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What next for the Chinese Super League?

The return of China’s elite soccer competition has come as a relief to its organisers after a fraught five-month delay. SportsPro ponders the long-term impact of the revised season on the CSL and the wider sports industry in Asia’s biggest market.

by Ed Dixon
What next for the Chinese Super League?

With the industry scrambling on a daily basis to establish ‘the new normal’, to say sport has been in a state of flux over the last five or so months is hardly profound. For the Chinese Super League (CSL), the period, filled with failed proposals and protracted infighting, has felt like a lifetime.

Having been due to kick off its 2020 season on 22nd February, the competition finally resumed on 25th July, a mere 154 days behind schedule. Yet, that prolonged spell was littered with incidents aplenty.

Several proposals from the Chinese Football Association (CFA) had been made for a return to the pitch, only to be rejected by the General Administration for Sport (GAS) and Chinese Centre for Disease Control (CCDC). It had prompted the very real possibility that this year’s edition would be ditched entirely. Local media soon reported that resuming any later than July would cause a colossal clash of calendars, including players being called away to training camps for Fifa World Cup qualifiers.

Adding to the concern was the vast array of overseas stars and coaches, who returned to their native homelands, being prevented from re-entering China due to travel restrictions.

A minute’s silence was held for those who died in China from coronavirus

After much wrangling, an agreement staggered its way over the line. All CSL matches would be played in Dalian and Suzhou behind closed doors, under strict Covid-19 containment measures. A 132-page guidebook was also produced, with players and staff being tested every week. Clubs are currently based in a single hotel in one of the two cities, complete with shops, cafes, games rooms and even barbers to make their stay more tolerable.

The league’s structure, too, saw an overhaul. Drawing on a model used by the Chinese Basketball Association (CBA) competition – the first major domestic sports league to return back in June – teams were split into two groups of eight. The first phase of the CSL will be made up of 14 rounds until 28th September. A second phase will see groups split into two halves, with the top teams playing each other for the title and the bottom sides facing off to avoid relegation.

Matches over the opening weekend began with a minute’s silence for those who lost their lives to the virus – China had 4,634 confirmed deaths at the time of writing. Doctors and nurses were applauded for their efforts. Empty stands were draped with banners filled with messages of support for players, and live images and sounds of fans watching on were played via screens around the pitches.

But, after all that, and considering China being the epicentre for a global pandemic, was the appetite for the CSL still there?

Gao Hongbo, the CFA’s vice president, was among those left frustrated by the league’s delayed return

“I think there’s definitely excitement,” Brandon Chemers, editor at Chinese soccer specialist publication Wild East Football, tells SportsPro.

“People have been wondering when the league is going to come back. China was ‘safe’ long before anywhere else. So a lot of people were thinking that when Korean sports started back up, then China would be soon behind.

“The situation is not really one of anger, but amongst some of the fans there is some frustration about the league and clubs being overly cautious."

That caution was not just limited to closed borders within China. Clubs loaded with foreign stars feared their prize assets would be locked out of the country altogether. With that hurdle cleared, Chemers, who is based in Beijing having moved from the US, is expecting a “good, fair competition” for 2020.

For the first round of fixtures, domestic media rights partner PP Sports streamed the opening games for free and hailed audiences in the tens of millions, way up on the average viewership of just under 7 million in 2019. Liu Yi, secretary general of the CFA, also described the CSL’s return as “a precious result”.

Be that as it may, the delayed CSL start has prompted questions over the financial health of many of the league’s clubs. Tianjin Tianhai were a notable casualty when they folded in May – the first in the top flight to do so. Saddled with estimated debts of US$145 million, the team were offered to investors for free but still drew no interest. In total, AFP has reported that at least a dozen clubs in China’s top three tiers have gone under in the last eight months.

Despite a spending cap being announced in June 2017, Chinese soccer's heavy transfer and wage expenditure also remains under scrutiny. Before the mega-money moratorium, the likes of Brazil’s Hulk and Oscar had swapped Uefa Champions League action for a Chinese payday. Both joined Shanghai SIPG in 2016 and 2017 for reported fees of UK£60 million (US$77.3 million) and UK£45 million (US$57.9 million) respectively. Hulk alone is said to be pocketing UK£320,000 (US$412,000) per week.

CSL clubs had feared China’s travel ban would stop their foreign players, including the likes of Paulinho, from entering the country

Those numbers are enough to rival any of Europe’s top leagues, but they should come as no surprise. Many CSL clubs have the luxury of owners with cavernous pockets. Guangzhou Evergrande, who re-signed Paulinho – another Brazil international  – for €42 million (US$49.3 million) in 2019, are owned by real estate group Evergrande and ecommerce company Alibaba, who have stakes of 56 per cent and 37 per cent respectively. 

During the fiscal year to March 2019, Alibaba's annual revenue hit US$56.2 billion and in Evergrande's most recently available figures from 2018, it recorded a core profit of US$11.67 billion. It is perhaps a measure of just how catastrophic coronavirus has been for the economy if commercial giants like these are being wary.

