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What's Behind the Football Deal?
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At the beginning of the New Year a lowly China League team put the nation's football in the spotlight. A deal between Sichuan-based Chengdu Wuniu (Five Bulls) and Sheffield United led to the establishment of a new Chengdu Blades Football Club on January 12. Taking a controlling 90 percent stake, the English Championship club, popularly known as the "Blades," is the first foreign club to take over a Chinese team.


The question being asked is whether the deal is about sports cooperation or business speculation? A Xinhua News Agency report on February 10 called the motives of the deal into question. Whatever lies behind the deal there's little doubt that a new chapter in the history of Chinese football has been opened.


Xu Hongtao, the agent who handled forward Hao Haidong's famous one-pound transfer to Sheffield United last year, has been appointed the new club's chairman. Li Bing, Hao's fellow player in the national squad, has been appointed head coach. Li will be assisted by two Sheffield coaches.


Having set foot in China for the first time the Sheffield representatives have approved a three-point agreement that covers paying all taxes according to Chinese law, observing the regulations of the Chinese Football Association and guaranteeing payment of players. These promises have been welcomed by the club's fans.


However, those involved remain tightlipped about the financial details of the agreement. Chengdu Wuniu, founded in 1996, was reportedly short of cash in the 2005 season after a local cigarette company pulled out of a sponsorship deal. "Sheffield have secured a good deal with this arrangement," a source commented.


"Before investing in football in China the Blades spent four years investigating their options," said Xu. "Therefore, it's unfair to suggest that their 'buy in' is nothing more than speculative. They're going to apply the English model to the running of a Chinese club to ensure its long-term and stable development."


Sheffield will invest 20 million yuan (US$2.5 million) to build a new team in the 2006 season with the eventual aim being promotion of the club to the Super League.


Vice Chairman Terry Robinson said the club was already investing heavily in youth development programs and in the future their plan was to send young players and qualified coaches to Chengdu.


The club's Chairman Kevin McCabe, a well-known UK estate agent, believes there are "exciting opportunities" to tap into the local real estate market. Apart from boosting the Blades' popularity in west China, he explained that the part of the deal is related to their commercial interests -- "We wish to generate further revenue from China."


"The western city of Chengdu is growing steadily in affluence," said an analyst. "Many people don't understand why Sheffield chose Wuniu, a club frequently in the relegation zone, as their partner. Actually, football is just one area of interest. Business prospects in the city are of Sheffield."


Football cooperation deals can bring about very good business opportunities, said Wang Jun, a reporter with Titan Sports. For instance, by purchasing Sichuan Guancheng, the province's only Super League club, Shide Group of Dalian, became the leading supplier of building materials in west China, said Wang.


Though initially promising to take responsibility for Sichuan's football development, just four years later Shide changed that stance. It sold its interest in Guancheng seeking 40 million yuan (US$5 million) for Guancheng's registered players. The club was formally disbanded on February 7.


The huge and rapidly growing size of China's football market has led to many international football giants to put China high on their agenda. Following Spain's Real Madrid, Scotland's Glasgow Rangers and now Sheffield United, more and more foreign clubs are expected to take an interest in investing in Chinese football.


However, a chaotic league program and the national team's failing to qualify for the World Cup finals have cast a shadow over Chinese football. It will be interesting to see if the Blades-Wuniu cooperation will help China's football get out of a rut.


( by Shao Da, February 17, 2006)

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