BEIJING • China Inc's record burst of investment in global football could leave investors burnt and out of pocket, says China's richest man, Wang Jianlin.
It is the highest profile warning yet on a US$4 billion (S$5.41 billion) splurge since last year that has stunned European football.
The chairman of Dalian Wanda Group is himself a major sports investor, sponsoring the Chinese league and taking stakes in leading Spanish club Atletico Madrid and Swiss sports marketing firm Infront Sports & Media AG. But for Wang, owning a team is about influence - not profit, which he sees as easier to achieve through rights deals or owning competitions.
A score of smaller Chinese players have since followed Wang into the European football arena, encouraged by official enthusiasm for the game.
Part of the lure is mammoth TV deals as global viewers pay up to watch live sport. The English Premier League - the world's richest - will see £8 billion (S$14.30 billion) coming in over three years. But not everyone will see enough of that money to make a decent return, Wang warned.
"It can give you influence, but it won't make you money. Every year you're burning through cash - that is certain," he said. "It's eye-catching, it attracts interest, but it's hard to make money."
While it is too early to assess how the football splurge will pan out, some brokers working on Chinese sports investments have queried deal valuations.
"At the prices they are buying it makes no sense to me. They are even buying minority stakes, where they have no control... Many of these teams are cash flow negative," said a senior sports adviser, involved in deals between China and Europe.
While Chinese buyers have snapped up clubs such as Italian giants Inter Milan and are said to be circling Liverpool, they have also looked to lesser-known teams. Hull City are being courted, according to industry sources, as well as clubs in the less cash-flush French league.
The dash into football comes with the public backing of President Xi Jinping, who says he is an avid fan and wants China to one day host - and win - the football World Cup.