Recently on my social media feeds I’ve been sensing a reasonable amount of vitriol and dismissive nonchalance towards the recent heavy financial investments being made into China’s top tier, the Chinese Super League.
You’ve probably seen the headlines, with some notable transfers from European and Asian clubs into the 16 squads who will battle for the upcoming season including Ramires from Chelsea, Jackson Martinez from Atletico Madrid, and Alex Teixeira spurning the advances of Merseyside’s fading superpower to sign for a rising one in the East. In reality, the number of high-profile names moving to China is relatively small and it has been the media attention around them that has made the whole saga seem bigger than it is.
The Chinese Distraction – Is Chinese Super League Affecting MLS?
That aside, the gripe that crops up more often than not is that MLS now has competition for signing top players from Europe. That, on the face of it appears to be true, but if we delve down into the realities the Chinese investment in players is actually completely irrelevant.
China….In Your Hand
MLS has, and still does, worked on a principle of “slowly but surely” and finances in the league are very tightly controlled. Haunted by the previous failings of the NASL, the new breed of owners want assurances that their investments will not crash and burn. Given that the concept of investing in sporting teams in the US is generally based around billionaires “graciously” funding franchises in a closed league because they do not accept that any such investment could attract risk, the approach taken by MLS is not particularly surprising. Layer this with the underlying parity expectations of fans, who will be disinterested in a team unless it has a chance of winning the top prize, and you’ve already created an environment that is somewhat unique within football’s global infrastructure.
However, the Chinese approach is a hybrid of the European model where investment in a team must be continuous otherwise it risks being left behind, and the clearly political favour-making incentive to the super-wealthy Chinese who have identified that the Chinese president himself wants to promote the game and investing in players who will raise the profile of the team is certainly going to assist in scoring points in an economic and political sense.
So before we even get into much detail we’ve already determined that the concept of investing in a team holds disparate meanings. Investing in the US means expecting a financial return; in China, it means gaining political capital. There is often comment that the Chinese model will soon run out of money if it doesn’t create a financial return. This is a falsehood because creating a positive return is not the primary incentive.
Going one step further, the whole issue of funding a team is on a very different scale. One of the biggest and most well-known teams in China, Guangzhou Evergrande, are part owned by two companies with Chinese interests – Alibaba and Evergrande Real Estate. The former of those has a market capitalisation of over US $150 billion, the latter a mere US $8.4 billion. These are owners who aren’t going to be running out of money in the near future, and paying a few million dollars in transfer fees is not going to be material to their overall operation. A subsequent part-floatation of the team valued it at US $1.61 billion.
The Price Is Right
If we return to the subject of transfer fees, the notion that the Chinese investment is stopping players going to MLS is also misleading. Undoubtedly the Chinese clubs have potentially had to offer large salaries to the player concerned to encourage him to move but the transfer fee itself is a matter solely for the selling club to consider. Would Atletico have accepted less than the €42 million fee offered by Guangzhou? Potentially, but the likelihood was that a release clause was triggered. Either way, there was nothing stopping other clubs from offering similar sums of money, and in the absence of any such offer the player would likely have simply continued to play where he was.
So ask yourself this question. Would MLS have been in a position to make an offer, both to Atletico Madrid as the selling club and Jackson Martinez as the player, which would encourage him to move to MLS in preference to China or Spain? The transfer fee itself was not much different to the salary cap for half of the teams in the league combined, so completely impossible for an MLS team to subsidise on its own. His salary at Madrid was likely far surpassing anything an MLS DP would expect, and salaries in China are reported to be in the region of $400,000 a week upwards.
Remember also that there is added incentive for the Chinese clubs to retain their top-flight status, as they operate a pro/rel model. However, investors into the current teams are obviously fully aware of this and, therefore, it is not as if they have any sort of expectation that their investment is guaranteed to make a return unless the team can sustain success on the pitch.
In Conclusion
The bottom line in this is that MLS and CSL are operating in very different economic environments, with very different expectations from owners about what the financial outlays on a team will create for them. MLS, as it stands, is incapable of investing the sums of money required to bring the type of player that the CSL is buying, and even if the Chinese were not buying them then there is a very high likelihood that the next highest offer would be by one of the teams in a far wealthier European league. If there is an instance of MLS having been the second choice on the list for the players who have recently transferred to China, then it will be incredibly remote.
In the meantime, MLS simply needs to ignore the distraction of China and either stick to its current financial model or otherwise accept that if it wishes to be part of the global marketplace for talent it will need to pay global prices.
Main Photo: Kevin Frayer, Getty Images
