TOKYO -- There are various theories as to the origins of soccer. Ancient Greeks and Romans are known to have played a form of ball game using their feet. One legend holds that the game was first played in England using the head of a vanquished Danish prince. And according to FIFA, the sport's governing body, the very earliest form of the game came from "a military manual dating back to the second and third centuries BC in China."
It is perhaps inevitable then, that China has begun to hone in on the beautiful game once more; Chinese billionaires have been spending heavily buying up soccer clubs in Europe. It is now common for Chinese companies to sponsor teams, and Chinese characters to adorn the jerseys of some of the continent's biggest clubs.
"I am excited and privileged to have the chance to become the new owner of this great club," Lai Guochuan, a controlling shareholder in the Chinese investment group Yunyi Guokai (Shanghai) Sports Development said, after buying English club West Bromwich Albion. "This historic deal will result in a rapid and significant increase in interest in the club in China, which should lead to attractive commercial opportunities," he added.
The reported 150-200 million pound ($182-243 million) deal in August was the latest in a string of takeover deals involving Chinese businessmen and English clubs. Other recent deals include Recon Group, a privately owned company controlled by Tony Xia Jiantong, buying Aston Villa in May for an undisclosed fee. Another team in the U.K.'s West Midlands, Wolverhampton Wanderers, was bought by Fosun Group for 45 million pounds in July, while takeover talks have concluded between Birmingham City's Hong Kong-based owners and Chinese company Trillion Trophy Asia.
Manchester City, who came in fourth in last season's Premier League, has also benefited from Chinese money; in December last year, the China Media Capital consortium invested 265 million pounds in the club's owning company, City Football Group, giving it a 13% stake.
England has become something of a hunting ground for Chinese billionaires. The Premier League is the most lucrative domestic league in the world, raking in revenues of 4.4 billion euros ($4.78 billion)in the 2014/15 season, nearly twice as much as the second highest, Germany's Bundesliga, according to Deloitte. Chinese investment in the U.K.'s regional cities has been boosted by the lobbying efforts of the British government. Clubs in many of the cities that will be connected to the capital by the proposed HS2 rail line, such as Leeds and Sheffield, are subject to rumors of Chinese investment.
The fans do not seem too concerned at the prospect. "Everywhere you look now there's a business owned by someone from somewhere else," said 21-year-old Aston Villa fan Michael from Birmingham. Ben, a 25-year-old bartender also from Birmingham, echoed the view. "It's the way things are moving anyway," he said.
It may well be the way things are moving in Spain, too. Many fans consider Spain's Primera Division, or La Liga, the highest quality domestic competition in the world, making it all the more attractive as an investment.
Perhaps the most notable investment is in Atletico Madrid, 10-time champions of Spain. In January 2015, Wang Jianlin, chairman of Dalian Wanda Group and China's richest man, acquired a 20% stake in the club with a deal worth 45 million euros through a rights issue. "Wanda's investment in Atletico de Madrid is another step in our efforts to build a comprehensive entertainment portfolio for our domestic and international clients," Wang said of the deal.
His ambitions in soccer go beyond investing in clubs. In March, Wanda Group signed a sponsorship deal with FIFA covering the next four World Cups, and can now rub shoulders with the likes of Adidas, Coca-Cola, Gazprom, Hyundai and Visa.
Two other clubs in Spain's top flight, Espanyol and Granada, are also under Chinese ownership. Rastar Group took a 56% stake in Espanyol in November 2015 in a deal valued between 14.3 and 17.8 million euros, while Jiang Lizhang, the owner of Link International Sports, became the majority shareholder of Granada after a 37 million euro takeover.
Italy is the latest country to attract investment, with Suning Commerce Group acquiring a 70% stake in Inter Milan, one of the country's most decorated clubs, in a deal worth 270 million euros. Former Italian Prime Minister Silvio Berlusconi has also signed a preliminary contract to sell his 99.9% stake in AC Milan to a group of Chinese investors operating through a management company led by the state-owned Development & Investment Corp. The deal is worth 740 million euros, with the binding contract expected to be completed by the end of 2016.
