The Magic Touch: How soccer club with financial obstacle is rescued by fans?

Eibar players celebrating their first victory in La Liga.

With midfielder Javi Lara’s brilliant free kick, Eibar secured a 1-0 win against Real Sociedad in their first fixture of the 2014-15 La Liga season. While many soccer fans were amazed by the performance of Eibar on the pitch in their first ever La Liga appearance, few people realize that the squad accomplish a far more amazing miracle off the pitch.

Located in the north of Spain, Eibar is a small city with a population of 27,000, and the only stadium in the town, Ipurua Municipal Stadium, has just 5,250 seats. By comparison, Bernabeu Stadium, the home of Real Madrid, can hold the entire population of Eibar and still have 58,454 seats remaining. To everyone’s surprise, the SB Eibar has earned two consecutive promotions. In just two years they have gone from the third tier of Spanish football to La Liga this season.

However, at the end of last season, the club realized it had a huge hurdle laid in front of them as they were being promoted to La Liga. According to certain Spanish financial regulations, every La Liga club should have the cash on hand to pay 25% of the average expenditure of all sides in the second tier (excluding the two clubs with highest spending and two lowest spending clubs). The rule was designed to ensure all clubs can attend to its debts. If the teams fails to do so, it will not be allowed to play in La Liga, and even worse, it will be relegated to the third tier. At the moment of their promotion, SB Eibar had just 420,000 euros (544,020 US dollars) in its account. In order to fulfill the requirement, it had to raise 1.72 million euros (2,227,892 US dollars) to reach 2.1 million euros (2,720,101 US dollars), the registered money threshold for this season based on the amount of money spent in the Spanish second tier. Although it may seem quite easy for a top club to raise 2 million euros, it an uphill battle for a tiny club like Eibar. However, the world loves a good underdog story, and Eibar accomplished this miracle.

After failures in seeking individual investors, the board turned to another way of financing - launching a stockholder share plan. Initially, the franchise sold its shares, 50 euros per share, solely to the Spanish public. However, after realizing the capital raised was far from the threshold, it resorted to international fans, an obviously much larger population. During this round of international financing, Chinese soccer fans played a crucial role.

After learning of the financials struggles of Eibar through the media, a large number of fans across China gathered on QQ, the most popular instant messaging software in China, to try and help the club. They discussed different aspects of the plan, they researched for and learned Spanish laws regarding purchasing shares of a company, and then completed the corresponding transactions. During that period, fans had to surmount various difficulties, such as the language barrier, their unfamiliarity with the law, and the inconvenience of international transactions. Eventually, with the support of fans around the globe, Eibar raised the sufficient funds three weeks before the deadline. According to the New York Times, more than eight thousand people from 48 different countries purchased a share of SB Eibar.

Actually, to a certain extent, Eibar followed the history of a number of clubs that did the same thing to save themselves while on the brink of collapse. Currently in England, Wales, and Scotland, there are almost 150 supporter trusts. This method to save a team by selling shares to the public can be traced back to 1992 in England, when Northampton Town was the first club to be taken over by fans. During that season, the club experienced a huge plunge in their standing, and even worse, the debt amounted to 1,600,000 pounds (2,610,000 US dollars). While failing to pay player wages from the last two months, Northamtpton Town released ten senior players and called up several youth players with lower wages, but the results did not improve. In January 1992, the Northampton Town Supporters' Trust was formed with the purpose of raising money to save the club, and becoming involved in the operation of the team. The trust helped the club escape the crisis and the Northampton Town Supporters' Trust is still helping to run the team today.

In terms of fans rescuing their beloved soccer clubs, the cases of Eibar and Northampton Town are just the tip of iceberg, as there are many more passionate and responsible fans who helped saved their teams. From donating to the sports club, organizing fan movement, and even taking over the club, fans have constantly found ways to help their teams in any way possible. 

The Magic Touch: Chinese Soccer Club Going Public?

