State Investment

Major League Soccer

The United States government does not directly invest in MLS. However, many teams are beginning to build soccer-specific stadiums instead of the American football stadiums they had previously been allowed to use. The government does require member clubs to receive approval before building stadiums but allows local governments to allocate public funding toward construction. Currently, there are 26 stadiums for the 26 MLS teams, some of which have been built by tax dollars and others by corporate investment. A 2018 study that analyzed data from 18 of these soccer-specific stadiums found that public investment accounted for an average of 33 percent of funding.[1] The rationale behind this public investment is that these stadiums will bring increased tourism to their surrounding area, but many taxpayers are not keen to wait for the returns and prefer if private funding were to be used instead. The next four teams to join MLS – Austin FC, Charlotte, Sacramento, and Austin – will all be largely privately funded.

The plans for the Sacramento Republic stadium, Railyards, is pictured below. Railyards will be the newest stadium and is expected to cost $252 million, with only $27.2 million in loans coming from the Sacramento City Council.[2]

Chinese Super League

The Chinese government’s involvement with the CSL is more complex relative to the United States and MLS. In 2015, President Xi outlined his campaign to transform the underachieving men’s national team into a “first-rate major footballing power.”[3] This plan does not specify allocation funding for the CSL but has spurred an increase in investment across Chinese corporations, many of which are state-owned. Before 2013, the CSL was practically only supported by team owners, with no stable organization or long-lasting sponsorship arrangement. After Guangzhou’s Asian Champions League Victory, however, the CSL raised over $60 million in one year through new sponsorship agreements and Chinese companies tightened up multi-annual agreements. Although this investment appears to be private, the corporations who own the member clubs of the CSL are at least partially controlled by the state. For example, Guangzhou Evergrande club is majority controlled by the multi-billion dollar Evergrande Real Estate Group, the Shanghai International Port Group – the biggest berth for Southeast Asian merchant vessels owned half by the government, the Shanghai Shenhua Greenland – another real estate group 50% owned by the government, and Hebei Fortune which belongs to the state-owned company China Fortune, Ltd.[4]

Evergrande Real Estate Group is set to build three new stadiums for the league, two of which with an 80,000 person capacity and one with an 100,000 for its club, Guangzhou Evergrande. Construction of the Guanzhou Evergrande Soccer Stadium, also called the Lotus Flower Stadium, is set to cost $1.7 billion. This stadium will be the largest stadium in the world, surpassing Barcelona’s Camp Nou.[5] Evergande’s investment, on behalf of the government, highlights President Xi’s commitment to boost China’s economy through sport. The plans for the Lotus Flower Stadium are depicted below.

The Chinese government’s role, via corporations, helps explain how the CSL has been able to build expensive stadiums and buy expensive players in a short period of time compared to MLS. China, as the world’s second biggest economy, has the resources to dedicate to soccer development and decrease risk for corporate investors. However, governmental ties also make the relationship between soccer and funding much more political. The disassociation between U.S. government and MLS does give U.S. more freedom to develop as it wishes, but it also does reduce funding prospects and perhaps makes soccer development less exciting to the general public.

[1] Flager, “Analysis: Public,” Community Impact Newspaper.

[2] Symon, “California Leads,” California Globe.

[3]  Moir and Howler Magazine, “China Is on a Mission,” ESPN.

[4] “Financial Analysis,” UK Diss.

[5] “Evergrande to Built,” China Daily.