Withdrawing Clubs
Withdrawal of clubs in the middle or just before the season has become commonplace in the current time of crisis. The lower leagues of England and Italy are shaking, and small clubs have tried to tighten their belts as much as possible. But nothing compares with the history of the strongest Chinese club, which recently disbanded. Telecomasia.net talks about this situation and how it could affect European soccer.
Chinese soccer has been shaken more than any other in the past year. In February, the Suning Group, which owns Jiangsu, announced that it was in dire financial straits because of the pandemic, and in the middle of the month the head of the organization, Zhang Jindong, announced maximum cuts in all costs. At the moment, the company’s financial obligations amount to about one billion euros. First of all, the cuts affected the company’s non-core assets, which included the Jiangsu system with the women’s and youth teams and the soccer academy.
Teixeira brings the championship and refuses to sign a new contract
In general, the problems within the club became known even in the middle of last season, when information about delays in salary payments appeared. There were even rumors of a strike in China, but Jiangsu denied them. During the year, the club’s debts increased to $90m, and their owners could not clear them.
“Due to the overlap of various uncontrolled events, Jiangsu cannot guarantee the effective continuation of operations. In this regard, the football club will cease its activities,” the Chinese team said in a statement.
Jiangsu’s championship itself was a big surprise, considering all the accumulated problems. In the final, Jiangsu defeated the main favorite of recent seasons, Fabio Cannavaro’s Guangzhou, in two games.
But immediately after the season ended, Jiangsu leader Alex Teixeira, who scored the winning goal in the final, announced that he would not renew his contract with the club. And in early February, the Romanian coach Cosmin Olaroiu left the team. Then came the first rumors that the club will withdraw from the championship.
The pandemic also affected Inter Milan, another Suning Group project
Given the recent news, there are more and more rumors about the main sports project of the Suning Group, Italian Inter, which is currently leading in Serie A. Some experts believe that soon the Italian side will be on the verge of bankruptcy.
The Chinese have invested more than €600m in Inter in the five years they have owned the club, but the Nerazzurri showed a loss of €100m last season. Consequently, the Italian league leader’s debts have increased significantly.
And all this happened against the backdrop of the August decree of the Chinese authorities. It imposed several restrictions on the investment of local capital in foreign non-strategic sectors of the economy, which includes soccer. That is, the previous level of infusion of funds cannot be maintained.
The company plans to raise more than €200m by June, otherwise, the club will not be able to cover its financial liabilities. For example, the Chinese side owe €51m to Manchester United and €12m to Tottenham. If the Chinese cannot find a new source of funds by the end of the season, they will have to sell Inter’s assets. Consequently, there could be a massive sell-off.
This whole situation is very similar to what happened to another club from Milan led by Chinese investors. Rossoneri Sport Investment Lux, led by Li Yonghong, took loans from American hedge funds but was unable to fulfill its obligations. Now the situation seems to be getting better, and Milan could qualify for the Champions League for the first time in eight years. Yet experts believe that Inter should avoid such problems. After all, the sum of €200m is relatively small, given the brand and possible prospects.