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DaGrosa Deal For Southampton Could Still Be On - If Asking Price Is Lowered.
Tuesday, 9th Feb 2021 21:31

American Business man Joe DaGrosa was touted to buy Saints late last year, but the deal then went quiet, now comes news that it could still happen, but the asking price has to come down, but could Saints end up in the same situation that Burnley find themselves in.

DaGrosa is formerly the owner of French Ligue 1 club Bordeaux and was linked with a bid for Newcastle United in 2019.

It was widely reported last year that the American had entered into a period of exclusive talks with Gao over a potential sale, but that period came and went without any deal being struck.

Now it seems that the talks have still been ongoing and DaGrosa is using the media to try and force Saints owner Gao's hand and get the asking price lowered.

Gao has been the subject of some abuse on social media, whilst he hasn't been the owner we had all hoped he would become, it has not entirely been is fault with investment into Western Sport being blocked a couple of years ago meaning he was unable to put his plans into place for the club.

It was reported that he was willing to sell for around £210 million for his 80% stake.

Now sports media outlet the Athletic has quoted DaGrosa on the possibility of the deal still happening.

Speaking to The Athletic, DaGrosa said:

"Southampton are a good club but there are many other good clubs in the league.

“COVID-19 has created a very fluid situation with regards to the financial performance of all clubs. We have to take that into consideration as we contemplate transactions – we pride ourselves on being very disciplined investors.

“Southampton’s management team has done an excellent job, during a very challenging period, in getting a successful refinancing done last summer. Having said that, particularly in this environment, sellers need to have a reasonable expectation of value and it has to be consistent with our view.

“We are open to opportunities that make financial sense. As we evaluate clubs, we are of course looking at not only the price that needs to be paid but capital that needs to be invested subsequently for the deal to make sense.”

The report goes on to say DaGrosa could switch his focus instead to fellow Premier League clubs Crystal Palace, Newcastle or West Ham.

Discussing his desire to invest in the Premier League, DaGrosa said:

"The Premier League is the largest and safest league in Europe. It’s the largest because of its broadcast income and that makes it the safest, too.

“We looked into other markets but decided the EPL was the best market for us. It’s easier to be a medium-sized fish in a big pond than a big fish in a medium-sized pond."

This seems to be an attempt by the American to put the pressure on Gao to drop his asking price, of course many Saints fans will be in uproar that Gao should demand £210 million, but in fairness it is not much different to the price he paid for the club 3 years or so ago.

Yes the situation in football is one of financial turmoil at the moment and although the Gao out brigade that has recently emerged seem to think that it is easy to just sell up and move on, the reality is far from that.

Burnley were recently sold to an American concern for a similar price for an 84% in the Lancashire club, but the truth is Saints are a far more substantial package than the Clarets with a larger ground and infrastructure and with a supporter base far far bigger than Burnley who have a far smaller catchment area and one that is filled not only by the Manchester clubs, but a number of other teams such as Blackburn, Bolton & others in an area that is very territorial.

It should also be noted that around Turf Moor the air is still clearing over the £170m US takeover which has used the club’s own money and loaded it with debt.

Call Gao what you want but at least he didn't do that.

So not only should we be very wary of any potential owners, we should also recognise that although we would prefer Gao to sell the club quickly, he will want to at least recoup a major part of his outlay and that although not good for the sale, is fair to Gao who although not investing the £100 million that some think he should have, has done us no wrong, the fact that we are well run as a club through necessity has made us a good prospect.

The financial implications of Covid 19 has also made us a good target for a buyer to try and get us on the cheap, but surely we are worth a lot more than Burnley who have far less assets and when sold were far from certain of being in the Premier League next season.

Although Saints survival is not yet guaranteed, it will take a total collapse to see relegation happen and that being the case, there is a Premium for being able to buy a club who have safety and therefore planning can be made in the short term

So on one hand it is good news that a potential buyer is out there, but it is bad news that it seems they are wanting to haggle about the price, if their intentions are honourable and they have the money to invest then the odd £10 million is a not a lot of money.

Things will all come out, but at this time it does seem that Gao is asking a fair price, yes there is room for manoeuvre as in all deals, but deals are only done when it is good for both parties.

Photo: Action Images

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DorsetIan added 22:22 - Feb 9
These people, with millions to spend, have got millions to spend because they are as hard-nosed as f*ck. The odd £10 million might not be a lot to you Nick, but these types do not pay over the odds for anything, and whether or not their intentions are honourable.

They will know Gao's position, they will know what they think the club is worth and they will know how much they think they need to pay to make a profit on their investment.

