British soccer club West Bromwich Albion announced on Friday it was being sold to a sports company owned by little-known Chinese entrepreneur Guochuan Lai, marking yet another Chinese acquisition of a top-flight European football club.
Jeremy Peace is ending his 14-year stint as chairman of the 138-year old club after the British businessman agreed to sell to Yunyi Guokai (Shanghai) Sports Development, controlled by Lai. The financial terms of the transaction were not disclosed.
In a letter to West Brom fans, Lai said acquiring the club, based in England's industrial Midlands region, was a great investment from a business standpoint because it is debt-free and financially sound.
But he did not hide the fact he is motivated — at least in part — by the thinking of senior government officials. “There is also a real commitment, strongly supported by the government, to develop football and its culture in China,” Lai said in the letter.
Many market observers believe China’s growing interest in soccer originated from President Xi Jinping, himself a football fan and a strong supporter of the development of the sport.
An eye on the ball
Chinese companies are investing heavily in domestic football teams, splashing out big fees and wages to bring top-tier football players to China. Since last year, they have extended their reach out of the country to purchase majority stakes in high-profile football teams overseas.
Dalian Wanda was the first Chinese company to take a meaningful stake in a European soccer club, having bought a 20% stake in Champion League finalists Atlético Madrid of Spain last year.
Retail giant Suning Commerce Group bought a 70% stake in Italian heavyweight Inter Milan in June, and Fosun International acquired England's Wolverhampton Wanderers — West Brom's near neighbours and deadly rivals — late last month.
While those deals were made by high-profile companies with a solid reputation at home, the West Brom deal is also a reminder that buying into soccer can be an attractive way for businessmen with a low public profile to step into the limelight.
Lai, West Brom’s buyer, is little known in China. In a public statement, the club said Lai built his career assisting with the development of Palm Eco-Town Development, a Shenzhen-listed landscape design and construction company.
Lai does not sit on the board of directors although he is the second largest shareholder with an 11% stake, according to regulatory filings.
He will be joining little-known private investor Tony Xia Jiantong who took over English Championship club Aston Villa - also based in the Midlands - in June this year.
Lifelong fan?
Lai claims to have been following West Brom for many years. The 42-year old Chinese tycoon said he first became aware of the club when it was invited by the Chinese government for an exhibition match in 1978, becoming the first English football club to play in China. The club's tour was captured by an infamous British television documentary, in which a player is heard to say of the Great Wall: "You've seen one wall, you've seen them all."
Commonly known as the Baggies, West Brom have been in England's top-flight Premier League since promotion in 2010. The league is the world's most lucrative, having enjoyed exponential growth in television income from Britain and, increasingly, Asia.
But glory has been in short supply for the Baggies, who last won Britain's FA Cup in 1968 and last topped England's highest league almost a century ago. The club lacks the glamour, international profile and commercial value of giants such as Manchester United, Liverpool and Arsenal, but Lai can perhaps take heart from last season's Premier League champions — Thai-owned minnows Leicester City.
