West Brom takeover and Guochuan Lai investment explained

Chinese businessman Guochuan Lai is the new owner of West Bromich Albion
Image: Chinese businessman Guochuan Lai is the new owner of West Bromwich Albion

On Friday, West Bromwich Albion became the first Premier League club to be acquired by a mainland Chinese owner.

We spoke to our former Soccer Saturday colleague Mark Dreyer, who has been based in China since 2007 and now runs the China Sports Insider website, to get the lowdown on the deal…

What do we know about The Yunyi Guokai (Shanghai) Sports Development Limited group?

MD: It is in essence a very new company, formed specifically to buy West Brom, comprised of funding from three places: an asset management company known as Yunyi Investment, a company called Palm Eco-Town Development that specialises in landscape design, and Mr Guochuan Lai, a businessman with connections to the previous two companies.

West Brom confirm takeover

West Brom confirm takeover

West Brom chairman Jeremy Peace has sold the club to a Chinese investment group

It is unclear, however, whether or not these three elements have contributed equally, and I understand that West Brom is not releasing the terms of the deal or even revealing the total purchase amount at this time.

It is headed by entrepreneur Guochuan Lai, what type of figure is he?

MD: Until today, he was virtually unknown and, while people in the Midlands have been scratching around trying to dig up anything they can on him, I can assure you it's been a similar story in China! Yes, he appears to be pretty wealthy, but there are an awful lot of millionaires in China - plus an increasing number of billionaires - and given the opaque nature of the business environment here, it is still possible to fly largely under the radar. And do not believe for a moment the tales he has been telling about West Brom's 1978 trip to China being an important part of the deal. Mr Lai would have been three or four at the time, so I hardly think he's been in love with the club ever since, saving up enough money until he could buy his beloved Baggies!

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Jeremy Peace (left) is to step down as chairman of West Brom, with John Williams (right) taking over. Image: West Bromwich Albion
Image: Jeremy Peace (left) is to step down as chairman of West Brom, with John Williams (right) taking over. Image: West Bromwich Albion

WBA have been transformed under Jeremy Peace into a stable Premier League club but there was no hope of further investment under Peace, what can the new owners bring to the Hawthorns?

MD: Many fans assume that new mega-rich owners will simply throw millions at the team in the way that we've seen happen at Chelsea and Manchester City, for example, but I don't see this happening. The vast majority of Chinese owners are very successful businessmen who have either made a lot of money themselves through smart decisions or are backed by sizeable investment.

My guess is the club will get a decent level of investment, at least in the short term, but fans shouldn't expect to be winning the league anytime soon!
China Sports Insider's Mark Dreyer

They will have bought these clubs primarily because they see the potential to make money, but they are smart enough to realise that money is made through on-field success and that this requires investment. Given that Lai's background is largely unknown, it is impossible to know how much money truly lies behind him. My guess is that the club will get a decent level of investment, at least in the short term, but fans should not expect to be winning the league anytime soon!

What do you think of the fact that this summer three great local rivals Wolves, Aston Villa and West Bromwich Albion have all been sold to the Chinese? Does this add a layer to the rivalry and could it capture the imagination of fans in China?

MD: It's certainly an incredible coincidence, but I do not think there is anything in the Midlands connection other than the fact all three had been looking for buyers at a time when many Chinese individuals and companies had been looking to invest. The trio will now inevitably be comparing the amount of investment put in by their new owners, as well as the number of transfers made, but performance on the pitch will still trump everything else, and as we saw last year with another Midlands club, Leicester, it is not simply a matter of who pumps in the most cash.

Ben Foster of West Bromwich Albion (C) during the GelreDome tournament match between Vitesse Arnhem and West Bromwich Albion on July 21, 2016
Image: Dreyer expects the new owner to make investments in the West Brom squad

Many people have asked me if this will mean that Chinese fans will now start supporting these clubs because of their new Chinese owners. In a word: no. Chinese fans will continue to support their favoured clubs across the top four or five leagues in Europe and are increasingly turning out to support their local teams in the Chinese Super League - now being broadcast live on Sky Sports.

The real game changer in terms of winning over Chinese fans, however, would be if one or more Chinese players lined up for these teams and, while I don't see that happening in the immediate future, Chinese owners clearly have more direct links back home through which to promote improving Chinese players should they be of a high enough standard.

This is another foothold in the British game for the Chinese - is it time we all sat up and took notice of what is happening?

MD: I think anyone who is still surprised by all the investment at this point has not been paying attention. Both Milan teams have now been snapped up by Chinese owners in the past few months, as have several other clubs in Spain, France, the Netherlands and elsewhere in Europe, so this is not a new phenomenon, even though all of that investment has come in the past 18 months or so.

This all comes as a direct result of China's government-backed plan to develop its domestic sports industry and, ultimately, improve the level of China's national team, so this investment needs to be viewed as just one part of that wider plan.

Specifically with regards to British football, though, I definitely expect to see more deals being made - Hull and Leeds have both been mentioned recently with regards to Chinese investment. Fans should enjoy it while they can, before all the top players are lured away to play in China!

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