Fall in profit on player sales hits Saints

The authoritative Swiss Ramble analyses the 2018/19 accounts from Southampton. The Saints went a from £35m pre-tax profit to £41m loss, a swing of £76m, mainly due to profit on player sales decreasing by £48m from £69m to £21m (Virgil van Dijk sale prior year). Revenue also down £3m (2%) to £150m, while expenses grew £25m.

The Swiss Ramble comments, 'The £41m loss before tax is actually the third highest to date in the 2018/19 Premier League, only surpassed by Everton and Chelsea, but their numbers were significantly worse (over £100m). It is true that half the clubs in the top flight lose money, but this is not great.'

The loss in 2019 came after five consecutive profitable years, worth £126m in total, including £42m in 2017 and £35m in 2018. Between 2006 and 2013 they reported (smallish) losses in League One, the Championship and the first season back in the Premier League.

Player trading has been a key part of the Saints business model. In the last five years, they made a hefty £205m profit from this activity with only Chelsea £332m and Liverpool £306m ahead of them.

A £3m revenue fall was driven by broadcasting’s £4m (4%) decrease from £117m to £113m, mainly due to fewer Premier League shown live. Match day was also down £2.2m (11%) from £19.2m to £17.0m, but commercial rose £3.4m (21%) from £16.4m to £19.8m.

Revenue has now fallen two years in a row from the £182m peak in 2017 to £150m in 2019, mainly due to less TV money (absence of Europa League £13m and lower finishing position in Premier League), though match day has also dropped £5m (24%).

Saints revenue of £150m is 13th highest in the Premier League, just behind Crystal Palace £154m, though the gap to the Big Six is enormous - almost a quarter of a billion to 6th placed Arsenal.

Although a substantial 75% of club revenue came from TV (£113m out of £150m), this is far from unusual in the top flight and is only the 10th highest reliance in the Premier League. Furthermore, it should be noted that no fewer than 13 of the 20 clubs are above 70%.

Saints have signed a club record shirt sponsorship deal (reportedly £7.5m a year) with Chinese company LD Sports in 2019/20, replacing Virgin Media, who remain sleeve sponsor. They also have a 7-year kit supplier partnership with Under Armour, which started in 2016.

The wage bill slightly increased by £2m (2%) to £115m, though this disguised a reduction in underlying wages, as bonuses based on final league position rose. Wages have grown by less than £3m in last two years, but wages to turnover up from 62% to 77%, due to revenue fall. The increase in the wages to turnover ratio to 77% means that this is the fifth highest (worst) in the Premier League of clubs that have reported to date, though a fair way below Bournemouth 85%. However, it is above UEFA’s recommended 70% maximum limit.

Wolves get raw deal from FFP

I used to see a lifelong Wolves fan for lunch once a month. He was approaching ninety, but still went to games. Sadly he passed away the other week. As football finance guru Kieran Maguire has noted, Wolves continue to be constrained by financial fair play rules. Radio 4 this morning described them as this year's 'crisis club' and the pessimists have certainly been piling in. Martin Samuel wrote sympathetically in the Sunday Times yesterday, saying that the Premier League drives talent away with regulatory red tape: 'Why could Al-Hilal sign Neves? Because Wolves needed the money. And why did Wolves need the money? Because the club had to comply with an artificial construct known as financial fair play. So Wolves are going skint, yes? No. There is no suggestion that Wolves are in financial trouble, only that they are failing to meet the rigours of FFP. Wolves’ owners appear to have the money to run the club, and invest in the club, and in fact came up with a pow

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

Charlton takeover approved

The long awaited takeover of Charlton Athletic by SE7 Partners from Thomas Sandgaard has been approved: https://londonnewsonline.co.uk/se7-partners-obtain-efl-approval-for-charlton-athletic-takeover/ Charlton have had unhappy experiences with owners for over a decade, so how this works out will remain to be seen. There is certainly potential there, but will it be realised? This interview with Charlie Methven gives detail not available elsewhere: https://thecharltondossier.com/charlie-methven-on-the-record/

The Political Economy of Football V2

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