SWR: Chapter 696/697

Chapter 696 Saints and White Roses

With a swish, Gao Shen pulled open the floor-to-ceiling curtains of the bedroom, only to find that the world outside had turned into a vast expanse of white.

It was snowing in Manchester!

It was warm inside, so he didn't feel anything unusual.

But outside, snow mixed with rain was falling, and it looked bitterly cold.

As a child who grew up in the south, Gao Shen had a special fondness for snow.

He still remembered when he first went to school in the north and saw snow for the first time. He immediately ran to find Su Qing. The two southerners stood in the snow, watching it fall for most of the day, and didn't feel bored at all.

Thinking of Su Qing, Gao Shen made a video call to her to show her the snowy scene in Manchester.

They chatted for over half an hour and agreed that Su Qing would come to Europe to accompany him during the Spring Festival holiday.

By the way, they also talked about Gao Shen buying a football club.

After washing up, Gao Shen went downstairs. The nanny had already prepared breakfast for him.

While he was eating, the doorbell rang. It was Fernando Lucas.

He had driven straight to Gao Shen's house, carrying a heavy box of documents as he rushed in, complaining non-stop about the cold. When he saw Gao Shen still in his home clothes leisurely eating breakfast, he immediately felt it was unfair.

"Honestly, you're such an unscrupulous boss!" Lucas complained.

"I work so hard on regular days, and now it's finally Christmas, but I still don't get to rest. Working for you is a 365-days-a-year, 24-hours-a-day gig. It's killing me!"

Gao Shen figured he probably hadn't eaten yet, so he asked the nanny to prepare something for him too, ignoring his complaints.

After breakfast, Gao Shen told Lucas to carry the box of documents into the study with him.

…

Ever since Gao Shen first shared his intention to buy a football club with Lucas more than two months ago, Lucas had been gathering information and materials through various channels in his spare time.

The main targets were teams in the Championship and League One.

Those were considered low-level leagues, and it would take a long time to earn promotion to the Premier League. Most investors didn't have the patience for that.

Gao Shen couldn't afford to buy a Premier League club. His financial resources were limited.

Over the past two months, he had met with Lucas multiple times to discuss the matter. Both of them had coincidentally set their sights on teams from the lower end of the Championship and the top of League One.

As a result, teams like Notts County, Charlton, and Brentford were basically ruled out.

As for top Championship clubs like Queens Park Rangers, Cardiff, Norwich, Swansea, and others, there was no point even considering them. Each of those clubs was worth a fortune.

Of course, a high valuation didn't always mean a high selling price.

For example, many clubs in the Championship were heavily in debt. Their selling prices might be low, but once acquired, Gao Shen would have to take on all their debts. That would be another massive burden. It wasn't worth it.

His total acquisition budget was 50 million euros, which also had to cover future investments and daily operations after the purchase.

Gao Shen could take out a bank loan to help fund the acquisition, but the risks were too high.

Among the materials Lucas had submitted, Gao Shen saw many familiar club names.

For instance, Middlesbrough, but that club's owner was also quite wealthy.

Then there was Watford, whose owner was the same as Serie A's Udinese and La Liga's Granada — the Italian Pozzo family. They operated their teams through acquisitions like this, and players were transferred between the clubs frequently.

When selecting a team, the city it was based in was actually quite important.

For example, Nottingham Forest was a decent club. It had won the Champions League twice and had a rich history. But its current owner, Nigel Doughty, was the chairman and founder of a European private equity firm. He bought Nottingham Forest in 1999 for 11 million pounds.

According to the information Lucas had gathered, Doughty had invested at least 100 million pounds into Nottingham Forest over the years.

In that case, what kind of offer could Gao Shen make that would be enough to convince Doughty to sell?

Then there was Derby County. The price wasn't high, but the city of Derby only had a population of about 200,000, while the stadium could hold over 30,000 people.

What did that mean?

It meant that for every six people in the entire city, one would have to attend the match just to fill the stadium. And ticket prices were already quite cheap, so you could imagine how hard it would be.

If home attendance wasn't strong, match-day revenue would drop significantly, which meant higher operating costs for Gao Shen.

At this early stage, commercial revenue and broadcasting rights were essentially non-existent. Broadcasting income would only come after reaching the Premier League, and commercial revenue wouldn't be realistic until the club gained fame.

In other words, the most reliable income source now was match-day revenue.

The lower the match-day revenue, the more operating costs Gao Shen would have to pay.

In simple terms, the more money he'd have to put in.

Match-day revenue depended heavily on stadium attendance, which was directly related to the city's population.

