Dr Dan Parnell




A feast for wolves China’s richest man is hunting the global sports and entertainment industry

By Simon Chadwick, Paul Widdop and Dan Parnell – originally published here.

From football to movies to Indian cricket, Wang Jianlin’s Wanda Corporation is leading a pack of business interests with the aim of building an entertainment empire stretching from China to Hollywood, Simon Chadwick, Paul Widdop and Dan Parnell write.

Wang Jianlin is China’s richest man, his fortune derived from his ownership of the Wanda Corporation. Wang set up the company in 1988, originally to deal in real estate. Through a process of conglomeration, the business is now also active across the hospitality, retailing, tourism, entertainment and sport industries.

This has enabled Wang to accumulate a personal fortune worth more than US$30 billion, and to build a company currently generating upwards of US$40 billion each year. This is a long way from his origins; Wang started out as a member of the People’s Liberation Army, later becoming an administrator in a local government office in the city of Dalian.


Crucially, Dalian had its own football club, which was initially called Dalian Shipyards and later became Dalian FC (when it was taken over by the local government). In 1993, Wang acquired the club, renaming it Dalian Wanda. By the late 1990s, the football club had been sold again, although by this time Wang had already set about creating what has arguably now become the most influential business in world football.

Most people from outside China probably first became aware of Wang in early 2015, when Wanda purchased a 20 per cent stake in Atletico Madrid. At the time, the Chinese businessman talked of his intention to build a global entertainment business that would stretch from China to Hollywood. As the network visualisation below shows, Wang is following through on his intentions.


We have followed the same procedure here as we did when creating our previous visualisation for Fosun. The outcome of this exercise reveals a network that at one level is very simple: Wanda is heavily invested into activities that can be broadly categorised as ‘cultural industries’. At another level, the network is so complex and diverse that it shows how influential Wang and Wanda have become.

Just like our Fosun analysis, the Wanda network visualisation further demonstrates the importance of guanxi – broadly defined as networks, relationships and connections – in Chinese business. In this network, the right of the diagram depicts an array of predominantly Chinese relationships that underpin Wang’s vision of a global entertainment axis. Whether it is Disney in particular or Hollywood in general, Wanda is already challenging global entertainment’s existing order. Indeed, the ebullient Chinese businessman hasrecently said of Disney that “one tiger is no match for [my] pack of wolves.”

Equally important in Wanda’s network, however, is the role played by both Atlético Madrid and Infront Sports and Media (ISM). Purchasing Atlético cost the Chinese conglomerate US$52 million, and the company has also recently agreed to take-up a naming rights deal on the Madrid club’s new stadium. In recent years, Atlético have been through something of a renaissance, twice reaching the UEFA Champions League Final. Yet the broader network in which Atlético is embedded is possibly more important to Wang’s long-term strategy of building his entertainment empire via sport.

Atlético Madrid are co-owners of Indian Super League football club Atlético de Kolkata. Together, the latter’s group of co-owners is called Kalkata Games and Sports Pvt Limited. The group consists of former India cricket captain Sourav Ganguly, businessmen Harshavardhan Neotia, Sanjiv Goenka, and Utsav Parekh, as well as Atlético Madrid itself.

Many people will recall Ganguly as being one of India’s best ever cricketers as well as one of its most notable national team captains. However, he is now a member of Indian Premier League (IPL) cricket’s governing council as well as being president of the Cricket Association of Bengal. It is worth noting too that Ganguly’s fellow Kolkata group member, Sanjiv Goenka, is also owner of the IPL’s newest team – Rising Pune Supergiants.

IPL cricket is a phenomenon, capturing the attention (and the wallets) of sports fans in one of the world’s most populous nations. Television viewing figures for a round of IPL games are heading towards two hundred million, reinforcing cricket’s position as one of India’s leading forms of entertainment (alongside Bollywood films). And through its investments, partners and connections, Wanda is therefore invested into one of 21st-century sport’s biggest commercial properties.

