Red flags raised over Southampton’s ‘record’ deal with Chinese company

The clink of champagne glasses in the Southampton boardroom could almost be heard in China after the Premier League team this week announced “the biggest sponsorship deal in the club’s history”.

Chinese-owned Southampton said it was “delighted” at the agreement with LD Sports, though financial details were not disclosed of the deal that will see the firm’s logo emblazoned on the team shirts.

But the bubbles had barely settled in their glasses when questions began to emerge about the three-year tie-up with the hitherto unknown Chinese company, with one analyst warning that the deal was raising ‘red flags’.

Southampton called LD Sports “a brand-new sports content, marketing and entertainment platform”.

#SaintsFC is delighted to announce sports content, marketing and entertainment platform LD Sports as its new Main Club Sponsor on a three-year deal! 😇

— Southampton FC (@SouthamptonFC) May 13, 2019

But the club, based on England’s south coast, also said that LD Sports was not up and running yet and will “launch this summer for the Chinese market”.

A press release provided a link to www.ldsports.uk, but the site was also yet to launch.

“Our website is in progress…” the page says, urging readers to follow them on social media, but without providing links.

Adding to the sense of intrigue, a contact number on what appears to be LD Sports’ Chinese-language website goes through to an unrelated company called China Galaxy Securities.

The website, which contains incomplete and conflicting information, says LD Sports’ founder is Daniel Knox, who it says is a Chinese-American who studied in Britain.

Reclusive owner

It makes no mention of the Southampton deal and Knox — rather like the company — has scant online presence in English or Chinese.

It says the firm, which carries the same blue logo as the LD Sports now associated with Southampton, focuses on youth football training.

AFP emailed the company but received no reply.

There is no suggestion of wrongdoing, but some Southampton fans and those with knowledge of China’s sports business market are wary.

Southampton, rescued from relegation in the just-concluded season by their charismatic Austrian coach Ralph Hasenhuttl, did not reply to an AFP request regarding concerns about LD Sports.

But the Southampton-based Southern Daily Echo called the deal “a clear nod to Saints’ attempts to broaden their appeal in China under the ownership of Gao Jisheng”.

“The Daily Echo has been told LD Sports is not linked to Gao or Lander Sports,” said the newspaper.

Gao, founder of Lander Sports, whose myriad interests include building stadiums, keeps a low profile.

He and his family paid a reported £200 million ($256 million) to acquire an 80 percent stake in the club in 2017, Southampton becoming just the latest European football team to fall into Chinese hands.

Worry for fans

Gao is 65 and as well as a real-estate magnate “holds a National Grade II Basketball Referee title in China”, according to a Lander profile.

In contrast to the club’s celebratory announcement, some Southampton fans are alarmed about where the club is heading — and not just because LD Sports’ logo is the same blue as hated rivals Portsmouth.

In April, the Financial Times said that the Premier League was probing whether “the Chinese state has gained a significant stake in Southampton football club”. The club denied that.

Mark Dreyer, founder of the China Sports Insider website, says Saints fans ought to be worried.

“There are just so many red flags with this whole deal,” said Beijing-based Dreyer, citing Chinese investments in English football that have gone awry, such as Tony Xia’s ill-fated spell as owner of Aston Villa after he came out of nowhere to buy the club in 2016.

Two years later the money dried up and Villa found themselves in a perilous financial position.

“Typically when it comes to Chinese investment you’ve got to pay attention to the red flags,” said Dreyer.

“Nobody has heard of this company (LD Sports), nobody has heard of this guy supposedly behind it and there’s no information about how much money they’re supposed to be paying for this ‘record’ deal.

“Why on earth would Southampton fans have any confidence that this company is going to be around in three months, never mind three years?”