Chinese conglomerate is preparing a revolution in European football

Dalian Wanda Group, China’s richest man, Wang Jianlin, has said it is in talks in Europe to create a new tournament for the continent’s most prestigious football clubs. Wanda is promising them more seats than the UEFA Champions League and significant growth in TV revenues.

This comes amid attempts by China to increase its influence in football. In recent years, Chinese companies have spent billions of dollars buying stakes in European clubs and sports agencies, prompted by President Xi Qinping’s desire to transform football-loving China into a nation capable of winning the World Cup.

The conglomerate’s goal is to garner support for the national championships of the “big five” TV markets in Europe (England, Spain, Italy, France and Germany), which account for most of the Champions League’s TV revenues, said Marco Bogarelli, strategy director at Wanda Sports Holding. According to him, negotiations are already underway with the Spanish example and the Italian Serie A, and after the end of Euro 2016 it is planned to start with the English Premier League, German Bundesliga and French League 1. “Many talented players prefer to play in Asia rather than Europe, – says Bogarelli. – One day in Asia there will be money for Cristiano Ronaldo <...> It is in the common interest of these five leagues that football in Europe grows stronger while maintaining the leadership. ”

Wanda also hopes to get support from UEFA, but is otherwise willing to propose the creation of a separate tournament. As Bogarelli notes, there should be more freedom in the future based on the needs of clubs and leagues. A senior official from one of the five leagues called the proposal “realistic” and “well thought out.”

UEFA is already under pressure to seriously change the format of the Champions League due to the desire of the leading clubs to secure higher matchday earnings and better commercial contracts. “This is not the first time that there has been talk of a possible creation of a separate league, and perhaps not the last,” he says. O. UEFA General Secretary Theodor Theodoridis. “In making any decisions, we will take into account not only the financial benefits of the clubs, but also the benefits for the game and its development on the continent.”

The proposals are linked to the interests of a handful of clubs from Spain and Italy, notably Real Madrid, the reigning Champions League winner and the richest club in the world, said two people familiar with the negotiations. Real Madrid did not respond to requests for comment.

UEFA hosts two club competitions annually – the Champions League, which features 32 of Europe’s top teams, and the less prestigious Europa League. Wanda proposes to create a single tournament with more than 32 but less than 64 clubs. She wants to guarantee a minimum of six seats for the representatives of the five major national championships. For comparison: now England, Germany and Spain have four places in the Champions League, while Italy, France and Portugal each have three. The rest of the European countries should have fewer seats in the new tournament. This year, Wanda’s offer could benefit such well-known clubs as Inter Milan and Manchester United, which last season failed to rank high enough in their championships to compete in the Champions League.

Wanda argues that the new tournament will be more attractive to TV people, as well-known clubs will play with each other more often. Wanda offers matches over two-week cycles on Tuesdays, Wednesdays and Thursdays. She estimates that broadcast revenues will grow by 30-35%. British BT acquired the rights to broadcast the Champions League and Europa League over three years for 897 million pounds ($ 1.16 billion), and Italy’s Mediaset for 700 million euros ($ 776 million).

The Spanish example confirmed that it was studying the proposals, but declined to comment further. Serie A, Bundesliga and Premier League also declined to comment. According to Didier Quillot, head of the French Professional Football League (LFP), although he is aware of the clubs’ dissatisfaction with the current situation, he is “unfavorable” to Wanda’s proposals and has not approached him.

Negotiations are taking place against the backdrop of the absence of a leader from UEFA. In May, the president of the organization, Michel Platini, resigned due to a corruption scandal, and a new leader is to be elected in September.

Clubs from Spain, France and Italy, which are more dependent on income from participation in European competitions than their competitors from England and Germany, may arouse the greatest interest in the proposal. For example, each English club will earn at least £ 100m this season thanks to a £ 5.1bn Premier League deal with Sky and BT, while German clubs will benefit from a € 4.6bn deal with Sky and Eurosport. But clubs from less powerful leagues are against proposals that will reduce their participation in European competitions.

The new tournament will help Wang, whose fortune is estimated at $ 28.7 billion, to create a global ambition in the entertainment industry. Wanda already acquired a 20% stake in Atlético Madrid for 45 million euros in 2015, the organizer of the Ironman triathlon for $ 650 million, and a number of mountain and golf resorts around the world. Also in 2015, she paid $ 1.2 billion for Infront Media, headed by the nephew of ex-FIFA president Sepp Blatter, which sells TV rights to major sports events. Infront, part of Wanda Sports Holding, are in talks about this new tournament.

However, Wanda will have to deal with complex football politics, says a senior European official: “It’s naive to assume that since we have the money, we can do it.”

Translated by Alexey Nevelsky



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