June 5th, 2014 was a landmark day for Chinese soccer. Jack Ma, the founder of China's largest e-commerce business, Alibaba Group, bought a 50% stake in Guangzhou Evergrande Soccer Club. Ma purchased the top Chinese club for 1.2 billion yuan ($192 million), and aimed to lead the club to new heights. Meanwhile, Jack Ma and Jiayin Xu, the chairman of Evergrande Real Estate Group, announced together that they would take the club public to raise capital by 40% and seek another 20 investors, each holding 2% share .

A Chinese soccer club preparing to go public? It's hard to imagine, given of the depressing state of Chinese soccer at the beginning of 21th century. Guangzhou Evergrande, however, has ascended with a stunning pace, winning all three domestic titles since 2011 and becoming the first Chinese club to take home the Asian club championship this past season.  For Guangzhou Evergrande, floating on the stock market now maybe seem plausible and tangible. Although this is perhaps the first time that a Chinese soccer club prepares to go public, in Europe, it is far less rare. Before making the final decision, Guangzhou Evergrande could learn a lot from the stories of other clubs: both the benefits, and the risks.

Jack Ma (right) and Jiayin Xu (left)

The first soccer club to float on the stock market was Tottenham Hotspur in 1983. In 1982, Irving Scholar, a property tycoon purchased the club. However, he found that the club was operated extremely inefficiently, with more than one million pounds debt left by his predecessor. Soon he figured out that there was only one way to solve this pressing problem. He established a holding company, with the soccer club as a subsidiary, and then floated the holding company on the London Stock Exchange (LSE). The initial public offering raised £3.3 million, which helped the club successfully tackle the debt problem.

Following Tottenham’s successful experiment in raising money through such a new way, (along with the rapid commercialization of the soccer industry) an increasing number of soccer clubs started to go public. By 2000, there were 22 English clubs listed on the London Stock Exchange, the Off-Exchange (OFEX), and the Alternative Investment Market. These offerings raised a total of £167 million , most of which was used to strengthen squads, renovate stadiums, improve liquidity to existing shareholders, and develop commercial operations.

Nevertheless, enthusiasm for investing in soccer clubs faded shortly. After the temporary success, most clubs delisted due to enormous fall of share prices. For instance, Sunderland soccer club originally went public in 1996, with an initial price of 585 pence. Astonishingly, when the club delisted in 2004, its share price had substantially plummeted to 31.4 pence, an epitome of the failure of soccer clubs to float on the stock market.

When it comes to the reasons why soccer clubs could hardly sustain a long term success on the stock market, we need to focus on the nature of soccer clubs: unpredictability.

First and foremost, in soccer industry, the performance of a club fluctuates greatly through a season and always cannot meet expectations from fans and investors. Therefore in many cases, the return is not proportional to the investment, and it is almost impossible for investors to guarantee the return of investing on soccer clubs.

For example, the let's discuss London-based club Queens Park Rangers (QPR). During the 2012-13 Premier League campaign, QPR spent more than £41 million on transfer fees, landing more than ten high-profile players, and saw their wage bill increase by almost £17 million to £68 million. However, rather than obtaining a substantial income based on its huge investment, at the end of the season, the club announced it made a loss of over £65 million and did not escape from relegation. Companies in non-soccer fields such as manufacturing enterprises, investors can precisely calculate the rate of return, gaining sufficient information to decide whether to invest it with little risk.

Secondly, even if a large amount of investment could improve the performance of a soccer club in a season, it is unlikely to ensure that the soccer club could sustain good form for a decade. It is possible that a franchise which was a favorite to the championship last year has to fight to avoid relegation this season. From investors’ perspective, stable and sustainable performance is preferred.

Additionally, some investors of a club’s stock are die-hard fans, who are eager to support the club. A club may find it difficult to attract investors who are not its supporters. Thus, the stock market of soccer clubs is a thin market, with few bid and ask offers, leaving more volatile stock prices.