And £10 million over the odds paid to Jinsheng 'done us no wrong' Gao, is £10 million less than can be invested in the club.

If Gao wants people to throw money at him, he should move into PPE contracts and contact the UK government.

ElijahK added 22:33 - Feb 9
I mean I don’t really care who’s in charge as long as they do a decent job! As in the end I don’t expect us to get some billionaire who buys us the likes of Mbappe, Kane, Sancho etc. But I would expect an owner to be able to fund us to keep our best player, or if we can’t let us use that money to buy a replacement. I mean examples are the likes of Everton or West Ham and what they’ve done recently. As in the end if we’d of spend that money we got from Mane, Van Dick and Liellana on replacements who knows where we could’ve gotten to!

SonicBoom added 23:44 - Feb 9
This guy fronts investors. They are not the dream sugar daddy everyone wants and they won't pile in cash. They'll expect a return on their investment.
Didn't Alex Crook say over the weekend that there are other interested parties now able to talk to the club now that the exclusivity period has ended?
Id do that, rather than pin our hopes on this character.

Boris1977 added 08:30 - Feb 10
If the premier League test regarding fit and proper owners was fit for purpose speculation over any potential new owner wouldn't be so crucial. As it is most clubs are making ownership appointments based on little more than big talk and rhetoric.

I read about the Burnley deal over the weekend and I agree Nick saints want to avoid that situation. Man u and liverpool maybe able to get away with owners leveraging the club to raise funds to buy them but they rely on champions League income and massive overseas 'support' to cover this financial risk. Saints and many other clubs cannot hope to carry this level of imposed debt without the inevitable financial collapse sooner or later.

SanMarco added 08:37 - Feb 10
We do not need a Glazier style reverse-takeover. This guy would use the club to pay back the interest/fees etc incurred in the purchase and then own our assets to do what he wants with.

Chinese ownership is a problem - the money is deemed 'dirty' due to nasty/authoritarian regime whereas all the other dity money in football is deemed okay. Football needs to be purged of ALL crooked money. Would level the playing field a little bit but, of course, won't happen.

The problem is that, unless we get a Saints loving multi-billionaire, any prospective owner is likely to be a shark from 21st century financial capitalism. Better than the Chinese? Gao's 'break-even' strategy is being torn apart by Covid so who knows.

underweststand added 09:09 - Feb 10
At least Mr. Gao said from Day 1 that he wanted Saints to be self-sustaining, but Covid has changed a lot - including player valuations and zero income form empty stadia.
Da Grosa --or anyone else, know that many business are vulnerable and the previous higher asking price is no longer viable, and so if Mr. Gao wants to cut his losses and get some cash in, he needs to decide now as the future is going to be a difficult decision.

New investors - of whatever ilk - will want to see a profit on their investment and one might assume that those millions that are "saved" from achieving a lower buying price might be re-invested in the club, through new player buys etc.

Even though many of the previous crop of buy-ins were a disaster ; (Hoedt, Elyounoussi, Lemina, Boufal and Carrillo), at least Saints didn't bankrupt themselves on huge fees and our highest buy-in is still only around £20 million. Some of those "lesser" Prem. clubs who are trying to compete with "the big boys" have overstretched themselves financially.

SaintPaulVW added 10:19 - Feb 10
We have been fairly lucky with owners. Avoided the parasites, the totally incompetent, the uncommited dreamers and also the actively malevolent.

I suspect our next owners will probably be just investors, like Gao, with no links or prior interest in the club but looking for a steady return from owning a club in the league with the highest TV money in the world.

As has been said above, this may be no better than what we have now.

Gao hasn't invested more money in but equally he hasn't stripped the company of money or borrowed excessively. Another one of those again will do me just fine.

I would prefer some model of fan ownership but realistically that only comes when a club crashes and burns. Not sure I want to go through that again.

As for values. It will be what the buyer and seller agree. It is quite usual for companies to finance their own takeover. The aim is for the new owners to make extra profit to pay off the purchase price or at least service the interest cost on it. Not sure I like that model in football clubs where the turnover crashes if you get relegated.

This is all out of our hands anyway so just got to cross our fingers and hope for the best!


highfield49 added 11:05 - Feb 10
Compared to some of the "very disciplined investors" seeking business opportunities Mr Gao appears to be a very honourable and trustworthy co-owner at present.

Dellwizard added 21:24 - Feb 10
I read a week or so ago that DaGrosa couldn't raise the funds needed to buy Saints. So this deal was dead in the water.
I would be worried if potential new investors have to try and raise capitol to buy us, as this would mean no extra funding to buy players.
Ring any bells ?

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