Sunday, August 28, 2016

The unknown costs of China’s state-sanctioned soccer club spending spree

As rumours sweep the football world that China's Everbright is set to launch a £800 million takeover of English Premier League club Liverpool, Simon Chadwick, Professor of Sports Enterprise at Salford University Manchester, writes the current windfall of Chinese cash pouring into Europe’s football clubs may be about more than just chasing glory and winning trophies:  

FOR THE FANS of some European football clubs, it must seem as though Christmas has come early. Inter Milan, Granada, Aston Villa and Wolverhampton Wanderers have all passed into the hands of Chinese owners, immediately raising expectations among the fans of better times ahead for their beloved and in some cases beleaguered clubs.

China’s voracious appetite for acquiring European football clubs – part of a broader state-sanctioned push to become a global power in the world game – may well prove to a blessing for some fans and their clubs, if the ‘financial bonanza’ they anticipate ultimately transpires. From this, one gets the sense from many fans that they are prepared to accept Chinese investment at face value. That is, so long as there is a promise of money and success many fans are often largely unquestioning of new club owners.

The likes of Tony Xia at Aston Villa and the Fosun Group at Wolverhampton Wanderers have thus been welcomed with open arms. Such acceptance, it seems, is however premised on a noughties notion of football club ownership. This type of ownership is epitomised by Roman Abramovich’s time at Chelsea. It still is not clear why the Russian bought the club, but so long as he keeps on spending and the team keeps on winning, then many fans will remain happy.

But this is no longer the noughties, and the sugar-daddy days of seemingly aimless or vanity-driven football club purchases have gone. This is one reason why football fans across Europe should be rather more guarded in their responses to the sudden influx of Chinese investment.

Some fans almost instinctively frame Chinese investors as being corrupt. Indeed, common perceptions of China among Europeans are often laden with suspicions that Chinese business people are untrustworthy or somehow engaged in illegal or immoral activity. To a certain extent this reputation is warranted, although President Xi Jinping and state authorities in China have sought to eradicate corruption at all levels of Chinese business, including football.

Prevailing perceptions of Chinese business corruption are somewhat unfair, although hardly helped by the differing approaches to governance evident in Europe and in China.

Whatever the reality of corruption or the state of governance might be in China, it nevertheless remains important that European football fans are not easily seduced by an expectation of instant wealth for their clubs. After all, the likes of Xia, Wang Jianlin and Hui Wang are not local people with an intense passion for their local clubs. They are getting into football for very different reasons.

In simple terms, a club like Granada in Spain or Inter Milan in Italy is an acquisition, a property that is intended to add value to the Chinese buyer’s business portfolio. But the typical Chinese business portfolio is one that is deeply embedded in a state-led operating environment, where decisions are as likely to be political as they are based on rational economics. As I recently wrote here, being publicly seen to support state policy is a wise move on the part of a Chinese entrepreneur.

European fans should therefore be aware that what, for example, Fosun does at Wolves will be driven more by the offices and conventions of Chinese government than by fan sentiment on the terraces of the club’s stadium Molineux. Also, fans should remember that Chinese business culture does not operate on the basis of ‘something for nothing’. In fairness to China, businesses everywhere tend not to operate on this basis. However, China has proved to be particularly adept at playing what one might call ‘the long game’ in its business relationships.

At one level, this is a reflection of the principles of guanxi, which is a social phenomenon built upon mutual trust. Trust in Chinese business is crucial to success, and the basis upon which commercial relationships function. For the Chinese, trust is built-up over a long period through repeated engagement and interaction. At the heart of trust is reciprocation, which is essentially premised on the notion of ‘I give to you and you give to me’.

For example, Europe’s football fans would be wise to reflect upon China’s use of stadium diplomacy over the last decade. While many people may think that China is new to football, the country long ago proved that it is highly adept at using the sport in order to serve its national interests. As Rachel Will expertly outlined in the World Policy Journal, China has used sports stadium construction projects as the basis for securing access to key resources from across the globe.

