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Saints Accounts Released
Wednesday, 6th Mar 2019 10:29

The accounts for Southampton Football Club have been released showing that last season's woes have taken it's toll on the club's income, but the books are balanced and we remain in a healthy position going forward.

Saints accounts for the year ending June 2018 have been released and show that turnover is down from over £182.2 million in 16/18 accounts to £152.6 m in the 17/18 figures.

Much of this has been down to the poor season we had in the period the accounts cover which saw us not only lose a substantial amount for dropping some 9 league positions from the previous season but that is only the tip of the iceberg.

All areas of the clubs revenue were hit with:

• Broadcasting revenue falling by nearly £26m from £142.9m to £117m

• Matchday income decreasing by £3.2m from £22.4m to £19.2m

• Commercial earnings dropping by £594,000 from £15.5m to £14.9m – accounting for just 9.7 per cent of turnover

The year saw the takeover of Gao Jisheng but the accounts proved once and for all that there has been no additional debt placed against the club to facilitate that deal, nor has there been any dividends taken out of the club or additional payments out in cash or interest.

The Daily Echo in it's verdict of the accounts reports.

"Overall, the club is in a fairly similar position to the pre-takeover state of affairs, running as self-sustaining business with profits reinvested."

Saints managing Director Toby Steele the man who oversee's the running of the club on an everyday basis says this.

“Taking the accounts themselves we have seen a decrease in revenue and bottom line profit but that is primarily from the effects of Europa League participation in the previous year and the EFL Cup run.

“Those two bring in what we would term one-off income because we haven’t regularly been in those positions, so they are significant in that there is very little cost associated with them, particularly Europa which is revenue that pretty much goes straight to the bottom line.

“That saw a reduction in revenue and operating profit but the other big one is the move in league position from 8th in 2017 to 17th in 2018 which lost us a significant amount of turnover and no cost associated with that at all other than a little bit of player bonus.

“We had a much better year in terms of player trading.

“Although we only sold two players, which were Virgil van Dijk and Jay Rodriguez, we know the fee on Virgil was significant and Rodriguez’s book value had been fully written down pretty much so the fee for him was almost all profit.

“When you add that back our overall profit position was only £6m lower than the prior year’s so it is a fairly similar end result but quite a lot going on above that to explain.

“Disappointing in terms of the league position one because we had more control over that at the start of the season, the Europa and EFL less control, particularly Europa as we knew we weren’t in it.

“In terms of the overall health it is good. We continue to put everything back into the club, no dividends coming out, no additional debt put on the business and so no additional cash or interest costs coming out.

“We are continuing to be self-sustaining and so if we want to buy players we can, if we want to invest in infrastructure we can and if we don’t we don’t have to.”

Other notable figures in the account include the wages to turnover ratio rising to 74 per cent as player salaries saw a modest decrease to £85.2m.

“It’s manageable,” insisted Steele. “We are honest enough to say the wages we planned to pay in that season our end league position didn’t justify those wages. We will be open about that. We were paying a wage bill significantly higher than a 17th place finish.

“That is disappointing but the prior year we did have the Europa League revenues as well and the EFL Cup run so part of that is masked by those. If you take those out the ratio gap wouldn’t have been quite as big but still bigger than we wanted.

“We accept that we are paying more than we possibly should be based on our league position, and that has continued into this year.”

But as a club Saints are still expanding they have seen a 13 per cent increase in employees to 429 across the club, excluding the more than 1,000 employed on a match day.

The highest paid director, assumed, though unconfirmed, to be chairman Ralph Krueger, had a £30,000 pay rise to earn £636,000.

This year is also the first that the accounts of the company used to purchase Saints by Gao, Lander Sports (UK) International Investment Co, will also be filed.

However, Lander’s accounts do not provide an accurate detail of the club’s position due to only taking in part of the year and the accounting measures used for valuing assets which, in football, means the value of all existing players is set at zero for the new company.

The lack of serious debt remains a positive for the club.

“From a debt perspective we still have our working capital facility that we have every year. That was still in place at the year end but paid back just after the year end,” explained Steele.

“We have got the amount to UBS which is a bank loan we are repaying over three years so we will be debt free from that perspective in a couple of years."

Some Saints fans will not have heard of Toby Steele, that is a good thing.

But the good news is that the club still turned in a profit, the club is unquestionably still in a position of overall financial health with a pre-tax profit of £35.2m - albeit £8.4m down from the previous year’s £43.7m.