Wanda paid US$1.2 billion for ISM in February 2015; the Swiss-based sports marketing company manages the marketing and media rights of several of the world’s leading sports organisations. One of ISM’s biggest clients is FIFA, specifically the World Cup, for which it produces television content. This is helpful to Wanda, given its entertainment ambitions, and to the Chinese government and its vision for football. Wanda also serves as a World Cup sponsor, which gives the conglomerate unprecedented access to FIFA’s top decision-makers. This is helpful for a nation intent on one day hosting world football’s biggest tournament.

With the 2022 Winter Olympics due to be held in Beijing, and with China intent onbuilding a winter sport economy, it is helpful too that ISM also represents all seven Olympic winter sport federations, and manages media rights for the International Ski Federation’s World Cup events. This part of Wanda’s network of influence intensifies even further, as China Media Capital (CMC) and Shanghai Media Group (SMG) also have stakes in ISM. This links Wanda into the Abu Dhabi United Group, the China International Trust and Investment Corporation (CITIC), and the City Football Group (which owns a 13 per cent stake in Manchester City).

Beyond these important nodes in Wanda’s network lies a multitude of further, intriguing relationships. For example, there are links to controversial businessman Li Ruigang, who was president of SMG until 2011, a position he now holds at CMC. In another case, Wanda’s ownership of the AMC cinema chain extends the company’s network into the National Basketball Association (NBA) through an AMC board member who co-owns the Philadelphia 76ers.

If, as Wang has stated, his businesses are wolves, then he is without doubt leader of the pack. Indeed, as a voracious hunter who has accumulated massive corporate influence through his knowledge and understanding of guanxi, it seems likely that Wanda will not stop at hunting down Disney. Several of global sport’s leading properties, as well as some of Hollywood’s biggest assets (like Dick Clark Productions, which runs the Golden Globes) have already been gobbled-up. Expect the feast to continue for the foreseeable future.


The guanxi of football

From British railways to Hollywood A-listers, a world of connections lies beneath Chinese football investments

Originally published in the Asia & the Pacific Policy Society Post here and the South China Morning Post here.

The purchase of a second-tier English football club by a Chinese conglomerate provides a window into a business culture of relationships and reciprocity, Simon Chadwick, Paul Widdop and Dan Parnell write.

When Chinese conglomerate Fosun International Limited acquired English second-tier football club Wolverhampton Wanderers (commonly referred to as Wolves), many of the club’s fans anticipated a cash windfall and some high profile player signings. Neither happened; indeed, the team’s performances were so unsatisfactory early on in the season that the team’s manager was sacked.

Fosun were clearly unhappy, as languishing in the lower reaches of second-tier English football neither cast the company in a positive light nor added significant value to China’s current football revolution. Even so, Fosun is unlikely to see its first foray into European club ownership as a disaster.

Football alone was never likely to be the only reason why Fosun bought Wolves. As a conglomerate, this might seem an obvious thing to say, as this type of organisation owns multiple businesses across a number of often-unrelated industrial sectors. At one level, Wolves could be just another investment in a broad portfolio of Fosun properties.

However, at another level, acquiring assets in football brings a much broader range of potential benefits. Fosun owns a 20 per cent stake in Gestifute, football super-agent Jorge Mendes’ player representation agency. Together, Gestifute and Wolverhampton have opened up a network to Fosun that is ultimately intended to be of much greater value to the company.

Networks in Chinese culture are so fundamental to doing business that China even has a name for it: guanxi. The literal translation of guanxi is often difficult to pin down but is sometimes defined simply as ‘relationships and connections’. Guanxi is rather more profound than Westerners might imagine, based upon their own notion of ‘connections’. It is a form of reciprocation – what Westerners may call ‘a favour for a favour’. That is, Chinese business people will often give something to someone in return for, at a later date, being able to ask that person to give something back or to exert influence on their behalf.

