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China property tycoon Wang Jianlin eyes sporting trophy

PHOTO: money.cnn.com

PHOTO: money.cnn.com

China’s richest man, Wang Jianlin, has built a $100 billion business empire founded on shopping malls, but now he has set his eyes on a new trophy — building a global sports conglomerate to match his country’s economic and political might.

News on Friday that Wang’s company Wanda group had become a top-level sponsor for football’s scandal-tainted governing body FIFA was just the latest show of its founder’s ambitions.

With Chinese growth slowing and its once buoyant property sector now troubled, observers see Wang’s business acumen behind the shift into sports and entertainment. And the move also plays into Chinese government policies for companies to buy up overseas assets, as well as to promote the country’s “soft power” abroad.

“There are a lot of people following football, so there is a big propaganda effect,” Deng Haozhi, a property analyst at Chinese developer Fineland, said of the FIFA sponsorship.

“There is also a political imperative for this,” he told AFP. “Many big property developers are participating in the football industry, which is the new preference and goal for China.”

Chinese President Xi Jinping, himself a fan, is pushing to turn the nation into a football power despite its dismal national team, ranked 96th in the world by FIFA.

The leader has declared his hopes that China will one day host and win a World Cup, prompting a flood of money into its professional teams. Chinese Super League clubs spent a world-beating 331 million euros ($373 million) on player transfers for the new season.

“It’s a way to get China more influence in FIFA and get China to host the World Cup eventually, but that’s going to be a long way off,” said Cameron Wilson, founder of the website Wild East Football, about the Chinese game.

– Culture a growth industry –

Wanda shopping malls are a familiar feature of China’s urban landscape but founder Wang, whose personal fortune is now near $30 billion, was unknown to the outside world until paying $2.6 billion for US cinema chain AMC Entertainment in 2012.

In China’s biggest-ever cultural takeover, Wanda in January signed a $3.5 billion deal to buy Hollywood studio Legendary Entertainment, maker of blockbusters such as “Jurassic World” and “Godzilla”.

Wang’s Wanda Sports Holdings already claims to be the world’s largest sports company and has a goal of reaching an annual turnover of $10 billion.

It already owns Swiss marketing group Infront, a 20 percent stake in Spanish football club Atletico Madrid, and the organiser of the Ironman extreme endurance contests.

Both Infront and Wanda Sports are headed by Philippe Blatter, nephew of the former FIFA chief Sepp Blatter who was forced out over a corruption scandal.

The Wanda group considers the “cultural industry” — including sports, film, entertainment and tourism — to be a key driver for the future. “This sector is gradually emerging as one of Wanda’s core businesses,” according to its website.

In his own words, Wang sees football as a priority, even though Wanda is not directly involved in a Chinese football club of its own, after selling the team in its origin city of Dalian years ago.

“The government leaders care about it very much, and the Chinese administration of sports made several appeals, so I came back and am offering support for Chinese football,” he wrote in a recent book.

– Mixing business and politics –

Under the FIFA deal, Wanda will have sponsorship rights to all FIFA competitions and corporate activities up to and including the 2030 World Cup. Financial terms were not disclosed.

“This is what I call vision,” said a poster on China’s Twitter-like Weibo. “He knows China wants to develop football and his own business can’t do without the central government.”

Like other big private companies in China, ties to the authorities can be good for business. Wang has confirmed that President Xi’s brother-in-law has owned shares in one of the group’s companies.

Wang, the son of a communist Red Army captain, was himself a soldier before he founded Wanda in the late 1980s, building it up with military discipline.

Previously a local government official in Dalian, Wang transformed a failing state-owned property developer after winning a contract to renovate shanty housing, and then grew it into Wanda.

He is seeking to make Wanda a “world class” multinational corporation with assets of $200 billion, revenue of $100 billion and net profits of $10 billion by 2020, according to the company.

Another online poster said: “If he can bring a World Cup to China, Wang Jianlin will be a hero.”

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This post was syndicated from The Guardian Nigeria. Click here to read the full text on the original website.

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