The key thing now is for Saints to stay in the Premier League, undoubtedly the last two years have been difficult on the pitch and also times of change, but it appears that the club is being well run and more importantly is run on a sustainable basis.

A decade or so ago football was rife with owners who pumped in multi millions to football clubs and many of those cubs are now paying the price as the club was not sustainable without the owners money and when he had had enough and pulled the plug as happened at Portsmouth, many clubs found themselves in administration and more to the point that their biggest creditor was their owner who had only loaned the club all that money not gifted and they were on the verge of oblivion.

These days football clubs are bound by financial fair play rules and other stringent regulations, that is why fewer clubs struggle these days

But old habits die hard and that has led some Saints fans to question why Gao hasn't done the same as those owners of the past and pumped in the cash..

The answer is that Gao like Markus Liebherr knows that a business has to be sustainable, in footballing terms it has to generate it's own income and certain club's have a far greater power to generate that income than others whether it is Champions League football, TV money or just the ability of it's fanbase to but merchandise in gigantic quantities.

A report this week stated that if Tottenham Hotspur doubled the wage bill of it's entire playing staff and added a further 7 players on £100k a week it would still not be paying as much as Manchester City, that not only tells you how big the task is for even Spurs to win the Premier League, but how far behind the big six the rest of us now are.

So these accounts are good news for Saints supporters, they tell the facts not the fiction n the running of the club, calling for Gao to go as some have on social media is harking back to the 1970's when football club's were run by butchers, bakers and the local accountant and in times of trouble could be replaced by other local butchers, bakers and accountants, those days are long gone and in case anyone hasn't noticed there is not a queue of prospective billionaire owners stretching down Brittannia Road to take over should Gao decide he has had enough.

The accounts show a well run club financially and that gives us a foundation to continue to build on, spending money does not guarantee success, we nearly found out the hard way last season when we panic bought in the January window and Fulham one of the highest spenders in the League last summer are finding that out now.

The key now is that hopefully now the accounts are out there, the supporters will see the difficulties the club have and are continuing to face in a Premier League that sees the rich get richer and the poor poorer with every month let alone year.

A previous CEO/Chairman made idle boasts about Champions League football that had no foundation in terms of our financial ability to be able to achieve that, Leicester City bucked that trend and to a lesser degree in 2016 so did we, but that has raised false hopes and Leicester remain the only club outside of the big six to finish in the top four since Everton managed to in 2004/05 some 14 years ago.

Going forward the club needs it's supporters behind it, we are on a slippery slope at the moment that needs to be stopped, yes it needs events on the pitch to help stimulate it, but we have to stop the negativity surrounding the club, Gao hasn't said a lot verbally about his intentions, but the accounts for the first year of his ownership tell a positive story and one that is no different from Markus Liebherr's short time with us.

For the short term Saints supporters need to get behind the club and help it beat the drop, if we achieve that we are in a fine position to move forward next season, we have a stable club financially and it has addressed the problems of a year ago and we have a manager who is getting results with a squad we all know is short of a player or two.

Stay up and we have the money to bring those players in and start to establish ourselves in the top 10 again, but to do that the club needs the supporters behind them and backing the club through the turnstiles and the increased revenue that brings.

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saintmark1976 added 11:17 - Mar 6
Nick, £636000 ? I'm reminded of the Harry Enfield T V sketch "I saw you coming".

SaintNick added 11:21 - Mar 6
this is cheap for a Premier League chairman, our last one was paying himself £2 million

Wembley76 added 11:57 - Mar 6
Instead of questioning his (RK?) salary, perhaps one should explore the commercial sponsorships & income streams that have grown exponentially under the current chairman!

I_would added 12:59 - Mar 6
Nothing to do with any of that. Saints FC are paying out £34m in wages per year on players that are either on loan or we don't want.

Thirteen players we don't want that Les stuffed us with!

Butty101 added 13:08 - Mar 6
@Wembley76 - do you understand what exponentially means? Im not sure you do.
Comercial income in the 2014 accounts was £10.1million.Its now 14.9. Hardly exponential.

@Nick Ralph is part time so, one would assume he picks up a pro rata salary.

SaintNick added 13:25 - Mar 6
Some people try hard to find a negative in everything.

Actually the commercial income in the 2012/13 the last full season with Cortese was £6.7 m, in 2014 it had increased to £8.3m, so a long way off what it is today.

Yes Ralpk K is part time, because the chairman's role is just that, but he does spent time on other projects in addition to his chairmans role such as sitting on the transfer committee.

