Chapter 649 - 575: Entanglement of Interests

Chapter 649: Chapter 575: Entanglement of Interests

Chen Yu was clear on the issue of club ownership.

Take basketball, for example.

Of the 14 existing teams in the Jia A league, Chen Yu knew that only three—Hongyuan, Guanghui, and Gai Tianli—were truly private clubs.

The remaining 11 teams all had complex and unclear ownership structures.

Take Shougang, for instance. It was affiliated with the state-owned Shougang Group, yet it also answered to the Capital Sports Bureau.

The Eastern Team’s equity situation with Modu Television had always been ambiguous, and mixed into that were ownership claims from the Modu Sports and Technology College and the Modu Sports Bureau.

Nangang had a similar problem; its equity split with the Provincial Sports Academy had never been clearly defined.

And then there was the Basketball Management Center, which demanded a cut and controlled all naming and broadcasting rights.

Especially the broadcasting rights.

The situation was the same for both basketball and soccer: the broadcasting rights belonged to CCTV.

As China’s largest television media outlet, giving the broadcasting rights to CCTV shouldn’t have been a problem.

But once you actually looked into it, you realized the problems were huge.

First off, the broadcasting rights for Jia A soccer and basketball were initially co-managed by three companies: Fortune Treasure, IMG, and China Radio Network.

With the exception of IMG, both Fortune Treasure and China Radio Network belonged to the Sports Bureau.

Then last year, the Sports Bureau established another company called Huao Olympic Sky and decided to have it manage the broadcasting rights operations for all leagues.

What made things even more troublesome was CCTV.

CCTV had always held exclusive broadcasting rights for the leagues, but they were unwilling to pay for them. They had their own excuse, claiming their station’s budget had no line item for broadcasting fees.

CCTV was reluctant to pay, and while local stations were willing, they had no way to obtain the broadcasting rights.

It was only after the establishment of Huao Olympic Sky that the Eastern Channel managed to get the broadcasting rights last season.

This situation alone involved the interests of several different parties.

Of course, the fact that the Sports Bureau was able to establish Huao Olympic Sky showed that they also hoped to sell the broadcasting rights for a high price.

Take Jia A soccer, for example. In ’98, the Football Association only received 600,000 in broadcasting fees.

From the ’99 to ’01 seasons, they only made a total of 11 million over three years.

For what was supposed to be the most important source of income for a professional league, this little money was simply unjustifiable.

Then there was another problem: after the Football Association and the Basketball Management Center received the money, they didn’t distribute it to the clubs in a timely manner.

The clubs were obviously not happy about that.

This was because the Football Association also took all the naming and advertising rights.

How much money could you make from just selling a few tickets?

On top of that, many clubs didn’t have their own home stadiums, so they had to split the ticket revenue with the stadium owners.

Private clubs like Hongyuan were only able to survive thanks to their owners’ tireless personal investments.

Without money, the level of training couldn’t improve, the games weren’t exciting to watch, and income naturally dwindled.

Furthermore, most clubs belonged to the Sports Bureau or state-owned enterprises. When they lost money, it wasn’t *their* money. It was all a muddled account, impossible to sort out clearly.

Finally, there was one more core issue: the Sports Bureau also demanded results.

And for them, "results" meant the performance of the National Team and ensuring the city had a club. Whether it lost money or not, they didn’t care.

This involved a large number of companies and a large number of responsible parties behind the scenes.

There was also the issue of staffing for management personnel.

For example, if the Sports Bureau sent someone with an official position to manage a club, and then the club suddenly commercialized, he would be out of a job. Where would he go? Once you’re gone, you’re forgotten. Would there still be a place for him back at the Sports Bureau?

Even if the club was willing to keep him after commercialization, he might not be willing to stay, for the sake of his secure government position.

Over time, this created an extremely complex web of entangled interests.

If Yuan Weimin wanted to make changes, he would inevitably be stepping on some very powerful toes.

