China to revamp Chinese Super League as club debts soar
China is making plans to reform the Chinese Super League (CSL) amid fears, another leading club, Guangzhou FC, is on the verge of financial collapse.
Guangzhou F. a club owned by property developer, China Evergrande Group, is in the midst of a major debt crisis with liabilities of $300billion. The Bloomberg news agency, citing people familiar with the plans, said the club last week appealed to the government of Guangdong province for support.
The government could take a 10-to-15 per cent stake in the team, with a local state-owned entity to acquire the remaining interest, but the club, which has also been looking to sell its professional players to raise money, could also be disbanded.
In February 2021, Jiangsu FC, a club side in the Chinese Super League announced it was ceasing operations over critical financial reasons.
The club said it had been seeking potential buyers but had failed to secure investors before the registration deadline for the 2021 Chinese Super League season and was therefore forced to disband all its football teams.
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Jiangsu FC was owned by Chinese retail conglomerate and sports industry investor Suning. The club was named Jiangsu Suning before changing its name this year in line with new Chinese Football Association rules.
Chen Xuyuan, President of Chinese Football Association (CFA) has warned that reform is necessary to save Chinese soccer’s finances and the country’s professional leagues.
“To end Chinese soccer’s spending spree, we need to be resolute,” Chen Xuyuan, the Chinese Football Association president said in an interview recently. “Many investors have said it’s unsustainable to keep operating like before. If we don’t take any action, we could face the wider financial collapse of Chinese soccer.
“That is unacceptable. We need to continue with the salary cap and spending restrictions on clubs. That’s a joint decision of the CFA and investors. The spending of a Chinese Super League club is three times higher than a Japanese top-tier club, and in some cases, the salaries of our players can be ten times higher than theirs.
The latest casualty of the league’s financial woes is Jiangsu FC. The club formerly known as Jiangsu Suning ceased operations in late February, just months after being crowned Chinese Super League champion for the first time.
Tianjin Jinmen Tiger, formerly known as Tianjin Teda, is also expected to miss out next season after reportedly amassing unpaid player wages and failing to submit the relevant financial registration forms on time.
Before the start of the 2020 season, 16 teams of all levels, including then CSL outfit Tianjin Tianhai, were forced to quit China’s pro ranks due to money troubles. However, Chen claims the outlook this year is not quite so bleak.
“Last season more than a dozen clubs quit the professional leagues, and most of them were second-and third-tier teams. This year, based on the current audit situation, about six or seven teams will quit due to financial problems,” he said.
“We’ve noticed that some clubs are facing operational problems, and we are communicating closely with them. It’s very hard for Jiangsu to keep playing next season, so they’ve decided to cease operations.
“Tianjin Teda is also facing difficulties. We are also waiting for further confirmation about their plans for next season. The CFA and the General Administration of Sport of China are paying close attention to these problems and trying to find solutions. Personally speaking, it truly is a pity to see a CSL champion face such a situation.”
Bloomberg reported that other local governments are preparing to step in to support teams facing growing pressure on their corporate owners. Governments at the city or provincial level are considering taking minority stakes in CSL teams, with rescue plans dependent on the various political and financial situations in place. The measures could come before the end of the year.