China Inc's $3 billion land grab among Europe's soccer royalty
By Pamela Barbaglia and Adam Jourdan | LONDON/SHANGHAI
It was over lunch at his villa outside Milan with soccer "super-agent" Jorge Mendes that Italian tycoon Silvio Berlusconi realised an unpleasant truth: his storied club, AC Milan, needed cash, and plenty of it.
Mendes, a source familiar with the matter said, was discussing the potential sale of Colombian star James Rodriguez from Real Madrid for 85 million euros ($95 million)- cash that loss-making, debt-burdened AC Milan simply did not have.
Weeks later, Berlusconi became the latest European club owner to sell out to Chinese buyers, in a shopping spree that has caught up clubs from England's Aston Villa to France's OGC Nice and adds up to around $3 billion since December alone.
AC Milan, if the preliminary agreement announced last week is confirmed, will mark one of the largest club deals to date in European football - valuing the "rossoneri" - or "red and blacks" - at 740 million euros ($825 million), including 220 million of debt.
Yet the buyers - Li Yonghong, Li Han and Haixia Capital, and a handful of other entities not named by former Italian Prime Minister Berlusconi's firm - are unknown and untested in European football.
There was no public signing or press conference to herald the deal - only a handful of photographs released after a private handshake at Berlusconi's Sardinia villa.
Other Chinese buyers of rival clubs over the past months, their cash promising to shake up the game, are similarly little known in the sport, including a packaging firm, an eco-city builder and a maker of food additives.
"If I'm honest, I haven't got a clue who Li Han and Li Yonghong are," said Lou Yicheng, a veteran sports commentator in China who has been in the business for more than 20 years. "There are certainly lots of questions that still need answering."
Sino-Europe Sports Investment Management Changxing, the vehicle used for the AC Milan deal, says it has support from local government in China - which president and soccer enthusiast Xi Jinping wants to turn into a football superpower by 2050.
A spokesman for the local Changxing government said it had no financial connection with Sino-Europe Sports and was not directly involved in the deal. He declined to comment further.
No European football association has yet raised major concerns about the influx of Chinese money, though most, like England's Football Association, do have some provision to consider if new owners are "fit and proper".
Carlo Tavecchio, Chairman of the Italian Football Federation, said this week there were some "strange situations" arising from the flush of cash from China.
"If China intends to host the World Cup in 2030 then it means it will invest in Europe," he told reporters. "Unlike the past, this sector now attracts and includes a series of people who are not part of the football sector."
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