So if Guangzhou Evergrande is steadfast in its belief to go public, it definitely needs to tackle these issues with its professional management team. If it is to reduce unpredictability of its stock price, it must develop steadily, and to make the investment-return ratio more measurable. Guangzhou Evergrande needs to emulate Manchester United, not only a survivor, but a victor in the cruel stock market.

With a strong base of fans around the globe, the most outstanding strategy Manchester United has been applying is business diversification. Man U significantly expanded its business fields, such as derivative products and new media, in a global context and therefore diversified its commercial operations. Thus even if the club cannot radically get rid of the unpredictability on the pitch, the performance off the pitch has become a relatively larger fragment of the overall operation. With many other stable and measurable channels beefing up the development in a long term, the Red Devils have diversified risk leading to better risk management.

If Guangzhou Evergrande can eventually go public and survive on the stock market in the future, it will start a new chapter in Chinese soccer industry. It is quite possible to obtain huge financial investment and develop to a better global. More critically, after converting to a joint stock company as a requirement to float on the stock market, the club will be pushed to enhance its management and make it more professional. That could positively influence all other Chinese clubs to pursue professionalism in managing sports, a key to reignite the country’s soccer hope.

The Magic Touch: Premier League Broadcasting Revenues

An absorbing Premier League season ended this month, with Manchester City lifting the trophy after an undramatic win over Newcastle United. No miracle came for Liverpool, as millions of fans of Reds were left dissapointed. However, they should be delighted to see that in the table of broadcasting payments to clubs this season, Liverpool rank the first, gaining extraordinary £97.5m, even greater than that of Manchester City, which will substantially help them land several quality players this summer for their next season's campaign.

In contrast, at the end of last season, they just obtained £54.8m from braodcasting revenues. This significant surge does not solely happen to top rankers. Surprisingly, even Cardiff, the bottom club this season, earn more TV cash than champions Man Utd did in 2013. Why there is a dramatic increase in broadcasting revenue this season? And how is the TV income split and calculated? We’ll look for these answers soon.

First of all, revenue streams for a professional soccer club fall under three major headings: matchday income, commercial receipts, and broadcasting rights. The money a soccer club takes in on match day is the traditional source of revenue, consisting of money paid before the season by season ticket holders, ticket money from home and away fans, and hospitality packages. The commercial revenue mainly falls into three streams: sponsorship, merchandising, and some ancillary services. Compared to these two streams, broadcasting earnings have become increasingly critical to each club, especially for clubs at bottom of the table. The reason why this part has been also vital now is that Premier League signed new blockbuster contracts to sell broadcasting rights, which have brought unprecedented financial reward for clubs.

In June last year, Premier League owners announced new £3.018bn deal for domestic live rights with Sky and BT for the three seasons from 2013-14, with Sky paying £2.28 billion and BT paying £748 million. Meanwhile, Match of the Day highlights was bought by BBC for £178m. It is estimated that combined with overseas contracts, Premier League, the richest league across the globe, is about to get £5bn broadcasting fee altogether for the next three seasons, an increase from £1.773bn for the previous three-year deal. According to PREMIERLEAGUE.COM , all 20 Premier League clubs were paid around £1.56bn from broadcasting revenue this season, a 60 percent increment compared to the £972million of television revenue the previous season. So how is this large "pie" divided?

In general, £1.56bn income was firstly divided into overseas TV income, domestic TV income and central commercial revenue. As stated by official statistics, after this season, each club equally gained £26.3m for overseas TV income, with a total of £525.9m altogether, and each also equally earned £4.27m for central commercial revenue. Dividing the domestic TV income is a little bit more complicated than overseas one and central commercial earning.

In terms of this model, it takes into consideration three factors. 50% of the sum is shared equally by each club, 25%, the merit payment, is based on finishing position in the league, with £1.2m paid for every place a club finishes in the league, and the remaining 25%, the facility fee, is derived from the numbers of domestic live TV appearance, with £750 thousand paid for every appearance. For example, Manchester City, the champion of this season, got approximately £24m merit payment, as £1.2m for each place times 20 teams. Liverpool were televised 28 times in 2013-14, so they obtained £21m facility fee.

