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The behind-the-scenes story of Suning’s Inter Milan deal

By Chen Yaping 20 Jun 2016

Two weeks ago, Chinese retail giant Suning Commerce Group announced that it has acquired an approximate 70% stake in the Italian football club Inter Milan. This deal, which is valued at about €270 million, has become a milestone in the company’s sports plans.

Meanwhile, this move has also led to a heated discussion: was it worth it?

Some people claim that Inter Milan, despite their renowned fame in the soccer market, have been on the decline since the year 2011. According to a Forbes report The World's Most Valuable Soccer Teams 2016, Inter, with a €495m Team Value, have dropped from 10th place in 2011 to 16th place this year.

Even worse, the club has not qualified for the Champions League since 2013. This season, the Italian club finished fourth in Serie A, their best since 2011.

However, others fully appreciate Suning’s bold decision. “In the Chinese Super League(CSL), an international transfer deal can cost as much as €50m, so it’s worth buying a 108-year-old soccer giant at such a price. ” said an industry insider.

“The acquisition of Inter Milan is part of Suning’s strategy in the development of the sports industry,” said Zhang Jindong, chairman of Suning,“This will help Suning to grow internationally.”

The Inter deal is an important move for Suning’s international expansion. While domestically, its sports strategy features investment in sports media, soccer clubs, sports data and e-sports.

The company’s involvement in sport began early in 2013, when it invested $250 million in the video website PPTV then acquired the broadcasting rights of sports icons such as La Liga and Premier League games. Recently, the digital media company has entered into an exclusive multi-year content distribution agreement with World Wrestling Entertainment ( WWE). Buying into PPTV, so to speak, has helped Suning position itself as a major digital broadcaster of sports events in this country.

At the same time, Suning is looking to improve club management in China through the acquisition and sponsorship of local soccer clubs. Last December, Suning took over the Chinese Super League side Jiangsu Sainty FC at RMB523 million. This April It announced a new title sponsorship with Jiangsu Ladies Football Club.

In addition to this, the e-commerce giant has added the business of sports data to its sports ecosystem. In May, a subsidiary of Suning led an RMB 32m investment in Shanghai-based sports data company CHAMPION. This deal will help Suning combine data analysis with club management, sports broadcasting and more businesses.

Suning’s sports business in 2016 also includes youth training and e-sport. The Nanjing-based company has decided to set up startup boot camps, with a total investment of RMB 0.3 billion. It is expected that an area of 10,000 square meters in Nanjing will be developed into a “makerspace” providing free services like cloud-computing, big data and human resources.

At present, Suning is also actively promoting the e-sport business. In terms of the e-sport ecosystem, Suning is devoted to an omni-directional platform, where users have access to events broadcast via mobile devices, computers and television.

Proofread by Sean O Diobhilin

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