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Guangzhou FC, once China’s leading professional football club and a symbol of the country’s aspirations in the sport, has been dropped from the national league after a drawn-out saga related to the collapse of property developer China Evergrande, which bought the team in 2010.
The club — which won eight national league titles from 2011-2019, topped Asia’s Champions League twice and drew in names such as Brazil’s Robinho and Italian coach Marcello Lippi — failed to meet financial entry requirements.
In a statement that referred to Guangzhou and two other ineligible clubs — the Cangzhou Mighty Lions and the Hunan Billows — the Chinese Football Association cited wage arrears and debt issues.
Guangzhou’s ineligibility is the latest blow to Chinese football, which President Xi Jinping sought to develop when he came to power in 2012. In recent years, the sport has grappled with corruption scandals and financial issues at the companies backing the teams.
Guangzhou FC, formerly named Guangzhou Evergrande, on Monday blamed its “historical debt burden” and the “insufficient funds” to address it. “To all those who cared about and supported the club, we express our sincere apologies,” it said in a statement.
After its purchase by property developer Evergrande in 2010, the club embarked on a spending spree that included a host of big-name signings, echoing the boom years of China’s vast and heavily indebted real estate sector. A host of other top developers also owned teams named after them.
But the failure of its majority owner in late 2021 derailed the club’s plans for a new Rmb12bn ($1.6bn) stadium in southern China’s Guangzhou, mooted to be one of the largest in the world, and relegated the club to the Chinese league’s second tier.
In early 2021, the club removed Evergrande from its name under a new rule prohibiting company names to be used in football teams. In its most recent annual report, for the year 2022, Evergrande did not mention the club except to state it had returned land use rights for the stadium to Guangzhou authorities.
Evergrande, with more than $300bn of liabilities as of 2022, frantically sought to dispose of non-core assets following its default on international debts in late 2021. Chinese authorities have focused on getting the company to complete unfinished housing projects.
The football club was a big focus for Evergrande founder Hui Ka Yan, formerly China’s richest man, who is under investigation in the wake of his company’s collapse.
Evergrande invested Rmb1.9bn to build Evergrande Football School, one of the world’s biggest residential football academies, with the help of coaches from Real Madrid in 2012, state media reported at the time.
Guangzhou FC’s struggles follow the dissolution of Jiangsu FC in 2021 by its owner Suning Appliance Group, also owing to financial issues. Suning, which until last May controlled Inter Milan, was hit by an investment in an Evergrande subsidiary that failed to list.
Corruption issues also plague the country’s football league. Last September, the Chinese Football Association banned 43 people for life after an investigation uncovered match-fixing.
Additional reporting by Wang Xueqiao in Shanghai