This is intended to enable Chinese businesses to create connections, relationships, and networks that help them bypass normal governance systems or conventional business practices. An important aspect of this is the social ties between individuals, which are intended to provide direct or exclusive access to insider information, business contracts or scarce resources.

In this context, it seems that Fosun’s acquisition of Wolverhampton Wanderers is a classic case of guanxi. Owning a successful football club in itself is good guanxi; with President Xi and senior members of his government having committed to a Chinese sports revolution, being part of the global football network makes good sense for Fosun.

Yet even if Wanderers do little more than play out the coming seasons in mid-table mediocrity, Fosun may not be too concerned. After all, guanxi dictates that there’s more to the Wolves deal than meets the eye. Indeed, having undertaken a social network analysis (which was derived from media sources) of Wolves and its new owner Fosun, it appears that the club is simply a hub in a much more significant collection of relationships and connections.

The diagram below gives some idea of what this network looks like:


Wolverhampton Wanderers’ owner Fosun is owned by Chinese billionaire Guo Guangchang. Guo is widely acknowledged as being one of China’s richest men, with a net worth of around US$5.9 billion. Guo has built a corporation with interests in everything from mining to pharmaceuticals to real estate. In many ways this is Guo’s guanxi, his network extending way beyond second-tier English football.
More significantly, in football terms, Fosun also set-up Foyo Culture and Entertainment Co Ltd. It is this company which in turn owns a minority stake in Mendes’ Gestifute. This provides agency services to football players through a subsidiary company, Polaris Sports. Among Polaris’ clients are Real Madrid players Cristiano Ronaldo and James Rodriguez. Polaris also works with current Manchester United manager Jose Mourinho, who has long-standing links with Jorge Mendes (his agent for many years).
Together, Gestifute and Polaris partner with American company CAA Sport (a global sports and entertainment agency), which has numerous clients across football including FC Barcelona and Chelsea. The agency is itself part of a larger company – CAA (Creative Artists Agency), which represents a number of Hollywood ‘A-List’ celebrities. Tom Cruise and Brad Pitt are two of CAA’s clients.
Cruise and Pitt may not appear to have too much in common with a post-industrial town in the middle of England, and are unlikely to be turning out on a Saturday afternoon in Wolves’ famed gold kit, yet our map of Wanderers’ guanxi network shows there is a road that stretches from Hollywood to Wolverhampton. This begs the questions: why, and what is the return on investment for Fosun?
In recent years, the Chinese conglomerate has diversified into films and television, via its production company Fosun Pictures. The network connections to Cruise/Pitt/CAA therefore make a lot of sense, especially if one looks ahead to a Fosun-produced Hollywood blockbuster at some stage in the future.
This still seems a long way, though, from Wolverhampton. However, the town’s location in England’s West Midlands conurbation (home to Birmingham – England’s ‘second city’) may hold some clues. Rumours are currently circulating that British terrestrial television broadcaster Channel 4 is about to relocate from London, with Birmingham thought to be its favoured location. It is also rumoured the move may be part of the development of a much bigger media and entertainment complex in the city.
A corporation like Fosun, already investing heavily into the sector, would therefore appear to be ideally placed to bid for contracts that might emerge out of such a development. At the same time, there are major plans for Britain’s HS2 rail link to pass through the West Midlands, which would generate further business opportunities. Fosun recently became the first private Chinese company to own a bigger stake (US$ 6.9 billion) than the government in a high-speed railway project. The company is therefore ideally placed to bid for HS2 work.
And this is how guanxi works: when Fosun bought Wolves, the conglomerate was not simply just buying a football club. It was buying into a network of relationships and connections that Guo no doubt knew would have much broader, deeper and financially lucrative implications for the conglomerate. While it seems unlikely that Brad Pitt will become a regular spectator at Wolves’ home games, the fact he forms part of the club’s wider network reveals a great deal about both guanxi and how Chinese business works.

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