Economy

China Wants A Piece Of Europe's Booming Soccer Business

Looking to build their branding and attract a more global audience, Chinese companies are increasingly eyeing the major European soccer leagues.

Atletico Madrid's Raul Garcia and Arda Turan
Atletico Madrid's Raul Garcia and Arda Turan
Li Jing

BEIJING — For Chinese investors, simply sponsoring Europe's soccer teams is no longer enough. The new ambition is to purchase them.

According to news reports, China real estate giant Wanda Group is negotiating to buy a 20% stake in the Spanish soccer club Atletico de Madrid. If the deal is closed, it's likely that Wanda chairman Wang Jianlin will eventually replace current club president Enrique Cerezo.

In 2012, Wanda launched a project called Star of Hope, which sent hundreds of soccer players to clubs such as Atletico Madrid and Valencia to participate in their youth training camps. In June, Wanda purchased Edificio Espana, a landmark building in Madrid, for 265 million euros ($388 million). Investing in a prestigious Spanish soccer club will certainly help Wanda's reputation, giving it a kind of segue into buying more European commercial real estate.

Europe's five major soccer leagues — the English Premier League, the Italian Serie A, the German Bundesliga, the Spanish Primera Liga and the French Ligue 1 — represent world soccer at its highest level. They attract the world's best players and are on the forefront of future of the multi-billion global sports industry. Their major league matches attract not just an audience in Europe but all over the world – it is, simply put, a huge market opportunity.

So Chinese enterprises are increasingly eyeing these European leagues when considering sponsorship opportunities. Since 2014, the Chinese multinational networking and telecommunications company Huawei has signed more than 30 sponsorship deals in 24 countries, of which 70% are sports related. Soccer represents most of Huawei's sports sponsorship deals.

Renren Network, the Chinese social network known as China's Facebook, has become the second Chinese social medium — after Sina Weibo — to sign an agreement with Spain's La Liga club Villarreal, paying it to sport Renren's logo on its jerseys.

Yingli's 2010 FIFA World Cup sponsorship in South Africa turned out to be highly lucrative, lead the Chinese company to extend agreements with FIFA.

Of Europe's top five leagues, Chinese companies seem most interested in the English Premier League. But its sponsorship opportunities are expensive, pushing some to instead invest in the more cost-effective Primera Liga. Dozens of Spanish soccer teams in various leagues have filed for bankruptcy in recent years, and some are forced to sell their jersey sponsorships for super-low prices to survive.

But simply showing a logo on jerseys or billboards has limited influence. Chinese companies are after not just brand-building but also a global audience.

Sponsoring sports events is a complex game of navigating negotiations and business rules. It's never easy to evaluate whether something so public and so glamorous is actually a good investment. It is crucial to accept the reality that sponsoring sports events doesn't bring an immediate return on investment. It will take a lengthy incubation period for Chinese companies to make the most of what sports can bring to brands with international ambitions.

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Green

In Argentina, A Visit To World's Highest Solar Energy Park

With loans and solar panels from China, the massive solar park has been opened a year and is already powering the surrounding areas. Now the Chinese supplier is pushing for an expansion.

960,000 solar panels have been installed at the Cauchari park

Silvia Naishtat


CAUCHARI
— Driving across the border with Chile into the northwest Argentine department of Susques, you may spot what looks like a black mass in the distance. Arriving at a 4,000-meter altitude in the municipality of Cauchari, what comes into view instead is an assembly of 960,000 solar panels. It is the world's highest photovoltaic (PV) park, which is also the second biggest solar energy facility in Latin America, after Mexico's Aguascalientes plant.

Spread over 800 hectares in an arid landscape, the Cauchari park has been operating for a year, and has so far turned sunshine into 315 megawatts of electricity, enough to power the local provincial capital of Jujuy through the national grid.


It has also generated some $50 million for the province, which Governor Gerardo Morales has allocated to building 239 schools.

Abundant sunshine, low temperatures

The physicist Martín Albornoz says Cauchari, which means "link to the sun," is exposed to the best solar radiation anywhere. The area has 260 days of sunshine, with no smog and relatively low temperatures, which helps keep the panels in optimal conditions.

Its construction began with a loan of more than $331 million from China's Eximbank, which allowed the purchase of panels made in Shanghai. They arrived in Buenos Aires in 2,500 containers and were later trucked a considerable distance to the site in Cauchari . This was a titanic project that required 1,200 builders and 10-ton cranes, but will save some 780,000 tons of CO2 emissions a year.

It is now run by 60 technicians. Its panels, with a 25-year guarantee, follow the sun's path and are cleaned twice a year. The plant is expected to have a service life of 40 years. Its choice of location was based on power lines traced in the 1990s to export power to Chile, now fed by the park.

Chinese engineers working in an office at the Cauchari park

Xinhua/ZUMA

Chinese want to expand

The plant belongs to the public-sector firm Jemse (Jujuy Energía y Minería), created in 2011 by the province's then governor Eduardo Fellner. Jemse's president, Felipe Albornoz, says that once Chinese credits are repaid in 20 years, Cauchari will earn the province $600 million.

The Argentine Energy ministry must now decide on the park's proposed expansion. The Chinese would pay in $200 million, which will help install 400,000 additional panels and generate enough power for the entire province of Jujuy.

The park's CEO, Guillermo Hoerth, observes that state policies are key to turning Jujuy into a green province. "We must change the production model. The world is rapidly cutting fossil fuel emissions. This is a great opportunity," Hoerth says.

The province's energy chief, Mario Pizarro, says in turn that Susques and three other provincial districts are already self-sufficient with clean energy, and three other districts would soon follow.

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