In August, Southampton FC became the latest European club to become part of China's football
revolution.
Not many people on the south coast had heard of Gao Jisheng – the chairman of a Chinese
company called Lander – who had bought 80% of the
club for £210 million from Katharina Liebherr and
became the sixth English club to be bought – or invested in – by a Chinese company
or consortium.
Liebherr had inherited the club from her father Markus Liebherr, a member of a famous German
business dynasty with a wide range of interests from construction machinery to printing.
In 2009, and with Southampton in administration, a holding company controlled by Marcus bought
the club and saved it, laying the foundations for a return to the Premier League in 2012.
Unfortunately, Marcus wouldn't see that dream become reality.
The hugely popular owner died at the start of the 2010/2011 season of a heart
attack at just 62.
The club passed to his less popular daughter.
Whilst Southampton continued to thrive, there was still the feeling that the club was bequeathed
to Katharina, rather than adored by her.
And in 2016, reports began to emerge that a Chinese
billionaire was interested in buying the club.
But it wasn't as quite as simple as that.
Gao Jisheng is something of an enigmatic character.
Whilst little is known about his early life, his
personal website tells a rags to richest tale.
He lists a number of former professions, including farmer, journalist and, most intriguingly,
as an armed police officer.
However, he began making serious money in China's real estate boom
in the 1990s.
His Lander Real Estate company, which he owns 59% of, alongside his daughter Nelly, suddenly
exploded in value in 2014, the shares growing by 700%, and making Gao Jisheng a billionaire.
Soon after he would change the name of his company to Lander Sports Development Co Ltd.
Why?
The answer can be found, in part, at Manchester City's training ground.
In 2015 Chinese Premier Xi Jinping visited alongside then British Prime minister David
Cameron, chairman Khaldoon al Mubarak, and, of course,
Sergio Aguero.
Xi is a huge football fan and since coming to power in China he has sparked a series
of radical reforms of football and the football business
so that it would become a world leader in both sport
and the business of sport.
Tens of billions of Chinese Yuan began flowing into the Chinese Soccer League, player
acquisitions, foreign football clubs, TV rights...
you name it, if it had anything connected to sport,
someone in the Chinese elite would buy it, even if it wasn't connected to their core
business.
After the Xi visit to Manchester, China Media Capital, in conjunction with a state owned
investment vehicle, bought a 13% stake in City Football
Group for $400 million.
The investments appeared to be made for two reasons.
One, there were new found opportunities in this booming area which the Chinese state
and economy would help to facilitate.
And two, investing​ in areas where the Premier had shown an interest
in was a good way to show support for the leader.
But, at the end of 2016, restrictions were placed by the Chinese state on foreign investments
by Chinese companies, in part because of fears
of capital flight.
Only a handful of deals could take place and only those with the best connections.
As the Asia Times wrote: “ There was an undeniable pause as Beijing
seemed to be trying to separate the patriotic billionaires
who are eager to join Xi Jinping’s crusade from those who are perhaps more focused on
rapidly moving their billions past China’s capital
controls and into the murky washing machine that is
international football.”
Gao's movement in to sports real estate and prompting e-sports had been hugely successful,
building sports stadiums across China and even signing a deal with local government
to build a half a billion pound sports town in the West of
China.
But his purchase of Southampton FC got held up as the investment environment changed.
There was also the thorny issue of a corruption case from a decade before.
Although the payment of bribes had been widespread in China, Lander
was caught up in a sting to catch former Hangzhou vice mayor Xu Maiyong, who had skimmed more
than £25 million from real estate deals.
Gao denied involvement and the company allegedly
turned state's witness.
Xu and another vice mayor Jiang Renjie were executed in 2011.
This caught the eye of the Premier League which had been looking closer at the hard
to trace origins of wealth that had been flowing in the Premier
League from China and elsewhere.
There was a suspicion that the incident may have contravened
English football's Owners and Directors test.
The so called Fit and Proper Person's test.
But it is notoriously lax.
Whilst some within the the Premier League were allegedly very
uncomfortable with an owner who had been involved in something that looked unsavoury, the rules
state that a potential owner can only be disbarred if they are convicted of a criminal offence.
Gao wasn't and the sale went ahead, albeit as
a personal purchase by the Gao family, rather than through
Lander itself.
But some changes to the rules were made.
The Premier League agreed to change the rules of the Owners and Directors test, including
one that would disbar an individual or group if it
misled the Premier League during its investigations.
And also to include a rule that disbarred potential
owners if their actions would be considered a criminal
offence in the UK, even if they were not successfully prosecuted abroad.
The purchase of Southampton is perhaps the biggest English scalp of Xi's football revolution.
The changing regulatory winds in China show just
how globalised English football, and how economic polices made thousands of miles away can ultimately
effect your football club.
It may be the last Premier League club to bought by Chinese money.
Or Southampton could just be the tip of the iceberg.
Liebherr had no doubts about the new owners.
In a statement after the purchase she said: “Mr Jisheng Gao and his
daughter, Mrs Nelly Gao, with whom I have built a
close relationship, share our values and ambitions.”
Saints fans will see what that means when the transfer window opens on January 1st,
2018.