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Alibaba leave Greentown hanging to make the CSL rich richer and poor poorer

Amidst the fanfare of Alibaba and Jack Ma’s multi million euro investment in Guangzhou Evergrande, with fans and pundits alike lining up to say express how vital this investment is for Chinese football is, one part of China is not cheering.

Just one month ago, as reported by this website and others, Alibaba agreed to buy 49% of Hangzhou Greentown; Zhejiang’s only CSL club.  With Alibaba’s headquarters stationed in Hangzhou and the club’s owner on the lookout for investment, this seemed like a smart move for Alibaba and a great source of investment for Greentown.  And with the club’s academy currently churning out exciting prospects and investing heavily in youth development, Ma’s money was set to herald a new dawn for the Greentown club.

Greentown Owner Song Weiping has ploughed close to 2 billion RMB into Greentown, but has been forced to cut back his investment as real estate regulations and problems in China’s property market prompted him to focus on his real estate business.  Ma’s money was all set to help bridge the gap between the club’s super rich clubs and the less wealthy midtable sides.

However, just last week, allegedly in a 15 minute phone call, Ma reneged on his deal to invest in Greentown, instead handing over the group’s money to Guangzhou Evergrande in return for a 50% stake in the CSL and ACL champions.  Business trumped football, it seemed, as Ma declared he was investing in entertainment and not football.

Hangzhou Greentown supporters and representatives were left stunned as the deal was announced, with fans claiming that Ma and Alibaba have betrayed the club, particularly with the Alibaba company based in Hangzhou.  Other fans questioned the logic of Ma investing in a club that already is the richest in Asia, bringing in sponsorship revenues of 42 million Euros.

Ma’s investment in Greentown would have brought positive benefits to the CSL, Hangzhou and the national side.  Greentown already boast one of the country’s best youth set ups and the team features a number of young Chinese players.  Alibaba’s money would have helped the club invest further in youth development; not only strengthening the club and the CSL, but also the national side.  It’s likely, however, Ma has seen there is little chance of getting a return on his investment, with Hangzhou’s average attendance’s around 13,000, little sponsorship income and ACL football a long way away.

After two disappointing seasons for Hangzhou, seeing the club fighting relegation and the loss of experienced manager Takeshi Okada, it appeared the club could finally start looking upwards with Alibaba’s investment.  For Hangzhou Greentown supporters, the news has come as a bitter blow to the club, and won’t be easily forgotten.

4 Comments

4 Comments

  1. GZBiffo

    17/06/2014 at 11:16

    Wasn’t part of the reason Jack Ma changed his mind about investing in Hangzhou because Song Weiping wouldn’t let him buy more than a 49% share of the club, and he didn’t want to risk going down the Zhu Jun route? Or did I just imagine that?

  2. Mark Dreyer

    17/06/2014 at 17:48

    It’s not surprising that Hangzhou fans are miffed, but does Ma/Alibaba owe them anything? The company – one of the biggest in the world – is still based there, even though it could easily have relocated somewhere else. Disappointment is understandable, but accusations of betrayal are unfair.

    It’s simply that there are different issues at play here. Ma wants to show Alibaba is not just an e-commerce company, and investing in a proven winner is a sound strategy from a brand perspective. Guangzhou-Evergrande-as-megaclub certainly fits into the overall Chinese Dream plan, so it’s also a smart move politically.

    There is, as you say, the fear that other CSL teams will give up in the face of one-club (or two-club) dominance, but there are plenty of counter examples – look at Atletico Madrid this season, or Liverpool challenging again.

  3. Cameron Wilson

    18/06/2014 at 12:21

    I think the fans feel betrayed because Alibaba were just about to invest in Hangzhou but pulled out at the last minute to invest in another CSL club. Hard to swallow when Hangzhou is Alibaba’s local team. No doubt if I were to research Alibaba’s corporate charter it would include platitudes about “giving to the local community” and “social responsibility” …..but those terms tend to be fanciful everywhere, especially in China. This deal is about a huge company with a lot of money wanting to earn even more money. And certianly not about Alibaba giving back to the community which hosts and supports them.

    On top of all that, the club Alibaba spurned its local football club over for another which already totally dominates Chinese football and needs the investment exponentially less than Greentown. It’s no wonder the Hangzhou fans are raging.

    Whilst absolutely not criticising your perspective Mark, the words you choose say a lot about how this deal is being viewed in general – “brand”, “political” “e-commerce”…. as usual, football itself isn’t the focus and that’s the core problem in China. The game is used and abused here by outside interests and this deal is just another such example of why the focus is still in the wrong place – at the top instead of the bottom.

    You can’t compare Liverpool and Atletico Madrid to the situation in the CSL because of the foreign player limit – neither of those teams are signing up the majority of the English or Spanish national team, in the way Guangzhou Evergrande is signing most of China’s national team. Even if there was the same kind of foreign player limit in Spain and England, there is a substaintal talent pool there for other Spanish/English clubs to choose from. But in China….we all know the standard and depth of talent here is limited that is why one team buying up most of the Chinese national team has a such a big impact on the competitiveness of the whole league.

    And when you have a league like the CSL which has suffered from numerous well-documented problems, and is run by people who put games on in the middle of the working day, locks away fans in stadiums for hours after the final whistle, or obscures their views with concert stages, then the CSL needs all the trump cards it can get in order to attract fans. Yet competitiveness, previously of its trump cards, has been sadly lacking since Evergrande came along

    That is not to blame Evergrande, I have said all along the onus is on other teams to up their game and match Evergrande’s investment and commitment. How can they do that? The only realistic way for this to happen in China is for large firms to invest in other CSL clubs, like Alibaba investing in Greentown……….

  4. Mark Dreyer

    20/06/2014 at 23:56

    Great points, as always. I guess i was looking at more *why* this has happened, rather than what *should* happen in an ideal situation. If a large Hangzhou-based firm doesn’t support its hometown club – and Jack Ma, I would say, on the whole is viewed as one of China’s more ‘philanthropic’ entrepreneurs – then what hope is there of others doing this in the future?

    Given that, there have to be sound business reasons why companies should invest in other clubs in order to challenge Guangzhou Evergrande. Yes, I realize that’s not ideal – as you say, football itself isn’t the focus at this point – but how else do you see this situation changing?

    As per GZBiffo’s point, any further word that the 49% vs 50% issue was the sticking point, or was it more to do with Ma getting drunk with his Evergrande buddy in HK?!

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