In sum, the Premier League is pursuing a more competitive manner to distribute the broadcasting income. We can tell this trend by the calculation that Liverpool’s broadcasting revenue is 1.57 times more than bottom earners Cardiff, a ratio which is the smallest in all Europe's top leagues. As a result, the gap between each club in the league, which has been funded much more evenly than before, has been much closer, with the Premier League becoming more and more exciting.

The Magic Touch: Contract Controversy in Chinese Soccer

Three sides of this story (Guangzhou Evergrande club, Liu Jian and Qingdao Jonoon club)

During the past several months, a soccer player’s transfer case has been in the spotlight of Chinese soccer circles. This case involves three contracts, which unveil some loopholes of the Chinese soccer league.

The story began on January 3rd, 2014. On the morning of that day, Guangzhou Evergrande soccer club announced on its website that Liu Jian from Qingdao Jonoon soccer club had signed with Guangzhou Evergrande.

However, that night, Qingdao Jonoon stated that Liu Jian’s contract with the club wouldn’t end until 2017, thus, the club did not approve his transfer to Guangzhou Evergrande. As a result, the duration of the contract became an important issue.

All of a sudden, three contracts between Qingdao Jonoon and Liu Jian surfaced, and Liu Jian released details of two of them on his Weibo (the most popular social network similar to Twitter in China).



Guangzhou Evergrande announced the success of Liu Jian’s transfer

The first contract ended on Dec 31st, 2013. The second one expired on Jan 1st, 2014, which meant that Liu Jian would become a free player on that date if no clubs immediately signed him, which made it legal for him to join Guangzhou Evergrande.

Nevertheless, the third contract posted by Qingdao Jonoon shows that Liu Jian will still belong to Qingdao Jonoon until 2017. Therefore, Liu Jian couldn’t be transferred to another other club without permission from Qingdao Jonoon. Another astonishing aspect of the three contracts is that, the annual salaries increase so rapidly, with 800,000 RMB, 2,600,000 RMB and 3,500,000 RMB, respectively.

There is no doubt that one employee just has one official contract with his or her company during a period, so why did Liu Jian sign so many contracts with his club? While this case might seem unbelievable to people who are not familiar with Chinese soccer, this is in fact a common phenomenon in China.

According to a Chinese soccer commentator, there have been 46 similar cases of these multiple contract situations such as Liu Jian’s. Ten years ago, it was found that the salary of the so-called official contract of Shen Si, a former Chinese national soccer team member, was 2,000,000 lower than what his club actually offered. In 2009, several players of Tianjin soccer club collectively terminated training and left the club because of fabricated contracts.

In fact, in order to avoid paying a tax, many soccer clubs around the world sign more than one contract with players. However, Chinese clubs have a different reason for signing two or more contracts with players. The reasoning has to do with several policies that have been enacted by the Chinese soccer association that limits players’ salary and transfer fee. The latest policy even set an upper bound of one million RMB on a player’s annual wage.

All of these policies serve as responses to the strong public outcry that occured approximately a decade ago. Many people argued that soccer players were overpaid, claiming that the overall Chinese soccer players’ level and ability were not worthy of the salaries that they obtained. This group of people pressured the soccer association to limit the salaries of soccer players. As it turned out, the policies that resulted from this debacle went against market rules. The association not only failed to solve the problems, but also triggered a sequence of more complex issues.

Liu Jian’s transfer case is currently processing; we still do not know which one of these contracts is real. Meanwhile, Guangzhou Evergrande has already removed him from its squad list for next season. A panel composed of officials from the Chinese soccer association is still investigating this issue, as people are waiting for a reasonable judgment. If the panel fails to come up with a fair judgment, Liu Jian may not sign with either of these two clubs, and his career may become gloomy.

Although each country has a breadth of unique problems in its sports management system, all sports managers need to bear in mind that all sports policies should be in accordance with disciplines of the market, and perhaps more importantly, should adhere to the principles of the policies to protect players’ benefits.