For clubs like Nottingham Forest and Brighton, their owners were both local fans with strong financial backing, so there was no point in considering them.

And for teams like Portsmouth and Leicester City, which had already been acquired by foreign investors, Gao Shen didn't even need to think about them.

…

"I did some preliminary filtering, and I think there are a few teams worth considering."

"Leeds United, Sheffield United, and Southampton are decent options."

Gao Shen was flipping through Lucas's documents while listening to his analysis.

"Let's go over them one by one."

Lucas pointed to a file in Gao Shen's hand. "Leeds United — I don't need to say much, you must be familiar with the team. The current owner is Ken Bates, the former owner of Chelsea. After selling Chelsea to Abramovich, he bought Leeds United."

"But it's been six years now, and the club hasn't improved under his management. In fact, things have only gotten worse. Right now, Leeds United's asking price won't be high. I personally think it's not worth it if the price exceeds 25 million euros."

"So cheap?" Gao Shen looked up at Lucas, wondering if he had heard wrong.

"Cheap?" Lucas laughed and shook his head. "I asked some friends in the City of London. Bates has already mortgaged everything at Leeds United that could be mortgaged and sold everything that could be sold. Right now, Leeds is just an empty shell. They don't even own their stadium or training ground. Their youth academy? Forget it. Sometimes their reserve team can't even fill an 18-man matchday squad."

Gao Shen frowned.

That was outrageous.

"So how does Leeds United even function now?" he asked, genuinely amused.

"They rent. Elland Road is rented, and so is the training ground. Youth development? Have you heard of any decent young players coming out of Leeds recently?"

Gao Shen was at a loss for words.

"And you're still saying Leeds is worth considering?"

"Because it's cheap, and their home attendance is excellent. Leeds has a population of 700,000. The surrounding area, within 20 to 30 kilometers, has several large cities that are practically linked together, with a combined population of over 2 million. The local economy has developed rapidly in recent years. Among all the football clubs nearby, Leeds United is the most prominent, with the best fan base and home attendance."

Gao Shen nodded thoughtfully. Leeds United did have a solid foundation.

But everything else was a disaster.

"Let's move on to Sheffield United. This is another club from a large city with a metro area population over 1.5 million. But the team's in trouble and could be relegated from the Championship this season. The owner, Kevin McCabe, reportedly doesn't have the money to invest anymore."

"Oh right, he also invested in a football club in China a while back, but lost a lot of money."

Gao Shen remembered that.

He had paid close attention to the news at the time. Kevin McCabe was said to be a real estate tycoon in the UK, but the 2008 subprime mortgage crisis and the financial crisis afterward had drastically reduced his assets, and he'd been struggling since.

But the guy wasn't easy to deal with.

Later, a Saudi investor wanted to take over Sheffield United, and McCabe transferred part of his shares for just one pound in exchange for a 10 million pound investment into the club. At that time, the team was in League One. Nobody knows what happened after that, but the two sides ended up having a huge falling out.

Gao Shen couldn't remember the exact details, but he knew McCabe wasn't someone easy to work with. In fact, he was a real piece of work.

"Forget Sheffield United. I know McCabe. We can't work with him."

Lucas was stunned. He had only done background checks and hadn't looked too deeply into this.

But since Gao Shen said so, that was enough.

"Then there's Southampton. The Saints were bought in 2009 by Swiss billionaire Markus Liebherr for 14 million pounds. He was very optimistic about the club. The first thing he did after acquiring it was to invest heavily into rebuilding the training ground and improving youth development."

"But the good times didn't last. Liebherr died of a sudden heart attack this year. His daughter took over, but she has no interest in managing a Premier League club. According to sources in the City of London, she plans to sell, but the asking price will be much higher than in 2009. The Saints are currently favorites for promotion from League One."

Brighton are actually the favorites for the League One title this season, and their owner is also a wealthy backer.

Gao Shen remembered clearly that Southampton would soon return to the Premier League in the next two or three years and quickly make waves there.

Right now, in the Championship and League One, all the decent clubs had long been snatched up by foreign investors and local tycoons.

What remained were the leftovers, each with its own issues. Some were priced unreasonably high.

If Gao Shen followed Lucas's earlier filtering and ruled out Sheffield United, the only two realistic options were Leeds United and Southampton.

Both had their own issues. From the current situation, Southampton was about to earn promotion. With a newly renovated training ground and a complete youth system, the Liebherr family's asking price could easily exceed 40 or even 50 million euros.

