As we are learning in the context of Ukraine, there are different types of neutrality. The Swiss went for armed neutrality which meant that anyone trying to invade them would incur significant costs.
From his fastness in Zurich, the Swiss Ramble comments with analytical authority on
the accounts of leading clubs, maintaining dispassionate neutrality (mostly)
while he does so. I wouldn’t think that
he takes prisoners though. Today it is
the turn of Southampton to be subjected to his scrutiny.
Their pre-tax loss narrowed from £76m to £23m, as revenue
rose £30m (24%) from £127m to £157m, profit on player sales increased £2m from
£14m to £16m and operating expenses fell £25m (12%). Net interest payable was
up £6m to £9m. Loss after tax was down from £62m to £15m.
The £23m loss is not great, but it’s one of the better
financial results reported so far in 2020/21. A full year of the pandemic
resulted in some very high losses, e.g. Chelsea £156m, Arsenal £127m.
Saints have now reported losses three years in a row, adding
up to £140m, which has completely wiped out the preceding five years of
profits. This profitable period was worth £126m in total, including £35m in
2018 and £42m in 2017.
The decline is partly due to the club making less money from
player trading, as profit in the past 3 years has averaged only £17m, compared
to £42m between 2014 and 2018. This season will be much better, featuring sales
of Ings to Villa, Vestergaard to Leicester and Lemina to Nice.
According to the
Deloitte Money League, which ranks clubs globally, Southampton had the 27th
highest revenue in 2020/21, sandwiched between Borussia Mönchengladbach and
Napoli.
COVID cost the club £29m in 2020/21 (mainly match day and
commercial £23m, broadcasting £7m), partly offset by £17m deferred from prior
year accounts. This gives net £12m impact, so loss would have been £11m without
pandemic. Revenue loss over the last two years is £40m.
The profit on player sales rose £2m from £14m to £16m,
mainly Pierre-Emile Hojberg to Spurs, Harrison Reed to Fulham and Angus Gunn to
Norwich plus contingent fees on previous deals. Transfer market depressed by
COVID reducing clubs’ spending power.
Gross transfer spend in the last five years increased to
£272m, compared to £216m in preceding 5-year period, but the taps have been
largely turned off in last 2 seasons, due to restrictions on investment on
their Chinese owner. Highest annual expenditure was £86m in 2018.
The wage bill fell slightly by £1m (1%) to £113m, which
means that wages have been essentially flat for the last 5 years. Due to the lack of growth, the £113m wage
bill is in the bottom half of the Premier League, the lowest reported to date
in 2020/21. For some perspective, wages were around quarter of a billion less
than Manchester City £355m.
The wages to turnover decreased (improved) from 90% to 72%,
around mid-table in the Premier League. The club said the ratio would have been
a respectable 66% if the impact of the pandemic were excluded.
Gross debt fell slightly from £92m to £91m, due to CHF/GBP
exchange rate. Largely comprises £78m loan from MSD Holdings repayable in 2025
and £12m bank loan repayable in 2 equal instalments over next 2 years.
[I know a number of Saints.
Depending on where you stand one could say that Saints are punching
above their weight but look unlikely to break through the glass ceiling above
them. Their manager is a highly rated by
neutrals, but could be a target elsewhere].
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