Irresponsible spending

[The9]

It didn't bankroll both did it? Chamberlain was sold after our first promotion. Point is that Glasgow was suggesting we haven't received any significant transfer fees in the two years, I was saying that we have.

 

Whats the difference in saying it covered back-to-back promotions or that it amounted to our outlay on Ramirez? All comes from the same pot and hardly meant to suggest we kept the Chamberlain money locked away in a vault, ready to splurge on Gaston. We were on topic of transfers in/out and the fees involved in both Ramirez and Chamberlain deals were similar. It's hardly a massive leap.

 

Your main point is sound, there's no "lump sum" because teams pay instalments.

 

As we took out a loan to stump up some early Gaston money (pre-Prem handout) and the stumbling point was the payment schedule, I would suggest that the payments we were getting from Arsenal weren't sufficient to offset the up front cost of Gaston, in terms of cashflow.

[Saint_clark]

I'd wager we got a sizable amount for Chamberlains first England appearance and first goal.

[skintsaint]

Not really, another signing that if the worse did happen and we fell from the Prem we could get off the books quite easily.

 

The current sky cash covers the fee i'm sure.

[CB Fry]

How's our crack habit looking?

 

We're still addicted and a long way from being self sufficient but luckily bankrolled by free money from a dead guy.

 

We're jolly lucky is all.

[ericofarabia]

I think it is only right that we all step back and take stock of what has happened over this transfer window, and not stick our heads in the sand and assume we have a bottomless pit of money to spend, if we are to maintain the moral high ground over Portsmyth. Looking at various other clubs message boards, most are initially as shocked as we are at events, but then it turns to green eyed monster jealousy and sweeping statements about us out living our means. A few have have seen what we are striving towards, and even admit to admiring the way we are going about it, whilst high lighting their own club's (WHU, Stoke & Sunderland) own short comings in going for quantity over quality.

 

Importantly, i think the club have actually done what they set out to do from the outset of this Transfer Window. Weren't figures of a war chest of over 30 million being bandied about?

The extra revenue to all Prem Teams from this season onwards, on top of what was an already fair old wedge of money will have gone a long way to off setting the fees already.

 

I maybe a bit naive here, but aren't most transfer fees paid in a structured way over a period of time, rather than a one off cheque,

or a quick trip to The ATM and 15 million quid withdrawn and stuffed into brown paper envelopes? More importantly, virtually the whole squad is signed up to long term contracts,

so, if anybody comes sniffing around for any of our players, they are going to have to stump up silly money before the club would even think about entering negotiations.

 

I am sure that The Club have looked very closely at where they stand with regards to The Finacial Prudence thingy rearding salaries V revenue %''s,

I'm sure The FL/FA whoever, will be keeping a beady eye on us, as weren't we one of a few clubs who voted against it?

 

My head is still spinning at the events of the last week, body covered in pinch marks, but yep it seem's it really is happening!!

[Chewy]

easy to turn a blind eye and hope for the best!! just like last time round

 

On the thread about the summer of inactivity, to back up your agreement with Barry Sanchez that it wasn't good enough, you said second best in your life wasn't good enough. So, have you suddenly changed your mind or are you just trolling .... Hmm, I wonder.

[Stepgar]

If anyone has actual information on it to suggest there's something wrong then by all means share it. Otherwise it's just pointless trolling.

 

Spending 40m or so with today's TV money isn't that crazy, plus the wealthy backers. The worry comes if you're buying 9 or 10 players and spending a fortune on fees and wages, then doing the similar every window, leaving a bloated squad of wasted money. We aren't doing that.

 

Did we not just inherit 90million form the tv deal? Just this season alone? If so we have not even gone to half of that revenue. So i agree with Adrianfc that we should stop panicking and enjoy the moment.

 

I am sure that IF we go t relegated then we would have clauses within the contracts to allow these players to leave for the right price. As Frankie said back int he 80's Relax.

