Team goes on the block

Troubled conglomerate needs to sell its football team

Team goes on the block

Challenging times for the Dalian Shide club

When Rangers beat cross-town rivals Queen’s Park 2-0 at the weekend, the Scottish football club claimed to have broken a world record. Not thanks to the scoreline, but because of the crowd of 49,463 watching the game. The Glasgow team says that’s the biggest ever attendance for a fourth-tier league match.

Finalists in Europe’s 2008 UEFA Cup, Rangers were relegated this year to Scotland’s lowest league after going bankrupt and failing to pay $33 million in taxes. This was a traumatic outcome for the Ibrox faithful. In order to guarantee a return to the top flight – i.e. the Scottish Premiership – Rangers will need to win the third, second and first divisions in the coming three seasons. But this year, that means playing in the footballing hotbeds of places like Montrose, Elgin and Annan.

The rapid downfall of the former Scottish champions offers a cautionary tale for Dalian Shide, a team also in trouble due to the precarious finances of its owners. We’ve reported before on the fortunes of Dalian Shide (see WiC145), whose tycoon boss Xu Ming has been detained since March for alleged corruption. With Xu’s company heavily indebted, and banks calling in loans, the bad feeling has spilled over into the club. Tempers have been fraying – club officials even punched a female journalist in a widely-discussed incident that earned a reprimand from the Chinese Super League.

Xu is still not at liberty, and there are signs that his ties to former Chongqing boss Bo Xilai could see him jailed for corruption. For example, it emerged during the trial of Bo’s erstwhile lieutenant Wang Lijun that Xu had bribed Wang by helping with the purchase of two homes in Beijing. When Bo is tried, the full scale of Xu’s illegal dealings could become clearer.

But 21CN Business Herald says the wait is causing “turmoil” for Dalian Shide, which is now up for sale.

Cash has dried up: Xu’s company has already pledged its best real estate assets to banks but still has outstanding loans of around Rmb10 billion. Ownership of the football club was always about prestige rather than profit, so selling the club looks to be the only option.

The Dalian Shide Group initially looked to sell the team to Red Bull (confusingly not the international brand, but an energy drink made by a Chinese firm) which wanted to relocate the club to Yunnan province. But Dalian’s government intervened, worried that the move would anger the local population and damage the city’s reputation. The team is one of China’s most successful, having won the league eight times and also reaching the final of the Asian Cup Winners’ Cup.

21CN quotes an informed source as saying: “Shide football team is a business card of Dalian, so the Dalian government does not want the team to leave.”

Instead, the local authorities have been trying to orchestrate an alterative sale, or more accurately, a merger.

This would involve another local outfit called Dalian Aerbin. There are, of course, complications. Aerbin doesn’t want to lose it name, and its players worry about their own futures should the merger come off. In fact, they say that their wages are already in arrears because the local government has instructed Aerbin to cover the salaries of the Dalian Shide squad. With merger discussions at a sensitive stage, both clubs are even denying that a conversation is taking place. Shide’s Party secretary Yang Baoshan was deliberately non-committal, saying only: “The truth will surface over time. Now it is no good to say anything.”

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