or by technology companies. And it hasn’t always been obvious or apparent why these private organizations have invested in football. So I think we have therefore seen that the way in which these football clubs have developed hasn’t necessarily been consistent with the broader strategy of the owner’s organization. So in other words there hasn’t been a coherent long-term strategy aimed at building the club, building playing talent and engaging the fan base, promoting the development of commercial activity and so forth.
The other clubs that we see, we’ve talked about Beijing Guoan, where there has been fairly heavy state involvement I think in these clubs, which means the clubs have been politicized, much more so than certainly in countries like England and Germany. But I think also there are other examples out there of different ownership models and ownership structures being employed.
So for example, Chengdu were actually bought by an English professional football team called Sheffield United. So the purpose of this was Sheffield would buy the team, and they would help the club to develop, and to identify talent. And the spinoff for Sheffield obviously was that potentially they would develop lucrative commercial opportunities in China, or discover exciting Chinese players and so forth. But it just didn’t work, and in the end, Sheffield pulled out.
I think there needs to be, if you like, a new business model for Chinese clubs emerging, whereas clubs can grow, they can identify players, they can do well on the fields, but at the same time they can do well commercially off it. And I think potentially that model is Guangzhou Evergrande, particularly the link between the Evergrande Real Estate company and Alibaba.
So what was the problem with Sheffield United, because I mean it seems like you would think being bought out by a football company would be more successful than real estate and technology. That seems like kind of an odd pairing. So what’s going on here? Is there an interesting story behind these different sectors?
I think obviously a football club in itself owns prime real estate. So a stadium is a large construction, as you know in China where space is very often at a premium, a football stadium doesn’t necessarily fit within kind of broader urban planning. So I think real estate companies have really been buying into football because it gives them control of the land, it gives them some political influence, and it also ties the owners of these clubs into, if you like, broader urban planning strategy.
But I think what’s happened at Guangzhou is interesting because it’s been a little different, because Evergrande have invested very heavily in the Evergrande Academy for players. And I think also they’ve worked very carefully to ensure that the club hasn’t just been domestically successful but has also been internationally successful, too. So I can understand potentially why Evergrande has been involved in terms of the influence it has given them over the real estate marketing in Guangzhou.
The involvement of Alibaba I think is interesting because obviously there would appear to be a contradiction between being an online store and being a real estate company. But I think in some ways it’s potentially marked out the next phase of development, certainly for Guangzhou if not for Chinese football more generally. And that is to consider not only the land and building, but also the kind of commercial infrastructure that surrounds the club. So presumably what Jack Ma and Alibaba are going to bring is knowledge of retail markets, is knowledge of how to create and sell merchandise, how to engage in online commerce, and so forth. So while it might seem to be a juxtaposition in some ways, what it is is a match of much-needed competencies that hopefully will benefit the club as a whole.
Just to check, this Evergrande Academy that you were talking about, is that an academy for youth players?
Basically it’s brand new, it looks like Hogwarts in Harry Potter, and really two things happen there. And the first thing is they are teaching these kids or they are training these kids to become better footballers, so that there will be an impact on Guangzhou and possibly on Chinese football more generally. But I think at the same time what it does it is addresses Chinese parental concerns that what you should be doing is studying to be a dentist, or a doctor or an accountant as opposed to playing football. It’s very much training in football, but also education more generally. So there is a core of around 2000 kids at school there following this kind of program. But also there are short courses there. So I think particularly amongst the Chinese middle classes the academy makes money by selling these intensive training programs.
So it’s like a K-12 school, and upon graduation these kids can go to college or they can try for professional football.
Yeah, it’s just a school. You go to college, you go to university when you finish. But it may well be amongst the 2000 who graduate there may be one or two incredibly skillful players, who potentially can go and sign for Guangzhou, or for Beijing Guoan, or Shanghai Shenhua, or whatever.
I was doing some interviews at the Shanghai Shenhua game the other day, and some people were saying, well a minority of people were saying they would basically never support the national team because it was overly politicized. What is the story behind that? What does that mean?
