Menu
Jeff Goldblum Stars in funny GE Link Ad

Jeff Goldblum Stars in funny GE Link Ad

iPhone 6c is possible as iPhone 5c Sales Surge

iPhone 6c is possible as iPhone 5c Sales Surge

Pee-Wee Herman stars in New TV on the Radio Video

Pee-Wee Herman stars in New TV on the Radio Video

Windows 10 Preview Download Release is Today

Windows 10 Preview Download Release is Today

William Shatner and Leonard Nemoy to Star in New Volkswagen e-Golf Commercial

William Shatner and Leonard Nemoy to Star in New Volkswagen e-Golf Commercial

Alibaba Spends Big on Soccer Team ahead of IPO

Jun 6 2014, 3:21am CDT | by , in News | Latest Business News

Alibaba Spends Big on Soccer Team ahead of IPO
Photo Credit: Getty Images
 
 

YouTube Videos Comments

Full Story

Alibaba Spends Big on Soccer Team ahead of IPO

Do sports teams and online shopping have synergies?

That’s what analysts and potential investors are wondering on Thursday after billionaire Jack Ma announced that his Chinese ecommerce giant Alibaba spent $200 million recently for a 50% stake in the Guangzhou Evergrande soccer team.

Alibaba is headed for one of the largest initial public offerings in history, with a valuation some expect to surpass $250 billion. But that IPO will be based on Alibaba’s massive ecommerce business, which facilitates more transactions per year than Amazon and eBay combined.

In recent months Alibaba has ventured outside of the ecommerce space — but its purchases have generally stuck to other Internet properties. For example, this year Alibaba invested over $1 billion for stake in online video site Youku Tudou. Such an investment could theoretically help Alibaba become a more competitive player across all of China’s burgeoning web-connected marketplace.

But a soccer team? That’s a truly head-scratching purchase. Plenty of billionaires use their own money to buy trophy teams — including Steve Ballmer’s recent $2 billion winning bid for the Los Angeles Clippers — but few public companies own sports franchises. Those that do tend to be entertainment conglomerates, like the Madison Square Garden company’s ownership of the New York Knicks and Rangers.

And if Wall Street onlookers are wondering what Jack Ma is thinking, his stated rationale won’t win many supporters. Here’s what The Wall Street Journal reports Ma said in a news conference:

“It’s actually cheap,” Mr. Ma said, adding, “I had no idea how much a soccer club is worth.”

Mr. Ma said coming from outside of soccer gives him a different perspective and might embolden him to break rules, which could help improve the club. “I think not understanding soccer doesn’t matter. I also didn’t understand retail, e-commerce or the Internet, but that didn’t stop me from doing it anyway,” he said.

Maybe Ma is right. He has certainly been extraordinarily successful in his other ventures. And the sport of soccer does have plenty of room to grow in China. But that still doesn’t explain why he bought the team through Alibaba, instead of out of his own pocket, when he admits to not knowing much about the sport at all and points to no obvious synergies.

Guangzhou Evergrande was previously owned outright by property developer Evergrande Group, controlled by another Chinese billionaire – Hui Ka Yan. Last year, the team became the first Chinese squad to win the Asian Champions League.

Follow Brian on Facebook and Twitter.

The World's Most Valuable Soccer Teams 2014

 

Updates


Sponsored Update


Advertisement


More From the Web

Shopping Deals

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

Comments

blog comments powered by Disqus

Latest stories

Steve Smith on Release From Carolina Panthers: 'It Was Personal'
Steve Smith on Release From Carolina Panthers: 'It Was Personal'
Baltimore Ravens wide receiver Steve Smith opened up about his release from the Carolina Panthers on Charlotte radio station WFNZ on Oct. 1. Smith said, "It was personal" and felt he "was stabbed in the back."
 
 
Jay Z Profiled
Jay Z Profiled
Luckier than the Luckiest Chap on Earth!
 
 
Microsoft teases Windows 10 phone and Xbox interfaces
Microsoft teases Windows 10 phone and Xbox interfaces
Some subtle changes can be seen in the updated interface
 
 
Isla Fisher Pregnant with Third Child with Sacha Baron Cohen
Isla Fisher Pregnant with Third Child with Sacha Baron Cohen
It is a big 24 hours for Celebrity pregnancy news. Now news break that Isla Fisher is pregnant.