China's Soccer Industry Bubble Contains Potential Risks, People's Daily Says
Yicai Global
/SOURCE : Yicai
China's Soccer Industry Bubble Contains Potential Risks, People's Daily Says

(Yicai Global) Dec. 19 -- While China's Super League's revenues have reached CNY1 billion (USD 145 million) this year, the league's business model has not been upgraded, clubs' revenues remain heavily dependent on investments from parent companies and potential risks should not be neglected, the People's Daily, the official state newspaper, said.

Total expenditure at the 16 soccer clubs in the China Super League totaled CNY9.2 billion in the 2016 season. Transfer fees and salaries of international players and foreign coaches and their teams alone are more than three times this year's revenues.

Market-generated income is CNY3.09 billion, more than half of which comes from sponsorship fees.

The introduction of a slew of favorable policies has made the sports industry a boom industry during the process of China's economic transformation and upgrading.

The soccer industry is in its infancy and investments are huge, yet if a business model fails to be built in one to two years, its future collapse can be easily foreseen, many insiders said.

The soaring value of domestic players, their salary to club profits ratio exceeding the warning threshold and the surging costs of promotion and relegation between the leagues are all bubbles in the soccer industry, insiders said.

Shanghai Greenland Shenhua Soccer Club plans to sign 32-year-old Argentinian soccer player Carlos Tévez for USD42.5 million per year, Argentine media outlet Pasionfutbol reported earlier.

If Tévez accepts the offer, he will become one of the world's highest-salaried soccer players, with an annual salary exceeding that of Real Madrid star Cristiano Ronaldo's estimated after-tax income of USD23 million.

Citing data from whistleblower Football Leaks, German weekly news magazine Der Spiegel recently claimed the world's highest-paid soccer player is Argentine striker Ezequiel Iván Lavezzi, who is currently earning USD56.7 million for a two-year contract with Hebei China Fortune in China's Super League.

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