Alibaba to buy 1.2 billion yuan stake in Guangzhou Evergrande soccer club
After a night of drinking in Hong Kong, Alibaba chairman Jack Ma Yun woke up one morning recently to find his company a half-owner of the country's most successful football club.
The price he paid - 1.2 billion yuan (HK$1.48 billion) - was a bargain, he said.
It was the latest in a flurry of new deals the e-commerce giant has made as it expands into entertainment and other fields ahead of a multibillion-dollar initial public offering, slated for August 8 in New York.
The deal with the Guangzhou Evergrande Football Club, which is owned by the country's third-largest property developer, came as a surprise to many, including Ma. He openly admitted he "never takes an interest in football nor understands it."
Ma said yesterday that he was "investing in happiness" at a press conference with club chairman Hui Kayan in Guangzhou.
"We're not only investing in Evergrande, we are investing in Chinese football," Ma said. He said the whole deal came together in a quarter of an hour and that the 1.2 billion yuan price tag was cheap.
"We were drinking in Hong Kong a few days ago" when the idea was mentioned, Ma said, referring to himself and Hui. "I told him, under the influence of alcohol, that it was doable. I woke up the [next] morning and I wanted to thank him.
"The money was decided within 15 minutes. Hui asked me to make an offer but I told him I wasn't sure how much a football club would cost. So I said 1.2 billion yuan for half of the shares. He agreed straight away.
"It's a good deal. The value of Evergrande Football Club is way above that price."
Some mainland media speculated that Ma was using the deal to promote his fledging crowd-funding platform Yuebao. Some even suggested that in future the club would experiment using crowd-funding to buy players and build facilities.
Ma did not directly comment on such reports when he was asked, but he said that his group would introduce "game-changing" innovation to revamp soccer in China.
"I believe Hui wants me to introduce some changes … We will use a new approach to help upgrade the traditional business model [of soccer] with e-commerce," Ma said.
Guangzhou Evergrande is already considered one of the richest clubs in Asia. The club is managed by Marcello Lippi, who won the World Cup with Italy in 2006, and have just won the Chinese Super League and the AFC Champions League titles in 2013.
Hui said they had plans to further expand the club and attract more investors.