The Magic Touch: International Expansion and the Bundesliga

In August, after Bayern Munich won the Audi Cup in China, Karl-Heinz Rummenigge, the chairman of the club, announced that the Bayern will set up a Chinese office to handle a wide range of businesses and continue to penetrate the high-potential Chinese market.

 Rummenigge announces new plans

 With the same purpose of increasing overseas expansion as Bayern Munich, the Stuttgart soccer club just declared that from January 7th train and prepare for the second half of the season in Cape Town, South Africa--ten thousand kilometers away from Germany. Many people may find it surprising that the club has chosen to set the training camp in such a distant location, and athletes will definitely be tired and uncomfortable because of long-distance flights, different time zones, climate and diet. However, this plan makes sense.



This move will not only let players enjoy sunshine of South Africa in January but also will allow the club to obtain an amount of money awarded by the German Football League (known as DFL, Deutsche Fußball Liga). In order to encourage the club to do more outreach in other countries, the DFL will pay Stuttgart €250 thousand for its winter trip. But in order to get this reward, the club will also have to take part in many local activities. According to the schedule offered by manager Fredi Bobic, besides training and matches, the club will travel to Robben Island to climb mountains. All of these activities in South Africa will be broadcast by Supersports TV station.

Robben Island, 6.9 km west of the coast of Cape Town 

People should get used to this type of overseas trip from German clubs, and in the future we will find an increasing number of trips happening around the globe. All of these actions are geared towards keeping up with the pace set by other leagues like the Premier League to expand overseas markets. During the 1990s, Barcelona, Manchester United and AC Milan started to train and play matches in Asia and America, but fans could hardly find Bundesliga clubs outside of Europe.

“Bundesliga is backward drops behind other leagues as for developing overseas market,” Christian Seifert, a member of the DFL board said. In order to change this situation, DFL has launched a program for clubs: DFL will provide financial aid and extra bonuses to clubs that set up overseas training camps, and some clubs can obtain up to €300 thousand for doing so.

 According to Dr. Jan Lehmann, the director of Strategic Marketing & Product Management of the DFL, there are two important rules for this new program. The first is that eighteen clubs are ranked by UEFA Coefficient (which is based on the results of clubs competing in the five previous seasons of the UEFA Champions League and UEFA Europa League).

This rank is then regarded as its corresponding overseas influence. Because of the different rank, each team can obtain a different bonus. Those clubs with a point total higher than 50 will gain €150 thousand; those clubs with a point total between 25 and 50 will get €100 thousand; the rest of the clubs with fewer that 25 points but more than one point will get €50 thousand.

The table of UEFA Coefficients of German clubs

The second rule for financial aid is about the place which clubs choose to do outreach. For this regulation, DFL lists eleven major markets: China, Russia, America (Canada), Poland, Indonesia, Japan, Turkey, India, Thailand, Brazil and Sub-Saharan Africa (including South Africa, Ghana, Nigeria and Kenya). If a club whose UEFA Coefficient is higher than 50 sets the training camp in Europe, it will win 150 thousand Euros; if it sets the camp outside Europe, it will gain another 75 thousand.

China is the biggest target for clubs

For example, because of two rules, if Bayern Munich set its training camp in China next summer, it will get more than 300 thousand Euros from DFL. Although this amount of money is not attractive to such a big-spending club, it will motivate many other middle and small clubs, and the trip of Stuggart exactly demonstrates this point. Besides this new program, in order to expand overseas markets, DFL has also tried to develop broadcasting contracts, which will bring the league to a higher level from a global context.

According to new contracts, the revenue from overseas broadcasting of Bundesliga will be increased to 150 million Euros in 2015. Benefiting from all these actions, fans from different countries will have more chances to get involved in Bundesliga. Moreover, because of these mechanisms, more and more small and medium clubs will have greater opportunities to develop themselves, which will gradually break the monopoly of Bayern Munich and Dortmund which dominate the ranking, so a more competitive league will be presented to fans.