When he first spoke with Yuan Weimin, Chen Yu had discussed this problem, suggesting that the Sports Bureau be responsible for sorting out the specific ownership divisions.

’You sort it out first, then I’ll come in and acquire.’

But the situation was too complicated, involving too many interested parties.

The various local sports bureaus, the sports academies...

The sports academies were even jointly managed by the Sports Bureau and the Education Bureau.

Add to that other stakeholders like state-owned enterprises and Eastern Television. Could this really be solved by Yuan Weimin just saying, "Hand over your equity, I’ll give you a few tens of millions, and the club will have nothing to do with you anymore"?

Very, very difficult.

And that was the case this time.

From the news Su Jun had gathered, the Sports Bureau was dead set on making changes, but a large number of people in various regions and clubs were dissatisfied.

Because the Sports Bureau had yet to produce a sound plan for distributing the benefits.

In other words, the Sports Bureau was just shouting slogans. They hadn’t made thorough preparations on how to actually implement the changes and balance everyone’s interests.

"Doctor Chen, are you able to understand all this?" Su Jun asked.

He was genuinely worried that Chen Yu, who had grown up in the United States, wouldn’t grasp these complex relationships.

Chen Yu snapped out of his thoughts and smiled.

"What’s not to understand? It’s actually the same all over the world."

’Does the United States not have this kind of bullshit? Impossible. People are people; it’s the same everywhere.’

"Su Jun," Chen Yu said, sitting up a little straighter with a smile. "Listening to you talk, I’m starting to think I don’t want to enter the Chinese market anymore."

Such a complex web of interests... just hearing about the effort to completely balance it all was enough to make one’s head spin.

Su Jun jumped, startled, and said hurriedly, "Doctor Chen, you mustn’t think that way!"

His face turned pale with anxiety.

If his words caused Chen Yu to abandon his original plan, making Chinese soccer and basketball miss such a crucial opportunity for change, he would never be able to forgive himself.

"Alright," Chen Yu said, cutting Su Jun off.

’No more joking. The guy is seriously spooked.’

"You give yourself too much credit. Since I’ve already decided to do this, I obviously gave it serious consideration beforehand. How could I suddenly give up just because of something you said?"

This wasn’t some minor issue. It was a decision made by Chen Yu and the various parties behind him after many serious discussions and evaluations.

What they were interested in was China’s vast market.

A population of over a billion, with a rapidly developing economy—it was practically a blue ocean.

The NBA and European soccer have already proven how profitable the sports industry can be. So why couldn’t that be replicated in China?

Combined with his own resources and the timing of the opportunity, it was a rare chance. It wasn’t something he could just give up on a whim.

’If I really gave up, what would happen to all the preliminary investments, not to mention everything else?’

Seeing Su Jun’s dazed look, Chen Yu continued, "Actually, we’ve already considered everything you’ve mentioned. We have backup plans, so you don’t need to worry. The overall direction won’t be wrong."

Chen Yu had spoken with many people and had personally investigated the situation. How could he not know how complex and troublesome it all was?

That’s why, from the very beginning, Chen Yu had prepared backup plans.

Plan A, naturally, was for Yuan Weimin to handle all the stakeholders while he provided the money to take over the existing assets and enter the market smoothly.

The interests entangled in these clubs were complex, but if leveraged properly, they were also a type of resource.

After all, you have to operate the team locally.

There were also the resources of the sports academies and the youth training programs of some clubs, which would be very helpful if they could be acquired.

Plan B, on the other hand, was for the scenario where Yuan Weimin couldn’t balance all the competing interests. In that case, Chen Yu and his partners would have only one choice: abandon the existing teams, fund a new one, and start from scratch.

As long as Yuan Weimin relaxed the rules, there would be no problem.

Not to mention, Chen Yu had already communicated with higher-ups above Yuan Weimin and reached a consensus.

So, just as Su Jun had said earlier, the timing was right, the conditions were favorable, and the people were aligned. It was truly a once-in-a-lifetime opportunity. If they missed it, they might never get another one.