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Saints Declare A Profit
Friday, 23rd Mar 2018 09:41

St Mary’s Football Group Limited, incorporating Southampton Football Club Limited, has published its audited annual results for the year ending 30th June 2017.

Saints have issued their financial statements showing a healthy profit for the year 2016/17 and before we start this would not include money received for Virgil Van Dijk or Jay Rodriguez a total of around £87 million, nor the £60 million outlay for Bednarek, Lemina, Hoedt and Carrillo.

The Statement read.

Turnover improved significantly once more, to a record £182.3m (2016: £124.3m), with commercial and matchday turnover both showing positive increases, to a combined £37.9m (2016: £31.3m).

Overall, the group achieved profit for the year, after taxation, of £34.1m (2016: £4.9m), while net assets increased to £79.1m (2016: £45.0m), and net debt decreased from £38.9m in 2016 to net cash of £2.9m in 2017.

The club’s position was helped by the 2016/17 season being the first of the new Premier League television rights deal, with the club also having three more live games than in the previous campaign.

Additionally, participation in the group stages of the UEFA Europa League and the team’s run to the EFL Cup final helped drive an increase in turnover.

Elsewhere, new sponsorship agreements, notably with Under Armour and Virgin Media, contributed to a 27 per cent increase in commercial turnover.

The group’s strategy has continued to be to strengthen the first-team playing squad in order to compete in multiple competitions, while simultaneously strengthening the overall operation of the club.

Significant investment has continued to be made in recruiting players and strengthening contracts, with the average length of a first-team squad player deal standing at 38 months in 2017 compared to 35 months in 2016, while intangible fixed assets have increased from £84.9m to £97.3m as a result of this.

Encouragingly, the group has, at the same time, been able to improve its wages-to-turnover ratio from 68 per cent in 2016 to 62 per cent in 2017, despite player remuneration growing by 29 per cent (£67.2m in 2016, to £86.6m in 2017).

The number of players with international recognition at senior or under-21 level increased from 23 to 26, while 17 players represented their country at youth level in 2016/17, compared to 12 during 2015/16.

The club’s Academy talent pool continues to grow and strengthen, with an average of 29 players on scholarship agreements in 2016/17, compared to 20 the season before, while ten graduates represented the first-team in the 2016/17 campaign.

Toby Steele, Managing Director, commented:

“We are pleased with the group’s performance in the year, which underlines the club’s financial growth and stability.

“While the record revenues are largely driven by new broadcasting deals, it is encouraging to once again see improvement in our commercial and matchday revenues, which are important for us to grow in order to strengthen our competitiveness on the pitch.

“We have again invested heavily in the first-team, and have continued to do so in the period beyond these results, while doing likewise in our Academy and our staff, to ensure that we remain well-positioned for the future.

“The performance of the team always remains our ultimate focus, and through continuing to strengthen our financial position we give ourselves the best opportunity of driving improvement on the pitch.”

Sceptics in the Saints support will see this as a bad thing, already some have mentioned Virgil Van Dijk etc on social media although it is clear that he and others do not fall into the financial year these accounts relate to.

As the accounts reveal the main reason for the increases are down to increased revenues, not only from the Premier League, but also spnsorship deals with Virgin Media and Under Armour, these alone wpuld account for around a quarter of that £34 million, a large chunk of money we were not receiving under previous kit and shirt sponsorship deals.

Whilst we are in a relegation fight it will be hard for Saints to justify these figures to a section of the support who will always feel that we should be a not for profit organisation and that every penny should be reinvested back into the playing squad, but that is a simplistic view as is the one that we are merely being fattened up for the new owner to asset strip, it should be remembered that all of these financial and sponsorship initiatives were being put into place before Gao came on the scene.

Back in the summer of 2016 when these accounts started the view was that we were a well run club.

Football clubs have to have a strategy both on the pitch in buying and selling players as well as off it in generating revenue to put towards not only the transfer budget but the overall strength of the club in all areas and these figures show that although the playing side of things was questionable in this season, off the field we were well run.