In one case, Costa Rica was gifted a new national stadium worth US$100 million by the Chinese government. In another case, Antigua was awarded a US$60 million grant in order to create 20,000 new seats for the Cricket World Cup. Yet it is in Africa where China has most vigorously pursued its goals, placing sport and stadia centre-stage of a resource acquisition strategy. Indeed, one is hard-pressed to find an African nation that hasn’t benefitted from China’s generosity.

In the case of Angola, which staged the African Cup of Nations in 2010, had it not been for Chinese help it is unlikely the country would have been ready for the tournament. It is no coincidence that Angola is one of Africa’s largest oil producing nations, and it is no surprise that in the years since the tournament China has become one of the world’s biggest purchasers of Angolan oil. Whether it is mineral resources, food or otherwise, the Chinese don’t invest for nothing.

The current spate of interest in English football clubs by prospective Chinese buyers should therefore be no surprise. Indeed, a recent article in The Guardian highlights the way in which football has been used by the British government to lure Chinese investors.

Over the last six years, former British Chancellor George Osborne actively courted Chinese inward investment as he drove forward his Northern Powerhouse agenda. One of the key enablers for this was Osborne’s HS2 rail project, which is planned to run from London to Birmingham and on to Manchester, Liverpool, Leeds and beyond.

In late 2015, Chinese Media Capital acquired a 13 per cent stake in Manchester City, a club at which Osborne has over the years been seen watching games. City’s stadium would be directly adjacent to the proposed HS2 route into Manchester. Aston Villa and Wolverhampton Wanderers are part of the Birmingham conurbation through which HS2 will also pass. Another local club, West Bromwich Albion, is also strongly rumoured to be on the verge of a Chinese takeover.

Follow the railway line up to Merseyside, and there are rumours too of Chinese interest in acquiring Liverpool. Then on to Leeds, and the story is the same. And in Sheffield. And in Hull. Surely it is only a matter of time before Newcastle United drifts across the Chinese investment radar?

There are likely to be some very big, highly lucrative construction, property development and related commercial opportunities that emerge from the proposed HS2 line. The Chinese know this.

As football fans head into the new European football season, those whose clubs are now owned by Chinese investors will no doubt by optimistically looking ahead. However, these fans need to be aware that, unlike them, their clubs’ new owners are likely to have their eyes on a much bigger prize than a league title.

Simon Chadwick is ‘Class of 92’ Professor of Sports Enterprise at Salford University, Manchester in the UK, where he is also a member of the Centre for Sports Business. First published in The Asia and the Pacific Policy Society Policy Forum. Read the original article.

See also: European football: meet soccer's 'hot money' new club owners from China (21 July 2016);  China’s push for FIFA World Cup victory (through taking over the world game) (19 June 2016); Chinese football and future power: not simply in the sport to play the game (23 Apr 2016); China's clear signal to the global football game: the centre of power is shifting (10 Feb 2016); Do Chinese fans prefer traditional football clubs? (9 Jan 2007); Report: Still a market for ManU tours to China (29 Sep 2005)

Friday, August 26, 2016

As surveillance tightens, Islamic State returns to soccer for recruitment

Coming under under increased military pressure in Syria and Iraq and desperate to project a degree of normalcy in areas it still controls, the the Islamic State (IS) appears to be turning to sports and football in particular. According to Dr James M Dorsey, a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies in Singapore, IS attitudes towards soccer are complicated by the fact that many jihadist and militant Islamist leaders are either former football players or soccer fans:

ABU OTAIBA, THE nom du guerre of a self-taught imam and Islamic State (IS) recruiter in Jordan, uses soccer to attract recruits. "We take them to farms, or private homes. There we discuss and we organize soccer games to bring them closer to us,” Abu Otaiba told The Wall Street Journal in a recent interview.

Abu Otaiba said he was recruiting outside of mosques because they “are filled with intelligence officials.” Mosques serve him these days as a venue to identify potential recruits whom he approaches elsewhere.

A similar development is evident in Jordanian universities where sports clubs and dormitories have become favoured IS hunting grounds because they so far don’t figure prominently on Jordanian intelligence’s radar.

