Yesterday morning most in China were enjoying their day off, resting at home or out on holiday, and it’s unlikely they picked up the paper, especially Soccer News, though those who did were greeted by a large headline stating that Hainan Airlines are trying to purchase Greentown Holdings and all the companies under them, including Hangzhou Greentown.
A few weeks back we talked about how business issues could shape the Chinese Super League in the near future, as holding and real estate companies have struggled this year, at the top of the list was Greentown Holdings. With a large number of properties ready to go on line in the near future and occupancy/sales at record lows, some companies are having a harder go at it these days.
At the same time, Hainan Airlines has long been interested in building up its sports portfolio. They’ve been involved in women’s golf as well as basketball over the years and were behind the much rumored move of the Chengdu Blades to Haikou before the start of the Chinese Super League season. While that move never materialized, this one seems far more likely. Hainan Airlines has built an excellent facility not far from Haikou’s airport that is already used by different Chinese Super League teams for off-season training. The Hainan provincial government has also made commitments to build a 60,000 seat stadium on the island.
Hainan Airlines is the fourth largest airline in China and one of the largest companies in Hainan province. It goes beyond just being an airlines and is involved in the operation of airports, hotels, and some real estate holdings. Their interest in Greentown goes far beyond the football field, but it’s a major factor in their desire to purchase Greentown Holdings.
Currently, they’ve ponied up an offer of RMB30 billion ($4.6 billion) to purchase Greentown outright. Greentown chairman, Song Weiping was hoping for an offer closer to RMB40 billion ($156 million), so there is a significant gap between the two sides right now. At the same time, Song didn’t want to sell off all of Greentown’s subsidiaries (though the football club was one he is willing to sell off), but he’s said that he is a realist and is willing to sell if he gets the right bid.
This is an important developing story and definitely has an eye on it, we’ll be sure to keep you up to date on any developments.
Around the world it seems that owning a football club is a good way to lose money (unless you can get lucrative TV rights and keep a lid on expensive salary expectations of the players.
In one of your related earlier posts you mention: ” The rich real estate companies and their owners choose, or are pushed by the local government, to put some of their money back into the local community, and a popular choice is always the local football club.”
Yet I find it very hard to understand why a company would want to spend RMB 30 mill to buy a club and then knowingly shovel truckloads of RMB into it for the foreseeable future. Surely the Hainan Airlines Board aren’t THAT much of football fans are they?
There are a couple things here:
1. Hainan Airlines isn’t buying Greentown solely for the football team, but they’ve been interested in owning a football team for awhile and that is definitely one of the reasons they are interested in Greentown over another holding/real estate company.
2. If the government’s going to make you pay for something, either backing a sporting project or an arts event/museum, or something else, at least with the football team its more public and more branding, whereas the other choices you might not get the same publicity.
3. In China, team ownership is typically either forced on a company by the local government, a way for a company’s owner to pad his ego (look at Guangzhou), or an afterthought/albatross that company’s are looking to dump.
Salmeron es una buena opcion