Many this season have complained that Ralph Krueger is a poor Chairman and bringing the club down, these accounts do not support that fact, they show a football club that is being well run financially and goes from strength to strength, back in the summer of 2014 we had little commercial income and the only way to move forward was to sell sell sell, we did that and did it well and off the field at least have continued to be well run.

The only real issue at the club is on the playing side of things at present, last season the year in which these accounts relate was not great in terms of entertainment, however from a statistical point of view it looks good, 8th and a Wembley Cup final.

From that point of view Les Reed did a good job, the apointment of Puel was not inspired but getting in a good manager is not easy as over half the Premier League show each season by sacking their managers and in some cases doing so twice in a season.

Reed does need to be called into question for not only appointing Pellegrino but standing by him when it was clear change, any change had to be made, but that judgement has to be made at the end of the season and not now.

What these accounts show though is a club well run on the non playing side and as i say we need that strength to be able to go forward, you would hope that this season turns out fine after all, that we can stay up and dare to say it play in and win the FA Cup Final, if we do then we are well placed to improve the playing squad next year and kick on, if we do go down then we are also well placed to mount a challenge to go straight back up.

At times I have been called into question when I have refused to take the knee jerk view that because the team is failing on the pitch then it is failing off it and that Ralph Krueger is somehow failing in his job because a player or two are failing on the pitch, yes there are still many questions still to be asked at the end of the season and of course there have to be doubts about what Gao's intentions are in the long run, but they are seperate questions than those answered by these set of accounts.

I am no lover of the modern game, in many senses I remain a purist and hanker for a return to the days when football clubs were not money making machines and everything was simple, but I am not naive, the Premier League is what it is, we all want our football club's to be challenging at the highest level possible, if we want that then we need to see money being generated and not thrown out of the window year in year out, the alternative is to play in the Championship or below, where money is not an issue, big revenues do not need to be generated and you can play at 3pm on a Saturday every weekend.

This is one bit of good news for Saints fans, we now need some good news on the pitch in the next six weeks or so and then we can put this season behind us and move forward again.

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Sanguin added 09:55 - Mar 23
This is positive. Poorly run clubs fall hard. Look at Leeds, Portsmouth, Luton, Scarborough and even Southampton before Liebherr saved us. Yes, I want to see new signings and investment in key areas of the squad, but I have a lot of faith in the behind-the-scenes management of the club and these figures back up that faith.

JGH added 10:00 - Mar 23
Bang on Nick.

We have a very well run club who have made a few errors in footballing recruitment over the past 18 months or so. That doesn't make it rotten to the core. The new owners hands off approach is a reflection of this, they have no need to jump in and sort out a mess that isn't there.

skiptonsaint added 10:17 - Mar 23
Dont have a problem with the club making money and they must of known these results were coming.

However as a business they took a risk starting the season with an inexperienced manager , a proven CB short , an injury prone striker Austin, Gabbi who hadn’t scored for a long run the end of the season and was struggling with our playing system and Long who at best is a 3 goal a year impact sub. We knew we could cash in on VVD so investing 20m day in the squad would of seemed sensible with everyone else around us spending and strengthening

Was this risk taken to maximise Kats payout in retrospect ? Maybe and now a perfect storm has come in and we are where we are

I just hope if we go down the strength of these figures would allow us a decent push for at least 2 season before we had to majorly trim back the squad.

Whiteknight added 10:40 - Mar 23
A couple of things to mention:

1) These accounts include one off revenue from reaching the Europa League group stages and EFL final. The first of these will not re-occur in 2017/18 and the second will be replaced by the FA Cup semis (and hopefully final) but cannot be assumed for future seasons;
2) These two one offs are a direct result of on-pitch achievements - nothing to do with Krueger;
3) The biggest pot is TV rights - these are at jeopardy if we get relegated and stay down;
4) How much of the commercial revenue is due to Krueger?
5) These financial results have NOTHING to do with the new owners.

Whilst I agree that the results are positive, they have to be taken in context and are historical - they do not predict the future and our footballing position is now worse than it was at June 2017.