Blogger Roundtable: Which League Does Soccer Threaten the Most?

Which North American sports league does soccer threaten the most? We gave our thoughts, so now it's your turn. Answer our poll at the top of the blog and then leave a comment at the bottom of this post explaining why.  

We all know that soccer is experiencing tremendous growth both in North America and abroad.  Powerful foreign soccer leagues clash with North American leagues' expansion overseas, while also carving out a chunk out a slice of the domestic sports market as well.  Soccer stacks up very well among Hispanics and young audiences, both favorable market segments.

MLS has also emerged onto the mainstream, with average attendances higher than that of the NBA or NHL.A mature MLS would almost certainly force a disruption in the traditional "Big Four" model of professional North American sports.

But the competition for viewers may not even be the greatest threat. Injury and cost concerns for youth participation have driven many athletes into soccer. Many parents choose soccer as an alternative to the physicality of football.  Others families may not be able or willing to pay for the significant expenses related to hockey and baseball at a young age.  If soccer can continue to win in the marketplace of youth participation, the consequences could be significant for other sports.

So here's the question for our blogger roundtable:

Which league does soccer threaten the most?

Matthew Hakimian- NFL

The NFL has to feel somewhat threatened by the growth of soccer in America. It seems like everyday more cases come out regarding players suing the league for health-related issues, including concussions. In turn, many American families are becoming reluctant in allowing their children to play such a physical sport. Moreover, it certainly does not help that we're one of the few nations in the world that refer to the NFL when talking about "football". 

Adam Malz- None

I don't think the growth of soccer is anywhere near the point of threatening any one of the four major sports leagues in the United States. It simply does not have the fan support that the MLB, NBA, NHL, and NFL currently do. Also, the fact of the matter is that the U.S. level of competition of soccer is very far from what it is in Europe. Perhaps it will pose a threat in the future, but I don't see it being a major concern for any of the major four leagues for a while.

 John Zakour- None/MLB

I don't think soccer especially threatens any of the major American sports. I suppose if it could reach popularity levels of the big four in America, then we might have a conversation. That day is probably far enough away that the dynamic of the big four will likely be very different. Soccer still struggles to get highlights on ESPN, and the MLS is still a second tier league, at best. 

But, If I had to choose, I'd say soccer threatens MLB the most. The prototypical soccer player is most similar to the prototypical baseball player, as neither sport really has "size requirements" (soccer and baseball players still look like non-giants, unlike the NFL and NBA) and both tend to attract Hispanic and Asian audiences. But I'm grasping at straws here. I doubt Bud Selig is losing sleep over it. 

Stephen Rosen- MLB

The sad answer is MLB. The 2013 World Series was the least watched World Series by Americans under 18 EVER. There is no way around the fact that baseball does not have a young core group of fans to continue its growth into the next 20 years. Baseball suffers from long breaks and extremely slow moving pace. Unlike soccer which ever game is almost always under 2 hours, baseball can have a non-delayed 9 inning game take 4 hours. Lastly baseball has lost one of its coolest aspects in the post season the day time game. The 9:07 start to ever World Series games means most kids will be long asleep by the time the late innings arrive. 

MLS instead went with a 4PM Saturday start to its classic MLS final on Saturday between Sporting Kansas City and Real Salt Lake that everyone could watch. Despite the fact the game went through extra time and a shootout it was still over by 8PM when every kid was awake. Major League Baseball may be America's pastime but soon it will be past its time as a major American sport.

Blogger Roundtable: Brazil 2014 or Rio 2016?

Which sporting event in Brazil would you rather attend: The 2014 FIFA World Cup or The 2016 Summer Olympics? Please give your opinion by answering the poll at the top of the page and share your thoughts in the comments section.

All eyes will be on Brazil in two of the next three summers as the country is set to host what are arguably the two biggest international sporting competitions in the world. Many people dream about getting the chance to go to either event, but if you could only go to one, which one would you select?