There are various ways to look at this. The first thing to say is that the world governing body of football is FIFA. Under FIFA rules, domestic football associations must be immune from interference from state governments. Now obviously in China, it’s different, it is normal for the state to intervene. And so typically what you have seen is the government influencing who becomes the president of the football association, influencing who buys a football club, influencing the kind of decisions that are made about national football.
And so I think what China needs to go through – and I’m talking about the government, the football association, and the fans themselves – is almost a re-negotiation of what happens in football in China. In international terms it’s acceptable for the Chinese government to set performance targets, and to allocate resources that ensure that football gets better. But I think at that point it has to step back and leave the football association and the clubs themselves to make the best decisions for Chinese football.
I’m curious then, what exactly is the problem that Chinese fans have with this? In Chinese society it seems like people are used to almost everything having some element of government control, so where is this opposition coming from? Is it from the international influence, or is it because they’re familiar with these FIFA guidelines, or where is this coming from?
I am very friendly with a significant number of Chinese people, and they feel the state should just leave Chinese football alone. Essentially what they feel is there are some very commercially adept, strong managers who have also been educated abroad, and so have seen the different ways for example in which football functions in other countries, and I think their view is that they want the support of the Chinese state, they want to know that there’s a commitment to the long-term development of football, but ultimately they want to be left alone to just do this themselves.
Last time I was in China I actually ran a week’s training program for the Chinese football association, and it became apparent to me in the sessions that I ran that there’s a real disconnect between the committee members, who typically tend to be old men, who have been educated abroad under a very different political regime, and then there’s no one in the middle, but you’ve got lots and lots of young people who are basically born and brought up during the 80s and 90s, studied abroad, they’ve got Masters degrees in sports from the United States and Britain, and they see the world in a very different way. And I think because these older men, the seniors, are sort of embedded in an established network, the younger people believe it’s very difficult to break into that and to begin to have any influence
I was talking to someone earlier about the effect that TV and basically all sorts of international games being broadcast everywhere has had on Chinese fans’ team preferences. It seems like you’ve done some research on the social media aspect – is there anything interesting to say about how social media has affected Chinese fan behavior?
I think there are two things. Firstly, a broader media issue, and secondly a more specific social media issue. I think as far as broader media is concerned it’s really interesting, because obviously the first point of engagement for Chinese fans with European football very often comes through television. And European football first was broadcast in China during the 1980s. Now at that point Italy’s La Liga was very active in selling television rights in China. And during the mid-to-late 80s the two Milan clubs, Inter Milan and AC Milan, were very, very successful, so they were successful internationally. And what you tend to find is, particularly among men in their middle ages, a strong fan base, firstly for Italian football, and secondly for AC Milan and Inter Milan. Now the Italian Super Cup, the game that’s played just before the season starts between the previous season’s League winners and the previous season’s Cup winners, has been taking place in Beijing. So such is the strength of the predisposition towards Italian football amongst certain target markets, certain key fan markets in China, that Italian games have actually been played in China as a result. And so Italian football, in general terms Italian football is in a very bad state right now, but in China there’s still a very strong and healthy interest in Italian football that comes from the 1980s, comes from these middle-aged men in particular, also their kids who are now growing up and becoming Italian football fans too. So the point I would make about broadcasting in general is for some people, still, the first point of engagement with football, particularly European football, comes through TV. So this is why broadcast content and broadcast markets are very important, particularly in China.
As regards social media, this is obviously really, really interesting, because with the massive growth in mobile technology and handset ownership, the initial rise of the likes of Tencent Weibo and Sina Weibo and now the likes of WeChat, what that has enabled is for actual fans and prospective fans to talk about and to share content around football. And what we found particularly interesting is, in a society where standing out from the crowd is not necessarily socially desirable, what you can actually do in social media is you can stand out from the crowd. So you can say things and you can post content, you can share content, that marks you out as being different. So you can mark yourself out as being a Manchester United fan. Or you can mark yourself out as being a Lionel Messi fan.
And so the research that we’ve done and the fans we’ve talked to – social media, amongst football fans, allows these people to construct an identity for themselves in a way that in broader society they’re denied. So in other words they can speak how they want, they can act how they want, they can appear how they want, they can share things that they want, and this is very, very different to their normal, everyday, face-to-face lives. It’s almost like social media is a virtual sanctuary where you can be yourself.