“The significant issue is that the clubs are owned by these major corporations who are putting money in,” notes Chemers. “Now their other businesses, in most cases that's real estate, are taking a hit. That might affect how willing they will be to continue with the same level of investment in football knowing now their main business is suffering.”

Despite this, certainly compared to European teams, Chinese clubs are unlikely to be feeling the pinch from a lack of matchday income as it has never been a cornerstone of their business models to begin with.

Players, staff and media are being tested for Covid-19 every week

“Teams regularly operate at a loss and because they're selling tickets for CNY20 to CNY50, which is about US$2 to US$5. The most expensive ticket might be US$40 or US$50,” continues Chemers.

“The ticket prices are so low that they’re not making a lot of money [from them]. The vast majority of teams don't own their stadiums, so they're paying rent. They don't have concessions, there isn't really parking, so there isn't a lot of money coming in on matchdays.”

The fact operating losses are considered the norm in the CSL does little to improve its credibility, certainly amongst soccer’s traditionalists, but that is the fledgling nature of the league. Still only 16 years old, it has taken eye-watering transfers just to get international attention. The potential, though, is gigantic.

The focus now has to be on the domestic market and they have to do a lot more to convince fans locally outside of the big cities.

Brandon Chemers, editor at Wild East Football

Pre-Covid, the GAS and China’s National Development and Reform commission expected total consumer spending in the sports and fitness industry in the country to hit CNY1.5 trillion (US$214 million) in 2020, according to data intelligence company QuestMobile.  

The report, published in July last year, also showed a sharp rise in the overall value of the Chinese sports industry. In 2016, it was valued at $276 billion, an 11.1 per cent annual increase. In 2017, it grew by another 15.7 per cent year-on-year to $320 billion.

In addition, the number of sports and fitness participants in China had increased by 1.7 per cent year-on-year to 64.22 million in May 2019. That is barely a dent in the country’s 1.4 billion population, suggesting room for further growth.

In 2019, the CSL had an average attendance of 24,076 – the 20th highest of any domestic professional sports league in the world. In soccer, this only puts it behind the Bundesliga, Premier League, La Liga, Serie A and Liga MX. The CSL recently announced that 2019 attendances were down slightly by 3.1 per cent. However, Chemers believes the CSL has yet to fully crack the domestic market.

Players are currently staying in a single hotel in Dalian or Suzhou to reduce health risks

“There are cities that are doing well like Beijing, Shanghai and Zhongdu, but the league needs to capture fans outside of there,” he says.

“I’ve seen it in the US with fans who won't even bother with the league just because of the lack of quality compared to what they can see on TV,” Chemers adds, stating that the same applies in China.

Indeed, the CSL faces the unenviable task of competing with long-established, globally popular properties such as English soccer's Premier League and National Basketball Association (NBA). PP Sports reportedly paid UK£550 million (US$708 million) for rights to the English top flight for the three-year cycle running through 2022, while last year Tencent stumped up US$1.5 billion to remain the NBA’s exclusive digital partner through to 2025. 

Even amid political tensions over the UK ban on Huawei’s technology in its 5G network, and the Hong-Kong pro-freedom tweet from the Houston Rockets’ general manager Daryl Morey, both competitions remain popular.

Chemers feels getting people into CSL stadiums so they can “fall in love” with the competition is a necessity for organisers, but admits the league may have missed a golden opportunity, particularly with TV exposure, given the return of other sports worldwide.

Fans watching from home were beamed into stadiums to add to the atmosphere

“This year is just a wash,” he concedes. “It’s going to be especially difficult because usually it would’ve been the off season in Europe and there is no other football to watch. But since the CSL is starting in July, it's starting so late, it's going to end up competing with the Uefa Champions League this year, which will hurt the league.

“The focus now has to be on the domestic market and they have to do a lot more to convince fans locally outside of the big cities.”

Internationally, IMG, which holds the CSL's global media rights, is also in the process of trying to secure new broadcast partnerships. There are fears the agency may have to accept reduced contracts due to their being 30 per cent fewer games this year.

Closer to home, efforts to grow domestically and boost commercial development saw the CFA handing over control of the CSL to the clubs at the end of 2019. Previously, the division was run by a holding company, for which the CFA had a controlling 36 per cent stake in, while its 16 clubs each held four per cent.

Commenting on the move last August, CFA president Chen Xuyuan stressed the need for greater financial independence.

Although shut out for now, the CSL needs to do more to get fans across China into grounds

“The CSL and lower leagues have been rapidly developing in recent years, but our professional leagues are still facing a huge crisis,” he said.

“The healthy development of professional leagues is the cornerstone of Chinese football. Clubs need to be financially independent. We are far from that.

“I think in the future, the CSL and the CFA will be partners. As long as we make the rules clear, there won’t be much conflict between the two and our professional leagues will be able to develop themselves better.”

China’s appetite for sports is unlikely to have abated even in the most testing of years. If anything, the return of the CSL represents another step towards normality, but the pressure remains on. The Xinhua News Agency has reported that the league’s performance will be closely watched and, if successful, may encourage the government to allow the further opening of the sports industry.

With no international events expected for the rest of the year in the country, now could be the moment for China to fully focus on its domestic potential.