The Magic Touch: The Success of Guangzhou Evergrande (Part II)

This is Part II of a two-part post on Chinese soccer club Guangzhou Evergrande.  To read Part I, click here.

Some people think that the success of big-spending football clubs is beneficial because it can bring immediate prosperity, while others believe that this pattern is not sustainable. However, people may cannot label this phenomenon good or bad since to a certain extent, the occurrence of these new operations in the sports industry is inevitable.
But in China, it is widely acknowledged that the success of Guangzhou Evergrande has brought much more benefits than harm to the stagnant Chinese soccer industry (and even to the nation as a whole). Most importantly, the success of Guangzhou Evergrande has rekindled Chinese belief in soccer. During the past ten years, Chinese soccer teams constantly went downhill and most fans became pessimistic of the future of Chinese soccer. Empty stands were common in matches of the Chinese Super League.

However, things have changed as mighty Guangzhou Evergrande reaches new milestones like winning the triple crown of three different cups in a single season. Before the final of AFC Champions League, all 40,000 tickets were sold out in three days. More surprisingly, many eager fans spent 3,000 yuan (nearly $500) buying tickets that were originally sold at 400 yuan (about $65). It was impossible to see these scenarios outside the stadium five years ago, and people believe this desire is the key to further development.

The sold-out Final

Furthermore, because of the enthusiasm and hope of soccer lovers, an increasing number of parents would like their children to play soccer and to become professional players. From a well-known Chinese reporter’s words, Ma Dexin, there are only 42 professional players in the U-15 Chinese national team now. But in the next several years, with the profound change in people’s attitudes, the talents pool and growing youth teams could solve the problem of insufficient numbers of young players.

 More importantly, in light of the success of Guangzhou Evergrande, an increasing amount of people and companies will be encouraged to invest in soccer industry because of its relative profitability. The effect of advertisement and the possibility of replicating Evergrande’s success could drive numerous firms and individuals into the space. Because of the professional-style management group at Evergrande, the club has managed to remain financially healthy despite the massive spending.  Its expected that the club will soon be very profitable.

We also need to strongly point out that because advertisement, the Evergrande group has greatly increased its turnover. Before it purchased the soccer club, its turnover was approximately 30.3 billion yuan (nearly $5 Billion) per year. In contrast, during the last year, the number has been increased to 92.3 billion yuan (over $15 Billion). In view of the bright and prosperous future of Chinese soccer industry, numerous companies may want to enter the market.

This is Part II of a two-part post on Chinese soccer club Guangzhou Evergrande.  To read Part I, click here.