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China | Jun 13, 2017
Rowan Simons explains why China's short term planning risks precluding long term gains.

Chinese football expert Rowan Simons believes we may come to look back on President Xi Jinping’s football reform plans and their sensible long-term objectives as triggering the largest short term waste of money in terms of national sports investment in the history of modern sport.

The Chinese government has been unambiguous with its intentions to transform China into an elite football nation. Separate targets to build a sports economy worth $850 billion by 2025 were supplemented in 2015 by the publication of a three-step plan to transform Chinese domestic and international football. The 50-point ‘football reform’ plan, driven by current President Xi Jinping, includes upwards and downwards investment and an emphasis on infrastructure that boggles the mind. By 2020, China intends to have 70,000 football pitches across the country and 20,000 training centres. By 2030, the target is to have one pitch per 10,000 people. By 2050, the plan has China as a global football super power, capable of winning the Fifa World Cup.

The plans are ambitious and admirable, but how achievable are they? Rowan Simons, a media entrepreneur and grassroots football investor, has lived and worked in China since the 1980s. Since 2012, he has also served as President, Greater China for Guinness World Records, the world’s leading authority on record breaking. ClubFootball, the football brand he launched in China in the early 2000s, runs the largest grassroots network in Beijing. A long-time participant in football projects in China and author of critically-acclaimed 2008 book Bamboo Goalposts, Simons spoke to the Leaders Performance Institute to explain where the country’s football ambitions have sprung from, and where he thinks they’ll go.


Something missing

“In the early 1990s my media company worked with Beijing TV as the first foreign advisors there and sport was one of the target areas; we helped lead the growth of English football in particular – Premier League, FA Cup through the regional network of TV stations. We also did Wimbledon tennis, motorsports, and European sports shows for TV through that period so working with a lot of brands that are sports investors across many of the FMCG brand categories – the likes of Gillette, Carlsberg, Motorola. Clients like Reebok would come to us and do television sponsorships of the major leagues – like the Premier League; they might have got involved in club tours to China too. But when they looked to activate those associations at the consumer level, there’s really nothing here in China in terms of mass participation grassroots sport. As a lifelong amateur player myself, that’s the opportunity I saw in the late 1990s.

“In the early 2000s I set up with a group of British investors a company called Amateur Football Holdings, as a special purpose vehicle to invest into China’s grassroots football industry. We were among the first to make a direct foreign investment and our ClubFootball venture in Beijing opened in 2001; we concentrate only on the grassroots game – or social football, as it’s known now in China. ClubFootball operates the largest grassroots network in the capital city and is a leading national provider of training services to the schools sector. We have 30-plus coaching locations across Beijing, about 3,000 kids in our proprietary programmes here and 200 teams representing 20-plus junior clubs playing in our junior and adult leagues. With our long term partner Nike and other sponsors, we will introduce elite youth programmes later this year. This will complete our network model that offers players of all ages from three and a half years old to 65-plus the same premium experiences as available in the UK. Our next stage is to replicate our city network model around other Chinese cities.

Cast aside assumptions

“Sport organisations coming to this market first need to forget everything they take for granted in their home market. I think we often take it for granted in Europe that things like grassroots football networks exist. In England I think there are over 30,000 amateur clubs. In China almost none of that infrastructure or culture exists at all. Ask a leading European club how they operate locally and they will all talk about tapping into well-established relations with people in local government, amateur clubs, leagues, schools, media, businesses, charities, the police and other civil groups that make up the sector’s multiple local stakeholders. In almost all cases, the top clubs themselves grew out of the very same grassroots environment 100-plus years ago.

Take away all those external resources and goodwill and all the local culture that continuously reinforces them over generations and suddenly the top European club looks very isolated sitting atop a missing pyramid, and very profligate for spending so much cash in the face of abject football poverty all around. In this context, the proposed tax on luxury foreign imported players may perhaps have more resonance. Investing at the top of a pyramid can work from a fashion sense, but it doesn’t really translate into building the same local culture and passion-based consumption as in other football nations. 16 years after starting to invest in that area, ClubFootball is among the most successful groups, but we’ve barely started the process of building a market where a football culture is ingrained in the general population, where large numbers of people contribute regularly to their local clubs, by volunteering for example.