Here's what our bloggers had to say:


Adam Malz - Olympics

I would much rather attend the 2016 Summer Olympics in Brazil. The Olympics offer a variety of sports and the same level of pride in your country that the World Cup offers.

Matthew Hakimian - World Cup

Despite the aura the Summer Olympics carries, there is no single sporting event that can match the excitement of the World Cup. It is the pinnacle of the most popular sport outside the U.S. as the world's best soccer players vie to obtain national glory. In addition, from start to finish the World Cup is twice as long as the Summer Olympics (32 to 16 days). As a huge soccer fan though, my answer is likely biased due to the fact that the quality of Olympic soccer doesn't even compare to the level of competitiveness featured in the World Cup.

Thomas Kroner - Olympics

I would rather go to the Summer Olympics in Brazil simply because America is considerably better at nearly every other sport in the world than we are at soccer. If I’m spending the money to travel and stay in another continent then I want to see America succeed. The last thing I want is some little Portuguese person coming up to me talking trash about the result of a game.

Max Fogle - Olympics

After seeing the World Cup draw for the USMNT, I'm tempted to say the Olympics. While I would like to see the German national team and the Ronaldo national team, I wouldn't be able to take another defeat to Ghana. I would rather get better use on all of my star spangled paraphernalia and watch a bunch of Americans win at sports that I usually do not watch. It would be Rio 2016 for me.

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.

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

Guangzhou celebrating their Champions League Title

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

On the night of November 9th , Guangzhou Evergrande of China won the AFC(Asian Football Confederation) Champions League by beating Seoul FC from Korea. This was the first time a Chinese soccer club won the continental tournament. My grandfather, a long-time soccer fan, described the moment as one of the greatest of his entire life.
Guangzhou Evergrande was originally founded in 1954. In 2010, after the Evergrande Real Estate Group purchased the club, this team won the championship of China's second division and was promoted to the Chinese Super League. A year later, the club claimed the league title in its first season in top flight (the same feat German club FC Kaiserslautern performed in 1998). Then during the next two years, the club furthered its success and the Guangzhou Evergrande era began.

Evergrande Real Estate Group deserves much of the credit for these achievements. Their transactions include signing  Dario Conca, MVP of the Brazilian Soccer League and Brazil national team player Elkeson, along with renowned manager Marcello Lippi. All told, Evergrande has spent more than three billion yuan (nearly $500 MM) during the past several years.

Magic with star player Dario Conca

The success of Guangzhou Evergrande is one example of a big-spending teams winning titles around the world. Ever since Russian magnate Roman Abramovich entered Stanford Bridge (home ground of English club Chelsea), operational patterns of professional soccer clubs have been changed. By pumping significant funds into the team and recruiting top-notch players and coaches, clubs can obtain excellent results almost immediately.

Russian Magnate and Chelsea owner Roman Abramovich 

Currently, Chelsea FC, Manchester City and Paris Saint-Germain lead this contingent of clubs built on wealth rather than proper management. The soccer world order was upset by new money and rule changes, leaving many traditional powers fragile. The most significant changes occurred as a result of the Bosman Ruling. The Bosman Ruling banned domestic league limits on the amount  foreign players a club could employ (as long as they were citizens of a European Union member nation). This opened up a rash of transfer spending and opened the door for big-pocket owners to flood the world's soccer scene.

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

Know your Stats: The Key Pass

In my last piece, I started looking at the importance of properly contextualizing player performance in order to isolate what we --  as fans, managers, and coaches --truly care about: ability and value. In this piece, I'd like to show how it is that advanced metrics can help out in that difficult task.

I'm very partial to passes. Passing is my favorite part of the game. Nothing trumps a side that can pass the ball around fluidly, and aesthetically nothing beats a beautifully threaded through-ball to a put a forward in scoring position. Therefore, a metric that I'm very partial to is the "Key Pass". First, let's begin by defining the Key Pass. Per Opta Sports, the company that measures and tracks the metric, the definition of the Key Pass is:

The final pass or pass-cum-shot leading to the recipient of the ball having an attempt at goal without scoring.