IS’ use of soccer reflects anthropologist Scott Atran’s observation that suicide bombers often emerge from groups with an action-oriented activity. It also is symptomatic of jihadists’ convoluted relationship to a sport that they on the one hand view as an invention of infidels designed to distract the faithful from their religious obligations and on the other hand see as a useful tool to draw in new recruits.

Attitudes towards soccer are complicated by the fact that many jihadist and militant Islamist leaders are either former players or soccer fans. Islamic State caliph Abu Bakr al-Baghdadi was a fervent soccer player while in USA prison in Iraq where he earned the nickname Maradona after Argentinian superstar Diego Maradona.

Osama Bin Laden was believed to be an Arsenal FC fan who had his own mini-World Cup during the war against the Soviets in Afghanistan in the 1980s. Teams formed by foreign fighters based on nationality played against one another in downtime. While in exile in Sudan, Mr. Bin Laden had two squads that trained three times a week and play on Fridays after midday prayers.

Hassan Nasrallah’s Hezbollah manages clubs in Lebanon while Hamas’ Ismail Haniyeh, a former player has organized tournaments in Gaza.

An online review conducted in 2014 by Vocativ of jihadist and militant Islamist Facebook pages showed that their owners often were soccer fans. However, jihadist empathy for the sport does not stop them from targeting local games in a geography stretching from Iraq to Nigeria as well as big ticket European and World Cup matches whose live broadcasts hold out the promise of a worldwide audience.
New book by James M Dorsey:
The Turbulent World of Middle East Soccer
A IS suicide bomber blew himself up in March in a soccer stadium south of the Iraqi capital, killing 29 people and wounding 60. The bomber chose a match in a small stadium in the city of Iskanderiya, 30 miles from Baghdad. The London-based Quilliam Foundation reported at about the same time that boys in IS military training were instructed to kick decapitated heads as soccer balls.

Crowds in IS’ Syrian capital of Raqqa were forced in July to attend the public execution of four players of the city’s disbanded Al Shabab SC soccer team -- Osama Abu Kuwait, Ihsan Al Shuwaikh, Nehad Al Hussein and Ahmed Ahawakh -- on charges that they had been spies for the People's Protection Units (YPG), the Syrian Kurdish militia that is in the frontline of confronting IS on the ground in Syria.

Yet, Breaking with its past muddled banning of soccer despite its use of the sport as a recruiting tool, IS has urged boys in various towns including Raqqa in Syria and Mosul and Tal Afar in Iraq to participate in what it dubbed the Jihad Olympics.

Boys, despite a ban on soccer jerseys and the execution of 13 kids in early 2015 for watching an Asian Cup match on television, play soccer or tug of war during the events and are awarded sweets and balloons if their team is victorious. The boys’ families are invited to watch the games.

IS appears to have been struggling with the notion of using soccer as a way of placating its population and projecting normalcy for some time. The group authorized the showing of the FC Barcelona and Real Madrid derby a week after the attacks in November 2015 in Paris that targeted a major soccer match among others, but at kick-off rescinded the permission and closed down cafes and venues broadcasting the match because of a minute’s silence at the beginning of the game in the Madrid stadium in honour of the victims of the attacks in the French capital.

A precursor to IS’ Jihad Olympics was an exemption of children from the ban on soccer as well as video clips showing fighters in a town square kicking a ball with kids. Confusion within the group about its policy towards soccer is reflected in the fact that age limits for the exemption vary from town to town. In Manbij, a town near Aleppo recently conquered by US-backed militias, children older than 12 were forbidden to play the game while in Raqqa and Deir-ez-Zor in eastern Syria the age limit is believed to be 15.

Similarly, foreign fighters have been allowed to own decoders for sports channels and watch matches in the privacy of their homes.

“IS policy towards soccer is driven by opportunism and impulse. The group fundamentally despises the game, yet can’t deny that it is popular in its ranks and in territory it governs,” said a former Raqqa resident.

Dr James M Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of W├╝rzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog and a just published book with the same title.