 

 

A cold, hard look

“It’s important to assess the situation rationally. There have been football clubs looking for training and development contracts for example – who should maybe have delved deeper into how junior training works in China to see that it’s not nearly as easy as you’d think. We’re only three or four years into the reform plans in football and yet we’re on round three of foreign football organisations that have tied up with ambitious but inexperienced local partners whose projects have not worked and have now withdrawn or thinking of withdrawing. The learning curve is viciously steep and slippery on both sides. More broadly, look at sports marketing: have the IMGs, the Infronts, the Octagons succeeded here? There has been success in licensing and selling international properties into the market; bringing international brand events into the market, yes. But in terms of development of sustainable domestic properties across the hundreds of sports pursuits that have significant consumer bases in more developed countries, I’m not sure. A cold, hard look at the market is required by everyone.

A tonic

“President Xi Jinping’s football reform plan is the most refreshing document to come from the Chinese government relating to sports since New China was founded in 1949. It’s a revolutionary imperial edict that spends its first section talking about the separation of government from sport, and the reconstitution of sports associations as stakeholder member-owned organisations. That’s a huge ambition that demands fundamental changes to the way Chinese society is organised. And it goes on to talk about the first 15 to 20-year projects focusing on grassroots and building youth and social football fabric and culture – it’s wonderful, it’s massively populist and everyone in the world wants to support this plan. Like Deng Xiaoping’s football reforms in the 1980s, implementing the grand vision is a different matter.

Refreshing but disjointed

“President Xi’s medium term plan talks about building a strong league with a few strong, professional clubs that can compete at the highest level in Asia. Pro club success has already been done because it can be bought with money. The easiest and quickest things are being done first. Buying professional clubs, player agencies, media rights can be done with money. So that’s what’s being done – and lots of it! Pitches can be built with money. It is much, much harder to build football teams with decent coaches playing in meaningful leagues to play on those pitches. China is said to have a great shortage of pitches, but utilisation rates are very low. There is a vast reservoir of existing pitch resources locked inside schools that will not open them, despite the Presidential decree. That takes guts but also points to the real pain of effecting change. And so we are seeing large investment into pitch facility construction. Recently I went to visit a new football centre near the iconic Bird’s Nest. The perfect location, except there are now three of them, all within 50m of each other, and all competing using different models. There will never be enough dedicated league teams and players to use these facilities year-round. The economics of it have not been thought through, and the coordination of pitch building with local schools, with amateur clubs and all the other stakeholders ‘normally’ involved in local football are not in place. They do not yet exist. In many places, they have yet to be conceived by city planners. We’re seeing wasted investment.

“Many foreign clubs have been blinded by the gold rush and their 100-year brands may suffer later”

Back to school

“It’s been popular in China to have football schools. The Evergrande school is a good example of that. It’s the world’s largest. I head up Guinness World Records for this region and I was invited there to present the certificate for the largest residential football school. It’s officially amazing! As the principal told me himself, it’s a Hogwarts for football. The historical problem for China with football schools has always been education. They really were Soviet-style football factories. This school has solved that problem. I’ve seen it with my own eyes: the science labs, the language labs. The kids that go there will get a great education. 2,500 kids I think they had on scholarships and private school fees. That is not what China needs right now. It needs money to be invested into wide popularisation of football. That hasn’t happened yet. Does this type of investment help? Yes, by a process of osmosis, it is better than nothing. Does it have a trickle-down effect? Yes, there’s an elite private school where there wasn’t before and lucky talent will be selected to benefit from that. But is it an effective and cost effective way to develop Chinese football in line with the long term plan? No it’s not. We have now a totally uncoordinated mishmash of old thinking and new thinking. Many foreign clubs have been blinded by the gold rush and their 100-year brands may suffer later. I’d go so far as to say that when Xi Jinping reaches the end of his time as leader, which is only meant to be five years away, we will be looking back at his fantastic plan and its sensible long term objectives as triggering the largest short term waste of money in terms of national sports investment in the history of modern sport.

 

 

“Is it an effective and cost effective way to develop Chinese football in line with the long term plan? No it’s not”

How far forward will Chinese football have come? I’d think it would and should certainly have a decent professional league with more reasonable player salaries and would grow from there. Pro clubs would grow in both directions – both professionally upwards, and also downwards back towards the communities that built them in other countries. Some new pro clubs will emerge as China finally develops lower league pyramids that link the various levels. At grassroots, a new generation of Chinese parents and kids are ready now to participate in football as we know it and that is what will drive our own business. In many ways, the US offers a better example of what could happen here than Europe. It is easy for us to forget, but the success of football in China will come down to the same magic ingredient as everywhere else: its power to inspire millions to love it enough to make it part of their own lives.

Rowan Simons is on the Advisory Board for the Leaders Sport Business Summit in Beijing on 21 July 2017. 

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