March 9 – Premier League Southampton are up for sale again with Jisheng Gao having reportedly instructed brokers to sell his 80% stake for £250 million. Goa completed his acquisition of the Saints in August 2017 for £210 million.
Gao’s background is in construction in China, mainly with large public projects. His Lander Sports Development company has not been successful and reported a loss in 2018 which resulted in a majority stake being sold to a state-owned asset manager last March. If Gao achieves the £250 million price tag the £40 million profit in just under three years would be a significant and face-saving return for the embattled Chinese businessman.
Although Gao’s sale prices values the club at about £310 million, the club’s turnover in 2017/18 dropped from £178.3 million to £148.4 million. The bulk of this – £117 million – was from broadcasting, with matchday proceeds tumbling from £20.9 million to £16.7 million and commercial revenue more or less flat at just over £13 million.
However, the Saints still reported a £33 million profit in the 2017/18 season, one in which they sold Virgil van Dijk to Liverpool for £75 million, but are unlikely to match that for the 2018/19 season which has still to reported.
With Premier League survival looking reasonably certain, Gao has, according to the Sunday Times, lined up a number of player agents and intermediaries to raise money from player sales and reduce the wage bill.
Under Gao the club has had three managers – Mauricio Pellegrino, Mark Hughes and Ralph Husenhuttl and two chief executives. Only Husenhuttl has provided any form of stability and direction for the team.
However it has come at a price. The ratio of wages to turnover rose from 61% to 74%, with the club having been active in the transfer market but with a number of those expensive signings out on loan, while others have failed to find their feet on the South Coast to justify their price tag.
Gao told the Financial Times: “I am not treating Southampton as a pig to be fattened and sold. I am treating is as a child. But my children must believe that they cannot depend on the boss. I have said to Southampton, ‘I am now your father. But I am putting you on the right track. You need to feed yourself.”
Gao’s acquisition of Southampton was a long-winded process with doubts over whether he could raise the money at a time when Chinese authorities were going cold on the idea of Chinese cash being ploughed into what they termed expensive, vanity investments.
However Gao was given time to complete the deal by Saints owner Katharina Liebherr who had inherited the club when her father who died in 2010. He had funded the club’s return to the Premier League.
Gao’s bid was despite a number of other rumoured bidders reportedly prepared to offer the same as amount as Gao, but not prepared to have Liebherr remaining with a stake in the club.
With the Saints stake in the wind again, Liebherr will likely have a say in where the majority ownership ends up.
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