Finally, I support Southampton as a football club, not as a limited company. As an accountant, I like to see a good profit but I also like to see where the profit is reinvested and I like to see that profit being sustainable - these are still open questions.

helpineedsomebody added 11:13 - Mar 23




SaintNick added 12:00 - Mar 23
White Knight

1, This revenue is limited we got less than £3 million from Europa League prize money and only £50 k as runners up in the EFL Cup

2. Krueger is responsible for overseeing the entire club, he has to take some credit, without his revamping and putting in the right people we would not have the infrastructure.

3. Yes the biggest pot is TV rights, but the difference between us and United is commercial revenue, we will never match theirs but we can get more than Swansea and palace et al and put ourselves in a better position.

4. You could say all of it, he oversaw the revamp of the club, when he came in we had £5 million in commercial income, now it is much much more, he has to make the right decisions and put the right people in place to run each department day by day, he should get credit for what he has done.

5. No one has claimed that the new owners have anything to do with these figures, why bring it up

saintjf added 12:37 - Mar 23
The real difficulty with this is accepting that Saints are 4th from bottom having played football that has board me witless whilst still making lots of money.

NewburySaint added 13:28 - Mar 23
Ralph Krueger is a poor chairman.

The very good looking financial results will stem by how the club is run by the MD and Finance Department. And the footballing success including player trading in and out, or lack of as some perceive it, is down to Les Reed.

So the only impact i have seen Krueger have over recent times is to turn the majority of a fan base against him after his derogatory comments about us being a small club. And i would suggest up to that point the majority of the fan base were satisfied with him.

BoondockSaint added 13:56 - Mar 23
Whiteknight is correct on all points.

The big worry is relegation. Take a look at this if you dare:

So while things might look OK, the failure over the last two years to sign a proper manager and proper replacements for the players sold to the Scouse has actually put us in financial peril.

NIck, were Puel and Pellegrino "..the right people put in place." ?

saintmark1976 added 14:01 - Mar 23
Interestingly Nick you make no mention of the eleven million pounds loan paid back to K L not withstanding the two hundred and ten million pounds she also received for selling eighty percent of the club. If my memory serves me correctly her father paid fourteen million for the club when he bought it. Nice work if you can get it as they say and not disconnected from why we languish in the relegation zone I would suggest.

helpineedsomebody added 16:01 - Mar 23
could some one enlighten me please
in this country if you sell a business you have 2 years to invest in another business if not you will be taxed 40% capital gains
how does this apply to some one who is not a tax payer in this country

the_saint added 10:03 - Mar 24
Krueger may be doing a good job who knows as there is no communication between club and fans that’s the problem so us fans just speculate on things. As for reed his signings are hit and miss and his last 2 appointments were not good so he has got to take a good percentage of the blame. We have changed manager and got to the semi final which has given us the feel good factor but we have only beaten Wigan and have a long way to go so as nick said put all aside until the end of season get behind the boys, get them over the line. But in the close of season we need some clarity from the board on what there vision/ plans are

warrens76 added 10:27 - Mar 24
I understand the accountant is doing a tour in the Dentyne bus...i know NicK supports the club, I also know he has no time for Cortese...The club is outspent by B'muff we are in the relegation zone, people are clutching at crocked Charlie as our saviour, christ how far is that from 2014...

SFC is the same club in support as it was in 2002 scrub that 1972...TV income and better commercial deals, which were atrocious and still are compared to most, were is the belief the vision, the growth, the 'next level', because I know Nick I cannot question his love of the club, however the support of this board and Kat is beyond my comprehension.

SaintBrock added 16:59 - Mar 24
Well said warrens76, fully agree. The accounts are formalised bullshit!

Of course we are in profit, £55m from the van Dick sale and no replacements.

This Club has become a joke as the asset stripping carries on unabated.

SaintBrock added 10:24 - Mar 25
We need to spell this out for you Nick...

This is a football club and the only thing that matters is football. What good becomes of a club that profits but in so doing loses its soul?

When did man c, man u or chelsea ever make a profit?

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