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Monday, June 27, 2016, 10:53

Nice way to keep eyes on the goal

By Sophie He

European soccer is just one of the well-weighed investment choices made by US-based entrepreneur and co-founder of the 7 Days chain, Chien Lee. Sophie He reports.

Nice way to keep eyes on the goal
Chien Lee, co-founder-chairman, 7 Days Group Holdings Ltd,

founder-chairman, NewCity Capital (Edmond Tang / China Daily)

Chien Lee, co-founder of the Chinese mainland budget hotel chain 7 Days Group Holdings Ltd, acquired French soccer team OGC Nice with business partners on June 10, underlining his confidence in China’s rising sports and entertainment industry.

OGC Nice belongs to the French top division soccer league, Ligue 1. The team finished in fourth place in the 2015-16 season.

The acquisition continues a recent trend of European sports buyouts by mainland corporations. Dalian Wanda Group officially announced an investment of 45 million euro (US$51.04 million) to acquire a 20 percent equity stake in Club Atletico de Madrid, while Inter Milan recently announced in Nanjing the completion of Suning Holdings Group’s purchase of a 68.55 percent majority share in the Italian Serie A club for 270 million euro.

There’s more. Tony Xia Jiantong, the Recon Group chairman, purchased relegated English Premier League side Aston Villa, while Hong Kong-based Rastar Group acquired a majority share in Spanish side Granada CF.

Lee, a Chinese-American and founder-chairman of private equity firm NewCity Capital, has lived in the US for more than 30 years.

However, he has rich experience of investing in China as well as the rest of Asia, Lee told China Daily.

The likely sale of OGC Nice was brought to his attention about 10 weeks ago and, during the next two-and-a-half months, his business partners and he studied the proposition, and held meetings and negotiations, before finally closing the deal.

Lee said that his business partner from the US — Paul Conway — and he structured the deal and negotiated it together. While negotiations were on, Alex Zheng Nanyan, another co-founder of the 7 Days Group and president of hotel-owner Plateno Group, visited the US. Lee mentioned the sale to him and Zheng decided to join in the deal.

Along with US investor Elliot Hayes, the consortium acquired 80 percent of the club, with OGC Nice president Jean-Pierre Rivere retaining the rest, according to a statement from the club.

Lee said the reason why they formed an investment vehicle — OGC Nice Investment Company Ltd — in Hong Kong to make the acquisition was because the city is clean, open and transparent.

“People in Europe feel more comfortable that we acquired the soccer team from Hong Kong,” Lee said.

Going forward, he believes more people, especially entrepreneurs from the Chinese mainland, will use Hong Kong to register their investment vehicle, as the city and its investment environment are more acceptable to the US and European markets.

A light touch

Lee and his partners did not buy the Nice team just for the sake of it. “Before we bought the team, we had already laid out a plan about what we were going to do during the next five years. We did not just come in to buy a team because everybody these days says soccer is hot,” Lee emphasized.

“Can we grow the business after we acquire it? What can we bring besides money? What kind of resources and network can we bring to Nice? Those are the most important questions we asked ourselves before we closed the deal.”

OGC Nice has a fantastic management and first-class facilities, a great 36,600-seat capacity stadium and a top-class soccer academy, Lee said.

Lee, Conway and Zheng have decided that they will leave 100 percent of the soccer operation in the hands of the existing management of Nice, and only support the team financially and commercially.

Lee said he knows that in China, a lot of people are very passionate about soccer and noted that the country has mapped out a plan to speed up the development of its sports industry. It may be recalled that on Oct 20, 2014, the State Council announced a set of guidelines to boost the industry and promote sports consumption.

“Before 2020, we will have 20,000 soccer academies on the Chinese mainland to nurture young players to become professional soccer players,” Lee forecast.

“Nice has one of the top European soccer academies. We can bring their academy to China and, by working with Chinese soccer teams, China and Europe can grow the soccer industry together. There are huge opportunities in China for Nice,” Lee said.

Another plan is to bring the Nice team to China during the off season so they can play with different Chinese teams. Young Chinese soccer players can also come to Nice’s academy so youngsters from both countries can learn together.

“The way forward is not just soccer. Nice is a very beautiful city, we can bring Chinese tourists to Nice, they can enjoy their tour and watch a soccer game. We are also looking to buy a hotel in Nice. Soccer is a good platform, so you can expand to other businesses.”

Lee said he constantly searches for investment opportunities in China, and he focuses mainly on the consumer retail sector.

“I feel that with the growth of the Chinese middle class, the consumer sector still has great potential.”

Deal by deal

Lee expects the tourism industry to become China’s leading sector, while hospitality and home care will be huge. “I’m also confident that sports and entertainment will have a great future in China too.” Lee is aware that a slew of Chinese companies have invested in European soccer clubs recently. He thinks the trend is positive, as soccer in China holds huge opportunities.

But he also believes that while the industry is great, the scenario still needs to be evaluated deal by deal. “I noticed that during the last few years, Chinese companies have been going overseas to buy a lot of assets, but my suggestion is, be careful. You need to know what to buy and how to buy, and after you have bought the project you need to make sure that you can take it to another level.”

He warns that although many Chinese companies have a lot of money now, they should spend smartly and cautiously, unlike the Japanese in the 1980s who bought up every US asset possible. But they paid very high prices and a lot of those assets were foreclosed.

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