CFA president insists it's now or never to avert major financial disaster

Chen Xuyuan has warned that failure to reform Chinese soccer's finances now would have devastating consequences for the country's professional leagues.

"To end Chinese soccer's spending spree, we need to be absolutely resolute," the Chinese Football Association president said in a CCTV interview on Friday. "Many investors have said it's unsustainable to keep operating like before. If we don't take any action, we could face the wider financial collapse of Chinese soccer.

"That is unacceptable. We need to continue with the salary cap and spending restrictions on clubs. That's a joint decision of the CFA and investors. The spending of a Chinese Super League club is three times higher than a Japanese top-tier club, and in some cases the salaries of our players can be ten times higher than theirs.

"But what about our players strength on the pitch? And what about our investors' abilities?... We are restricting the financial bubbles of our professional leagues. The installation of the salary cap won't affect the quality of the league too much, and it will still be one of the top leagues in Asia. We remain an attractive proposition to good foreign players."

The latest casualty of the league's financial woes is Jiangsu FC. The club formerly known as Jiangsu Suning ceased operations in late February, just months after being crowned CSL champion for the first time.

Tianjin Jinmen Tiger, formerly known as Tianjin Teda, is also expected to miss out next season after reportedly amassing unpaid player wages and failing to submit the relevant financial registration forms on time.

Before the start of the 2020 season, 16 teams of all levels, including then CSL outfit Tianjin Tianhai, were forced to quit China's pro ranks due to money troubles. However, Chen claims the outlook this year is not quite so bleak.

"Last season more than a dozen clubs quit the professional leagues, and most of them were second-and third-tier teams. This year, based on the current audit situation, about six or seven teams will quit due to financial problems," he said.

"We've noticed that some clubs are facing operational problems, and we are communicating closely with them. It's very hard for Jiangsu to keep playing next season, so they've decided to cease operations.

"Tianjin Teda is also facing difficulties. We are also waiting for further confirmation about their plans for next season. The CFA and the General Administration of Sport of China are paying close attention to these problems and trying to find solutions. Personally speaking, it truly is a pity to see a CSL champion face such a situation."

New era

In December, the CFA installed the strictest salary cap in its history, aiming to set clubs on a healthier development path.

Beginning next season and applicable through the 2023 campaign, domestic players' salaries in the CSL are capped at 5 million yuan ($760,000) before tax. In addition, clubs' total expenditure each season should not surpass 600 million yuan.

Foreign players' wages in the CSL are capped at 3 million euros ($3.3 million) before tax. Each club's annual expenditure on imported players should not exceed 10 million euros before tax.

Those new limits have resulted in the exodus of a number of high-profile stars, including former Shanghai Port (then known as Shanghai SIPG) striker Hulk, who has returned to his native Brazil to play for Atletico Mineiro, and Slovakian playmaker Marek Hamsik, who has departed Dalian Pro for Swedish club IFK Goteborg.

Fueled by investors' cash, the CSL's pursuit of such players in the past has loaded clubs with debt. And now with little or no profits to show for it, investors are pulling the plug.

During Friday's interview, Chen said that soccer was part of "public welfare", taking a swipe at investors' retreat and urging them to show more "social responsibility".

That sparked heated discussion online about the role of the corporate world in the Chinese game.

Investors have also been spooked by new CFA rules which require clubs to remove references to sponsors from their names.

Eight-time CSL champion Guangzhou Evergrande was among the clubs to complete the renaming process in the offseason, becoming Guangzhou FC, while the likes of Beijing Guo'an has yet to announce its new name as the capital club deals with issues regarding its ownership structure.

Some observers have suggested the CFA should grant clubs some leeway with the new policy as they attempt to recover from the financial impact of the COVID-19 pandemic. However, the CFA president believes pressing ahead with "neutral" names now is the right course of action.

"We have been pushing the name-changing policy for five to six years, and why couldn't we see any progress?" said Chen. "Using neutral names will benefit the clubs' healthier development. We have established a special department to review the new names. We don't have a preference on the choice of names, just as long as they meet the requirements of the rules.

"Some clubs may face money troubles due to the name-changing requirement. But the policy is not the main reason for their financial plight. Also, investors' profits from clubs do not just result from the exposure their name gets."