So there we go. The definition provides a standard for the people at Opta to objectify events, and it makes the data they provide very reliable, moving away from subjectivity. Opta essentially has large number of people sitting in their viewing center (or working remotely, maybe?) counting Key Passes. Sounds like a fun job. Unless your assignment is to track Crystal Palace games or something. 

The Key Pass metric provides one big advantage over assists,  and that advantage can be found in the final clause of the definition: "without scoring". The Key Pass is a better way to unveil the true measure of what a player is actually doing on the field.  Let's view this through an example of an one of the best playmaykers in the world, Mesut Ozil, who has averaged around 4 Key Passes per 90 minutes over the past few seasons -- an impressive figure.

Say Mesut Ozil filters a beautiful ball from midfield in  between the two center backs. Last season, Cristiano Ronaldo would have been on the receiving end of such a pass, and Cristiano Ronaldo, being the monster that he is, probably would have buried the ball in the back of the net (the guy breaks hands from 30 meters – a goalkeeper a few meters away has no chance). Now, this season, Nicklas Bendtner could be on the receiving end of those passes, and it is just as likely that Bendtner will trip over his own feet as it is that he scores.

Observe Nicklas Bendtner in his natural habitat

So we have two situations where Mesut Ozil makes the exact same pass and gives his forward the same chance of scoring – let’s say an *85% chance. The 15% left to actually score the goal will be decided by 1) the scorer’s ability and 2) random chance (say a beach ball getting in the way). Neither 1 or 2 actually tell us anything about Mesut Ozil. And it is 1 and 2 that determines whether Ozil's pass gets tallied up as a an assist.

*Note: these percentages are mere abstractions to make my point.

Now, expand that situation to a much grander scale, where a creative midfielder plays with only Bedntners and no Ronaldos. I’m inclined to say his assist numbers would not be as high with Bendtners as they would be with Ronaldos. 

Now, this is not to say that the Key Pass Metric is a flawless measure. This article from Statsbomb does a fairly good job at evaluating the Key Pass, pointing to one big flaw: not all key passes are created the same. In the example given above, say instead of Ozil filtrating a perfect ball that leaves the forward on a 1 v 1 with the goalkeeper and with an 85% chance of finishing, he puts a little too much on the ball and instead leaves the forward at an awkward angle with the goalkeeper and only with a 70% chance of scoring. Also, not every final pass is equally as "key" -- there is a big difference between a  ball played from midfield to put a forward through and a short tap in pass in the keeper's box.

Over many different observations (instances), these differences are meaningful, and they are directly a result of a player's ability. However, the Key Pass is a great starting point and a vast improvement over the statistics we have typically had to contend with. Anyway, I strongly recommend the Statsbomb article; it actually attempts to normalize for the differences in the quality of the Key Pass using another metric called Expected Goals (ExpG). It shows the type of improvement that we can continue to make in soccer analytics.

My initial intent with this piece was to actually start engaging in analytics and to track Ozil's career based on the Key Pass. However, the availability of soccer statistics is very limited, and the availability of advanced soccer statistics is even more limited. I have put in a request to Opta to see if they will grant me access to their data, which they do grant to bloggers and writers as long as their projects merit it. Hopefully I get access to it, and the quality of my content on this space can go up a notch.

I'll leave you with some passing gems from Ozil:

And in case you were wondering about the significance of the picture at the beginning of the post, here are some gems from one of the masters of the Key Pass, Carlos Valderrama:

Around the Web:

• Richard Whittall with a short but thought provoking look at football finance and the possibilities of teams...GASP...actually spending their money wisely and not indiscriminately.
• Statsbomb with a similar piece, suggesting improvements over the decision making organization that most teams employ in an effort to improve that word we all love: efficiency.
• Over the weekend: Barcelona, Real Madrid, and Atletico Madrid combined for a 16-0 trouncing over their opponents. Gotta love the parity in La Liga. I'm just gonna keep hitting the snooze button, sadly.
• A World Cup Draw simulator! The most competitive field ever?