Recent headlines have proclaimed “the end of Chinese transfers”, with the purchase of Southampton FC by Lander Sports’ Gao Jisheng appearing to sneak in just under the deadline. Part 1 (below) will take a look at what the Gao deal means for Southampton – and what fans can reasonably expect – while Part 2 will analyze the wider implications of Chinese takeovers following the latest developments and regulations.
The transfer of Southampton FC into Chinese hands – the second Premier League club after West Brom to be Chinese-owned – is a big deal.
Granted, it’s not a glamor club like Manchester United or Liverpool – and so doesn’t quite get the headlines to match – but Southampton is a solid top-tier club. Apart from a fall from grace in 2005-12, when the club fell out of the Premier League and even spent two seasons n League One before back-to-back promotions, Southampton has been in the top division of English football since 1978.
The club’s last four finishes has been 8th, 7th, 6th and 8th, qualifying for the Europa League in each of the last two seasons. Outside of the rotating top six clubs of Man Utd, Man City, Liverpool, Chelsea, Arsenal and Spurs, only Everton could make a case for a being a bigger club, on both recent and historical form.
So, again, it’s a big deal and certainly the biggest in a wave of acquisitions of English clubs by Chinese investors. But what are the prospects for Southampton? And just who is this Gao Jisheng fellow, whose daughter Nelly has apparently become BFFs with Katharina Liebherr?
80% ownership = 100% control
First of all, this is not a partnership, as Liebherr has suggested. The Gaos now own 80% of the club, with Liebherr retaining a 20% share, so unless she has been granted some veto power that no one knows about, the Gaos can do whatever they want, whenever they want. Of course, both sides are saying all the right things about working together, business as usual, continuing “the Southampton Way” ™ etc – really, what else could they say? – but majority partners take a controlling stake for a reason.
Maybe because the shareholders are going to work together?
— Matt Le Tissier (@mattletiss7) August 16, 2017
😃you could find the negative with a euromillions winning ticket in your hand 🙄
— Matt Le Tissier (@mattletiss7) August 16, 2017
Secondly, Chinese businessmen are not philanthropists – or the proverbial white knights riding in to save a club – nor should anyone expect them to be. It continually amazes me how often fans (or, in the case above, club legend Matt Le Tissier) truly believe, simply because they want to believe.
There’s no reason per se to believe that Gao Jisheng or other Chinese owners in football have malicious intentions with regards to the clubs they run (although asset strippers and the like have become all too common in the lower leagues over the years). However, it’s imperative to consider the owner’s true motivations.
In the best of the “reasonable case” scenarios, this boils down to making money, which should – hopefully – benefit both owner and fans, assuming that the money-making stems from on-pitch success, rather than selling off players and/or asset stripping. Yes, for some owners having a club is a status symbol, so they treat it as something of a vanity project, but it’s a huge reach to go from that to the expectation of an Abramovich-style sugar daddy throwing money at the club with no thought of any financial return. There are some very rich people in China, but they’re not idiots.
Only billionaire fans could reasonably be expected to do this and Chinese owners are businessmen, not fans. Take Tony Xia, for example, who led us to believe that he fell in love with Villa after seeing them play Arsenal back in his student days. While I’ve been pleasantly surprised by his often-rambling-but-always-entertaining fan engagement on Twitter, I would hope that no one reading this truly believes he’s been a die-hard Villa fan for decades.
Can father and daughter lead the club to glory?
Gao Jisheng is clearly the man making the decisions at the moment, but let’s also look at his daughter, Gao Jingna (aka Nelly Gao), who would appear to be the presentable English-speaking face of the family franchise and likely the main conduit between China and the club. A quick scroll through her Instagram account reveals someone apparently obsessed by the finer things in life (jewelry, helicopter rides, fine dining, overseas travel), with a very passing interest in sport (clip of a Saints game in April, a visit to Real Madrid last year, an NBA game before that etc.). Again, not a fan, and even if she was, would her father really open the purse strings on a whim?
As an aside, it is genuinely refreshing to see two women involved in football at such a high level, but take a look at this quote about the drawn-out nature of the sale from a Finance Asia story:
“The sell-side advisors thought it would take only six weeks to close it,” said the source, adding “had Southampton known it’s going to take so long, it would probably have picked another bidder”.
That doesn’t exactly sound like Liebherr and the Gaos forged an inviolable friendship, rendering quotes like this one from chairman Ralph Krueger somewhat hollow:
“[Liebherr] was searching for somebody who really embraced what is happening here, the way club is run, the culture and everything.”
The Southampton Way indeed.
Gao’s firm, Lander Sports, which was originally going to buy the club, before the late switch to Gao himself, sounds like a promising company to be associated with, but it’s been a real estate vehicle up until 2015 when it miraculously rebranded itself – adding the “Sports” moniker – following the Chinese government’s push to develop the domestic sports industry. In other words, Gao Sr is an opportunist, not a sports guy.
That said, the only indication so far is that the new owners will allow Krueger and his team to carry on as normal in the near term, but if things don’t go according to plan in the longer term, all bets are off.
Is the criminal behavior all in the past?
Finally, what of Gao Jisheng himself? His background is certainly another question mark. In summary, he was caught paying bribes in order to win state contracts, but, in return for immunity, he became a witness for the prosecution, with his testimony leading to the execution of two officials. This bribery issue initially led the Premier League – not exactly known for its strenuous checks of potential owners – to block Lander’s bid for the club, but it appears that was overturned on legal grounds because Gao’s deal meant he was not technically convicted of any offense. As a direct consequence of this outcome, the Premier League voted to approve tougher ownership rules in case something like this ever arose in the future.
In other words, the Premier League did everything it could to stop Gao buying Southampton – but he bought the club anyway. What’s more, all 20 clubs – i.e. including Southampton – approved these new ownership rules, further calling into question the inviolable Liebherr-Gao bond.
While you can explain away Gao’s background by arguing that paying bribes is simply the cost of doing business in China (at least until the government’s anti-corruption drive kicked into high gear last year), and that the fact that two people died was completely out of his hands, how many Southampton fans can truly say this sounds like a man they want running their club?
Again, the best case scenario still sees the club doing well on the pitch – which is all fans really care about – but, given the roller coaster nature of this protracted takeover, the evidence suggests that the Gao era will be anything but smooth.