Manchester football derby in Beijing makes pitch for Chinese investment

LONDON — For the first time in 135 years, Manchester United and Manchester City will be meeting outside England. Way outside, as on July 25, the two football teams will kick off at the National Stadium in Beijing.

The match is part of the International Champions Cup (ICC), a three-year-old series of global exhibition games that has become a high-profile way for clubs to woo fans in more places. Three ICC games will be played in China — in Shanghai, Beijing and Shenzhen — and this year, tournament owner Relevant Sports is selling more than the teams on the field.

New York-based Relevant has been courting Chinese investors to take a substantial stake in the ICC, which is valued at US$300 million to US$500 million (S$405 million to $675 million), according to a person with knowledge of the terms who asked not to be named because the negotiations are private. Several people familiar with the discussions acknowledged that a deal is in the late stages.

The ICC has staged games in China before President Xi Jinping announced a national initiative this spring to make the country a global football powerhouse. Since then, Chinese investors have gone mad for the sport.

Chinese buyers have purchased European club teams and sports media companies. Chinese Super League teams are luring talent with record-breaking salaries. Italian forward Graziano Pelle, for example, will earn €40 million (S$60 million) for joining state-backed Shandong Luneng from the English Premier League’s Southampton.

“You can’t plan for the president of China saying, ‘We want to be the No 1 football nation in the world in 2050’,” said Relevant chairman Charlie Stillitano. “You can’t plan on those things. Part of that is just good fortune in this case.”

Relevant had limited the number of games it promoted in China because doing business can be a challenge for Western companies, Stillitano said. Having a local partner should make that easier and in turn attract more fans to some of the world’s best teams.

RSE Ventures, a firm founded by Miami Dolphins owner Stephen Ross, backs Relevant and has used its Hong Kong subsidiary to support the ICC’s growth in China. “If it weren’t for the fact we have an operation out of Hong Kong I don’t think there’s anyway we could execute the ICC in China,” said RSE chief executive officer Matt Higgins.

Xi’s goal is to make China a global football superpower, which includes hosting — and winning — the World Cup by 2050. The men’s national team is currently No 81 in the world, and in a recent meeting with new FIFA President Gianni Infantino officials from the China’s football federation bemoaned the lack of football fields in the country. Every county should have two standard fields, and every new living residence compounds in cities with adequate resource should have at least one five-a-side court, according to Xi’s national plan.

Building a football superpower is harder than promoting exhibition games featuring top teams from the West. And with Chinese cash flooding the football market, clubs from across Europe are vying to get a piece of the action.

“We field inbound inquiries every week from another team that is interested in figuring out how to bring a team to China,” said Higgins.

ICC matches in Australia, the US and Europe will feature Real Madrid, FC Barcelona, Paris Saint-Germain, Bundesliga champion Bayern Munich and surprise Premier League winner Leicester City, among others. BLOOMBERG