Saints Boost Off Field Revenues
Friday, 9th Oct 2015 10:24
Saints have shown big increases their off field revenues in 2014/15 as they try to compete with the big boys both on and of the field.
In the Cortese years when I pointed out that our commercial income was dropping like a stone, I was often mocked by some who told me there had never been a better time to be a Saints fan and told me they didn't care about advertising hoardings.
I could understand their attitude, most football supporters don't care about what happens on the field, all they use to judge how well a club is doing is the results on the field, thats fine, for most supporters it's a hobby away from reality, they don't want to study balance sheets only league tables.
But someone has to study those balance sheets and anyone who did could see that the financial stability of the club was reliant on one thing and one thing only and that was Katherina Liebherr putting her hand into her pocket.
Although many supporters described Cortese as a good businessman, that was purely based on the fact they considered him ruthless rather than any hard evidence of a well run cub financially.
Indeed he seemed to almost deliberately be making commercial decisions that were baffling, some were basic like cutting off season ticket sales two weeks before the season started, after all what business turns down money when offered, or putting in a car park ticket system that cost more than it could ever recoup and had the double whammy of putting off supporters buying tickets and merchandising.
Others were not as visible but more damaging, a complete alienation of the Southampton business community along with unrealistically high pricing saw advertising and corporate hospitality sales plummet, for those who do not think these are important, look at Spurs & Liverpool, two clubs trying to cling on to the coat tails of the top four, desperate to increase capacity and therefore the opportunity for increased revenues, when they build that extra capacity corporate hospitality will be a big part, its vital to any football club.
But our friend Cortese seemed to be doing the exact opposite of what is accepted as good practices at a football club,the turnover of staff was huge as experienced marketing directors came and went unable nay not allowed to do their job and resigning almost as soon as they arrived, to for the fans though this was masked by the success on the field.
One person involved in football club administration told me that in his opinion he thought that our former Chairman was running the football club down financially so that Katharina Liebherr would consider it too much of a drain on the family money and would sell it very cheaply, I wonder who would have put up a consortium to buy it ?
Thankfully Katherina Liebherr was made of sterner stuff, she got in people to examine the accounts of the club, when they were refused access she dug further and found out was going on and the rest as they say is history.
The good news though is that the new management team have got to grips with the situation, although the bad news is that it will take time.
St Mary's Football Group has reported revenues of £113.7m for the year ended 30 June 2015, up from £106.1m a year earlier.
The Club said that a.
" significant part" of that growth came from commercial revenues of £10.1m, a 21.3 per cent increase on last year's figure.
This is good news but shows that the club have a long way to go yet before they get up to the level that they really should be for a club of the size that it is.
In season 13/14 when our commercial income was 8.3 m, Crystal Palace had 11m & Stoke 14m, that probably tells us what our minimum target should be, but if we look at what the clubs we are looking to eclipse on the field earn then we have a long way to go, West Ham had £20m and their move to the Olympic Stadium will increase that, Tottenham 42m and Liverpool £104m ( Yes I know we can counterbalance that by the £45m we had off them that year).
So now we are starting to increase our revenue it is only a start, a 21.3% increase is good in percentage growth, but it doesn't factor in the years of neglect that had gone before in building up corporate relationships and bringing in the money.
The current sponsorship was sold at a pittance and that won't happen again, the next job is to fill the empty corporate boxes at most games, this is a priority, we must be the only club in the Premier who do not sell out match day hospitality and I see League 1 clubs with more hospitality boxes filled than ours, this can be initially blamed on the Cortese factor when these were drastically over priced, but not this season, something has not been got right here.
But overall we are moving forward and that is good, good football clubs have solid foundations and that means having good relationships with national & local companies who will pump in money in advertising, sponsorship and corporate hospitality, it is an economic cycle that if got right will keep expanding, the extra income might not sound much, but it is vital, if we get enough in it will help fund an expansion to the stadium, if that happens and we can bring in increased commercial revenue by extra corporate income and from bigger crowds and merchandising etc then it all starts to increase rapidly, certainly we should be aiming at the £31 m Villa brought in in 13/14 season on an average crowd not that much bigger than ours, that was done by getting it right off the pitch even when it was going wrong off it.
Last word to the club's Chief executive Gareth Rogers who said.
"These latest financial results offer a clear indication of the group's sound underlying business operations, supplemented by recent player trading,"
"As planned, the surplus generated through player trading has been reinvested into the playing squad through transfer fees, additional wages to new and existing players and respective deal costs.
"The group's future debt position, whilst higher than management would prefer to be carrying, was forecast and in order to further promote financial sustainability, the group has robust plans in place targeting an on-going reduction in the debt over the medium and long term."
He added: "The future looks positive thanks to the strong financial governance that is now in place, yet the management are well aware of the balance that must be struck between on-going sustainability and investment to achieve sporting success."
Photo: Action Images
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