As for Leeds United, the problems were equally glaring. The stadium and training ground were rented, and the youth academy was in shambles. It was laughable.

Who should he choose?

Gao Shen had a headache.

(To be continued.)

Chapter 697 Can You Afford It?

Gao Shen and Lucas stayed in the study, going over everything for the entire day.

Starting with teams from the Championship and League One, they gradually narrowed their focus down to the White Roses, Leeds United, and the Saints, Southampton.

Both teams had their own advantages.

The main reason Leeds United was cheap was that they didn't own their stadium or training ground, and had to rent them. Their youth academy had been abandoned and would require reinvestment. It also seemed that Leeds United lacked ambition, making it hard for them to push into the Premier League.

Over the years, Ken Bates had gradually taken full ownership of Leeds United and was now simply waiting for an offer.

Of course, unless Leeds United could get promoted to the Premier League, he couldn't expect to sell it at a high price.

But to get to the Premier League, significant investment was needed, and Bates no longer had the means to do so.

It had become a dead end.

Leeds United's main advantage lay in its large fan base. Home attendance was very high. Elland Road, with a capacity of over 30,000, was almost always full, which was rare in the Championship.

But because the stadium and training ground weren't owned by the club, they had to pay a high annual rental fee.

According to information Lucas got from banks in the City of London that specialized in football transactions, the annual rent was close to three million pounds.

What was interesting was that Elland Road, over a hundred years old, had been renovated many times, but the facilities were very outdated. The training ground was located far away, in a small town northeast of Leeds, and wasn't worth much on its own.

The East Stand at Elland Road had been expanded, but plans for the West Stand went bankrupt before construction even started. There had been space reserved for its expansion, and just west of it was Leeds United's former training ground, Fullerton Park, which was now abandoned.

According to the information Lucas collected, the combined price for Fullerton Park, Elland Road, and the current temporary training base was 20 million pounds. Ownership now rested with a private company in Leeds, but it served little purpose other than collecting rent each year.

In other words, if Gao Shen bought Leeds United, he would still need to spend another 20 million pounds to buy the stadium, training ground, and the wasteland that used to be Fullerton Park. Only then could he save the three million pounds in annual rent.

All Gao Shen could say was: damn it!

Bates and the former Leeds United management had really done a number on the club. They had sold off everything they could. They'd truly stripped it bare.

If you actually calculated everything, Leeds United's total acquisition price would still fall within Gao Shen's expectations.

…

The situation at Southampton was similar.

At present, the Liebherr family was waiting for a good offer. They had done a solid job managing Southampton. The team had performed well in League One and stood a good chance of being promoted to the Championship.

According to the Liebherr family's mindset, they were likely hoping to make a good profit upon promotion. But it was also possible they were betting on getting to the Premier League, since the value difference between a Championship club and a Premier League one was enormous.

Even if they only made it to the Premier League for a single season, they could receive a large amount of funding through the parachute payments program.

Lucas initially estimated that acquiring Southampton would require at least 40 to 50 million.

But the Saints had clear advantages. The team had a strong starting lineup and solid depth. In addition, they had a complete youth development system, and both the stadium and training facilities were owned by the club.

Of course, there were downsides too. For one, negotiations would be difficult, as the Liebherr family would definitely demand a high price. Also, Southampton's population wasn't as large as Leeds', and the size of its fan base was not as strong.

Lucas also mentioned that the UK was currently bidding to host the 2018 World Cup. Leeds was one of the candidate host cities, and Elland Road was included in the renovation plan, which showed the city's importance.

But Gao Shen told Lucas that England's bid was unlikely to succeed.

The reason was simple: two FA chairmen had already gotten involved in the issue.

Yes, Gao Shen's old friend David Bernstein was now stepping in.

All in all, both clubs had their strengths and weaknesses, and Gao Shen didn't have a clear choice for the moment.

However, since these two had made the shortlist, Gao Shen instructed Lucas to continue digging for more detailed information on both. If possible, he even wanted to visit them in person.

To be honest, even after living in the UK for a year and a half, Gao Shen had never been to Leeds or Southampton.

Especially Leeds, which was only a little over 60 kilometers from Manchester—he had never even been there.

…

After the lunch break, Gao Shen gave Lucas a few more instructions before sending him off.

Tomorrow was Christmas. It was time to spend the holiday with family.

As the workday ended, Gao Shen called Su Qing to talk to her about the matter.

Su Qing only listened to Gao Shen's summary and felt that both clubs had their own pros and cons. They would need to visit both sites and make contact before making a final decision.

Even if Gao Shen wanted to buy, the other side still had to be willing to sell.

