Skip to main content

Player sales key to Southampton business model

The authoritative Swiss Ramble has analysed Southampton's financial results for 2017/18. Pre-tax profit fell from £42m to £35m, as revenue dropped 16% (£30m) to £153m, due to the poor performance on the pitch, though this was largely offset by profit on player sales increasing by £27m to £69m. Profit after tax was down from £34m to £29m. This was the first season under the ownership of Lander Sports (UK), controlled by Chinese businessman Jisheng Gao.

The £30m revenue fall was driven by broadcasting’s £26m (18%) decrease from £143m to £117m, mainly due to lower Premier League position and no Europa League money. Match day was down £3.2m (14%) to £19.2m, while commercial was £0.5m (3%) lower at £16.4m.

The £35m profit is actually the fourth highest to date in 17/18 Premier League, only behind Liverpool £125m, Arsenal £70m & Chelsea £67m. MD Toby Steel said, 'We continue to be self-sustaining', which is not to be sneezed at considering large losses at Watford £32m, Swansea City £30m and Everton £13m. Saints made a small £7m loss in their first season after promotion to the Premier League in 2012/13, but since then they have delivered £126m of profits in the last five years.

Saints £69m profit on player sales is actually the seventh highest ever made by an English club. Clearly, player sales has become a key part of the club's business model. In the last 4 years, they made a hefty £184m profit from this activity with only Chelsea £272m and Liverpool £260m ahead of them.

If Southampton are relegated, their TV money would fall considerably from last season’s £107m to around £45m in the first year in the Championship, including a £41m parachute payment, though this would still be a lot higher than the £8m most clubs receive in that league.

The wage bill slightly increased by £1m to £113m, mainly due to contract renewals, offsetting lower bonuses. Player remuneration dropped from £87m to £85m, while total employees rose from 380 to 429. Wages to turnover rose from 62%, to 74% due to the revenue reduction, slightly above the 70% level recommended by Uefa.

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s
1 comment
Read more

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day income is
Post a Comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to depl
Post a Comment
Read more