Chinese Super League clubs must pay their debts or face expulsion – the latest attempt by the Chinese Football Association to curb spending
Back in March 2017, we discussed how the Chinese Super League (CSL) was fast becoming a financial powerhouse within the footballing world following its record breaking winter transfer window where the total spend by CSL clubs of £331 million eclipsed the total spend by Premier League clubs of £215 million in the same window.
However, concerns over the longevity and financial sustainability of the CSL continue to grow, culminating this week in the announcement by the Chinese Football Association (CFA) that it has written to all but three of the country’s top-flight clubs, as well as five lower-league teams, demanding that they clear their debts or face expulsion from the Asian Football Confederation (AFC) Champions League next season.
Whilst this is a powerful statement, it is not altogether surprising nor out of the blue. The seeds to curb Chinese clubs’ spending had begun to be sown at the start of the year following a damning statement by China’s General Administration of Sport (the CSL’s chief governing body). This statement condemned Chinese clubs for effectively "burning money", describing such spending as a "grave phenomenon" within Chinese football and promising to "strengthen examination and supervision of clubs" financial affairs, progressively control clubs’ expenditures on first-team players and "ensure favourable financial conditions".
Fast forward 7 months, and the demand for CSL clubs (and indeed some clubs from the lower tiers) to settle their debts is a further shot across the bows which the allegedly guilty clubs must take note of. However, high profile clubs such as Guangzhou Evergrande (two-time winners of the Asian Champions League), Shanghai SIPG and Jiangsu Suning have issued public statements through their websites or social media refuting the claims by the CFA that they have outstanding debts. Meanwhile, Shanghai Shenhua (who signed Carlos Tevez for around £40 million in January and reportedly made him the highest paid player in the league) have acted quickly in releasing a statement confirming that they are investigating the alleged wrongdoing and will finalise outstanding payments as soon as possible, which appears to suggest there may be some substance in the CFA’s accusations. However, Shanghai Shenhua’s current stance is that any financial issues they may have relate to a joint compensation mechanism rather unpaid salaries and bonuses for players.
The CFA have given the relevant clubs until 31 August 2017 to prove that they have no outstanding debts or face “exclusion from the AFC Champions League in 2018”. The footballing world will be watching with baited breath to see which of those clubs can settle their debts, and whether or not the CFA will make good its threat of suspension from the AFC Champions League. Either way, it is important that the CFA is seen to attempt to address the CSL's astronomical spending, especially when the domestic broadcasting rights deal (which is a prime source of income for clubs in the top leagues across Europe) for the current CSL season (EUR 250 million) is dwarfed by the equivalent deals in Ligue 1 (EUR 700 million), Serie A (EUR 1 billion), La Liga (EUR 1 billion), Bundesliga (EUR 1.2 billion) and of course the Premier League (EUR 2 billion).
The CSL has undoubtedly put itself on the global footballing map since its inception in 2013 and it will be interesting to see how this rapidly-growing league develops further over the coming seasons.