"I've already moved all my holidays to around the Spring Festival. I'll go with you then," Su Qing said.

Gao Shen nodded.

If he really wanted to buy, he needed to act fast.

Time was valuable. Once the decision was made, it would be best to close the deal before the transfer window. Only then could he operate in the market, strengthen the team's competitiveness quickly, and aim for promotion to the Premier League as soon as possible.

If they missed the window, it would mean wasting another season.

That might not be a big deal to other wealthy owners, but to Gao Shen, it was a lot of money.

In the Championship and League One, most of the money spent was high-risk.

After hanging up with Su Qing, Gao Shen thought for a moment and called David Bernstein.

If he wanted to buy a club, he needed approval from the EFL and the FA.

The EFL was responsible for leagues outside the Premier League and essentially managed under the FA. There would definitely be contact later on.

So Gao Shen had to test the waters with Bernstein in advance.

It was almost Christmas, but Bernstein was still busy.

He was preparing to run for FA president.

Bernstein was thrilled to receive Gao Shen's call, not because Gao Shen was Manchester City's head coach, but because Gao Shen had previously provided key advice for England's youth training reform, which had helped Bernstein immensely.

Of course, Bernstein had also helped a lot with Fernandinho's work permit.

When he heard that Gao Shen was planning to buy a lower-league club, Bernstein's first reaction was disbelief.

"Are you crazy?" Bernstein blurted out. "Does coaching really make that much money? Even if your annual salary after tax is over ten million, you still can't afford to buy a club. Can you really afford it?"

Gao Shen wasn't offended. Bernstein was just being honest.

Nowadays, few people would speak that bluntly.

"What money do I have? Isn't it all from my fiancée?" Gao Shen joked with a laugh.

Generally speaking, Su Qing was portrayed as a rich second-generation with a family in the mining industry. She wanted to invest overseas and enter an industry Gao Shen was familiar with, so this idea came up.

But Gao Shen also explained that her family wasn't incredibly wealthy, and their assets were all back in China. So they could only go so far.

"What I'm most worried about is whether this will affect my work at Manchester City," Gao Shen asked seriously.

If it did, he would have to reconsider.

"That kind of situation hasn't happened in England before. We'll have to look into it, but nothing's confirmed yet, so I can't give a definite answer," Bernstein replied.

Gao Shen understood. He couldn't just show up at the FA and say, "I want to buy a club. Is that okay?" That would definitely make headlines.

"All I can say is, based on the current situation, as long as it's a lower-league club, it shouldn't be a big issue. I can handle it. But if it gets promoted to the Premier League… you know, the Premier League isn't under the FA's jurisdiction. That would be trickier."

The Premier League operated independently. The FA only oversaw cup competitions and the lower leagues.

Gao Shen understood what Bernstein meant.

Even that much was already more than he had hoped for.

"To be honest, running a football club is probably not as profitable as coaching," Bernstein advised again. "If your current salary were in the Premier League, you'd be earning more than most clubs."

Most clubs lost money.

Gao Shen was aware. But there were always exceptions.

And this was a golden opportunity. It would be a shame to miss it.

Although that was what he thought, Gao Shen expressed gratitude on the call, saying he would carefully consider it and persuade his fiancée and family not to make a reckless investment and get into trouble.

As the conversation continued, the topic shifted to the upcoming FA presidential election and Bernstein's youth training reform plan, including the construction of St. George's Park.

It was a massive project.

Gao Shen suggested that Bernstein take inspiration from Clairefontaine in France and Germany.

Regarding youth development reform, Gao Shen believed that focusing on technical training would be the long-term trend.

In recent years, this trend had become more and more obvious. Players' technical skills and passing ability were increasingly important. This would definitely be the direction of reform in English youth training.

Over the past year or so, under Gao Shen's guidance, Manchester City's reforms had been progressing smoothly.

Technical coach Borrell served as the youth academy's technical consultant. Manchester City was also willing to invest heavily to scout top youth players from across Europe. The academy was now full of promising talent.

Bernstein said he was considering bringing a team from the FA to visit and study Manchester City's youth system.

Gao Shen of course agreed and said he would fully support it.

To be honest, he and Bernstein were friends, but friendship could be valuable or worthless. Frequent exchanges of benefits were more reliable.

If Bernstein could offer Gao Shen some help, then naturally Gao Shen should give Bernstein what he needed.

Through this kind of mutual support, their friendship could grow and their cooperation would last longer.

If Gao Shen really acquired a club in the future, there would be many more opportunities to work with the FA.

(To be continued.)