Overall Krueger and Steele jointly cost half of what we were paying Cortese

Dobbin60 added 13:29 - Mar 6
Well run!!! How can we go from successive top ten finishes and European football to relegation battles. Just because we are self sufficient doesn’t make us successful many teams in the lower leagues are self sufficient. Will you say we are well run when we’re in the championship.
Success on the pitch brings success off it.
What is fair play when teams like wolves can lose £1 million a week in their promotion year and still be allowed to spend over £100 million in the summer?

SaintNick added 13:37 - Mar 6
Dobbin60, West Brom and Stoke went from successive top 10 finishes and then got relegated, Burnley likewise this year after 7th last.

One thing is that well run clubs and success doesn't have a lot of correllation hence Chelsea facing a transfer ban and City being questioned, indeed several promoted clubs have been fined under the fair play rule including Bournemouth.

The first step is being well run, if you do that you have a chance of success on the field, but unless you are a big 6 club you havent really got enough money t make a real difference, as I said Fulham have spent something like £110 million this season


surreysaint added 14:14 - Mar 6
Watching Dusan Tadic rip apart Real Madrid last night I reckon not selling him and replacing him with Moi Elyonoussi might have helped the finances and the league position... #winwin

Kingsland34 added 14:20 - Mar 6
Well it will be worse next time as attendances are 2-3,000 down this season and I guess hospitality will have followed that trend. Which seems to have gone without comment, all indicative of both a disconnect with the supporters and of flawed economies. Still no doubt they will look to offset it by morally compromising ourselves by taking up a betting shirt sponsor. The latter should be resisted at all costs, it is not true to the 'Southampton Way'.

Farlow added 16:07 - Mar 6
I cannot comprehend how the idiot in charge of transfers sold DusanTadic for less than we paid for Shane Long

sidsaint added 16:25 - Mar 6
The most important thing they show is we need to stay up!

skiptonsaint added 16:49 - Mar 6
Nothing wrong with these accounts up to a point but they don’t cover some of the more recent buying and selling.

We cannot afford anymore duds now as we know and we could do with a couple more academy products coming through.

Ie Hopefully the rise of Valery makes up for MOI but we need a few more smart deals.

We also now have Ralph and I personally would get Carrillo and Boufal back and see what he can do

saintmark1976 added 17:27 - Mar 6
Nick, "some people try hard to find a negative in everything". Equally you could say that some people look at everything the owners and management of S F C do whilst wearing a pair of rose tinted spectacles.

IWOZTHERE added 17:37 - Mar 6
Spot on saintmark.... It's all smoke and mirrors. Just tell us how much will be made available for transfers in the Summer cos we won't get much for our loanees?

Jesus_02 added 17:50 - Mar 6
I have said this a hundred times or more Cortese may have taken 2m a year but there was not a boated board . This is why Gao hasn't replaced Les. I would be extremely surprised if the Cortese structure coast more than the Katherine era.

Under Les we slipped into a business model that was scarily reminisant of Lowe . Risk averse and seeking to define performance on player sales.

Cortese new that football was the product not footballers. The reason we spend more on wages than we should is because we have too many bang average players.

I am confident that Gao will trim some of the fat and I can see the recruitment side having a re-structure as well (recent performance reflects our aweful position.... replacing Boufal with elyounoussi both ~18m is inexcusable... I wont even go into the defence situation.

There is nothing really positive about these set of financial results. Pretending otherwise undermines your codability.

schatfield added 01:39 - Mar 7
the report shows we are a well run club, yet half the posters on this forum will still think the owner is out for a fire sale, and asset strip us. Laughable.

LordDZLucan added 08:38 - Mar 7
The question I ask myself is 'Why would a billionaire from overseas buy Saints fc with the aim of 'running a self-sustaining business'?'. It sounds very boring and IT IS VERY BORING. Take ambition out of the equation and it is not that difficult to achieve that aim. So there has to be more to it and unfortunately I don't being successful on the pitch is the reason Mr. Gao bought into Saints.

LoisDeem added 12:10 - Mar 8
Saints always fall just short of being a top club, and this has happened since the going of Lawrie Mac, where Chris Nicholl was the first to suffer under this risk averse strategy.
I would sooner see a cohesive and well run club that is not trying to reinvent by stealth the interpretation of what 'self sustaining' is supposed to mean. At the moment it looks like cosmetic repairs where the onfield activity is being blamed for the shortsighted chaos created from the boardroom. Much like the conductor blaming the whole orchestra methinks. The sooner some proper joined up thinking is applied the better.

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