"The real economy [in China] has not gained momentum, so there might be not so much opportunity investing domestically. That's why [Chinese companies] must look abroad seeking for yield," explained Betty Wang, economist at Standard Chartered Bank. China's foreign direct investment surpassed inward direct investment into the country for the first time in 2015, with investments in soccer clubs contributing to the trend. Wang noted that these companies and billionaires see investments in soccer as a safe bet because of the central government's "policy intentions."
The government in October 2014 issued a statement saying it intends to make Chinese sports a 5 trillion yuan ($739 billion) industry, almost four times the size it was in 2014. It has since singled out soccer as the sport to pursue, with the country's economic planning ministry, the National Development and Reform Commission, outlining in April this year plans to make China a soccer powerhouse by 2050. Among its goals are to have 30 million primary and secondary students playing the game by 2020, have a soccer pitch for every 10,000 people by 2030, and contribute to the global soccer culture by 2050.
Crucially, President Xi Jinping is an avid fan.
"Being an owner or having a stake in a club is like having a passport to a salon for business executives," said Shin Satozaki, vice president of the sports business group at Deloitte Tohmatsu Financial Advisory. Soccer clubs, especially in the English Premier League, have sponsor companies from all around the world; having a slice of the pie allows the Chinese companies and billionaires to talk to them directly, without hindrance. "The business potential is huge. To have a stake would help to omit the normal rigorous business procedures," he said.
"Whereas ordinary investors would balk at the huge sums involved due to a considered business risk," he continued, "Chinese investors all know it is relatively easy because their activities are supported by China's national policy. That is why they are making, and can make, these seed investments."
Many investors are also looking at domestic opportunities.
Chinese clubs spent a record amount on signing top players from European leagues this year. A total of $296 million was spent in the January transfer window in 2016, an increase of 244% from the previous year, in the hope of winning over more fans, and their wallets. In contrast, Premier League clubs spent $181 million.
Financial statements from Guangzhou Evergrande Taobao, the only listed Chinese soccer club, reveal the distorted nature of the deals and soccer business management in China.
The club reported sales of 380 million yuan in 2015, but the cost of sales, due to expensive player acquisitions, stood at 1.26 billion yuan. An operating loss of 916 million yuan and a net loss of 953 million yuan would put most companies out of business. But this is China, with its policy-induced soccer bubble; it rode through the troubles with capital increases, with its net assets doubling from 524 million yuan from the end of 2015 to 1.08 billion yuan at the end of June 2016.
The club only had two shareholders in 2015, Evergrande Real Estate Group and Alibaba Group Holding, but in June, they had been joined by another eight. "I guess the situation is more or less similar with other clubs in China as well," Deloitte's Satozaki said. "This situation looks like a bubble."
Like their counterparts in England, China's soccer fans do not seem too concerned about what happens behind the scenes. "Foreign players coming to China is raising the level of the domestic league, and is having a positive influence on the Chinese professional players as well," said Hu Haiwen, a fan from Beijing. Liu Xuhang, also from Beijing agrees. "The Chinese players have improved by training with the foreign players," he said. "More investment means more famous players and coaches come to China. That will raise the level of the Chinese league."
And it is not just the Chinese that are contributing to the soccer bubble. Investors from other parts of Asia have also been busy buying up European soccer clubs. Notable deals include the group chairman of Thailand's King Power, Vichai Srivaddhanaprabha, buying last year's Premier League champions Leicester City in 2010 and Malaysia's AirAsia owner Tony Fernandes acquiring a majority stake in London club Queens Park Rangers for 35 million pounds in 2011. Singaporean business magnate Peter Lim purchased Spain's Valencia in 2014 for 100 million euros, and Malaysia's Datuk Noordin Ahmad bought a 50% stake in Italian club Bari for 12 million euros in 2016.
Some takeovers have been less welcomed; when Malaysian businessman Vincent Tan bought Cardiff City, affectionately known as "the Bluebirds," in 2010, he changed the team's traditional colors to red in a bid to make the club more marketable in Asia. Protests from angry fans, as well as relegation from the Premier League, led him to eventually go back on his decision. "Chinese companies and billionaires can learn a lesson or two from this," Deloitte's Satozaki suggested, "because disrespect for the [club's] culture is bound to result in failure."
After all, as the legendary manager of Liverpool Bill Shankly once said, "Some people think football is a matter of life and death. I assure you, it's much more serious than that."
Nikkei staff writers Mariko Tai in Beijing and Sam Nussey in London contributed to this article.