[ericofarabia]

I think it is only right that we all step back and take stock of what has happened over this transfer window, and not stick our heads in the sand and assume we have a bottomless pit of money to spend, if we are to maintain the moral high ground over Portsmyth. Looking at various other clubs message boards, most are initially as shocked as we are at events, but then it turns to green eyed monster jealousy and sweeping statements about us out living our means. A few have have seen what we are striving towards, and even admit to admiring the way we are going about it, whilst high lighting their own club's (WHU, Stoke & Sunderland) own short comings in going for quantity over quality.

 

Importantly, i think the club have actually done what they set out to do from the outset of this Transfer Window. Weren't figures of a war chest of over 30 million being bandied about?

The extra revenue to all Prem Teams from this season onwards, on top of what was an already fair old wedge of money will have gone a long way to off setting the fees already.

 

I maybe a bit naive here, but aren't most transfer fees paid in a structured way over a period of time, rather than a one off cheque,

or a quick trip to The ATM and 15 million quid withdrawn and stuffed into brown paper envelopes? More importantly, virtually the whole squad is signed up to long term contracts,

so, if anybody comes sniffing around for any of our players, they are going to have to stump up silly money before the club would even think about entering negotiations.

 

I am sure that The Club have looked very closely at where they stand with regards to The Finacial Prudence thingy rearding salaries V revenue %''s,

I'm sure The FL/FA whoever, will be keeping a beady eye on us, as weren't we one of a few clubs who voted against it?

 

My head is still spinning at the events of the last week, body covered in pinch marks, but yep it seem's it really is happening!!

[Fitzhugh Fella]

Always worth showing caution in these circumstances, and spending the sort of money we did at the start of *last* season having not yet banked any of the lucrative Premier League cash was mildly terrifying, but having got through last season unscathed, with the wage bill appearing to be under pretty good control and with the massive increase in guaranteed revenue this season, I'm satisfied we're in very good shape financially.

 

I'm sure that'll be of relief to everyone

 

Seriously, absolutely no issue asking questions - it's when questions aren't asked by anyone that problems start arising. Just look down the road, they're getting excited about beating Morecambe and one of the reasons for that is that nobody started asking questions about sustainability until it was too late. Our situations are, of course, massively different - we've got our own assets for a start, we've signed players on what appear to be affordable wages and we've benefited from the new broadcasting deal to facilitate a lot of the spending.

 

 

I think a lot of people are forgetting that we are privately owned now - the only people who should be (potentially) worrying in the Liebherr estate. There is no stock market or shareholders to answer to. We have become a mini Chelsea.

[yorkiesaint]

Agreed. Anyone who thinks we are bankrolled by the Liebherrs is wrong. They have spent their £33 million and are now pulling slowly out. My guess is that the debate in may was about the timetable.

[Fozzybear]

£35 million spent by Liverpool on Carroll when he was largely unproven in the prem = irresponsible spending. We have spent the same on three players of real quality and proven at the highest level. People need to quit trolling rediculous b*****ks on this forum and recognise the tremendous work the club are doing to take us to the next level.

[Gingeletiss]

£35 million spent by Liverpool on Carroll when he was largely unproven in the prem = irresponsible spending. We have spent the same on three players of real quality and proven at the highest level. People need to quit trolling rediculous b*****ks on this forum and recognise the tremendous work the club are doing to take us to the next level.

 

Like

[Glasgow_Saint]

Not really, another signing that if the worse did happen and we fell from the Prem we could get off the books quite easily.

 

The current sky cash covers the fee i'm sure.

 

QPR probably assumed the same.... Remy, Robert Green, César, Granero, Taarabt, Bosingwa and Park all players QPR wanted to sell and a year a go probably assumed they could/would.

They have not been able to sell any and have needed to simply release, loan or stick with them.

 

Lets not think about relegation just now though

[sunrise]

Anyone else worried?

 

A little bit but there's nowt we can do about it and we'll only find out how deep the muck is when/if things go tits up.

[BristolSaint]

I think in Cortese we have a very astute businessman. In MOPO we have a very well respected coach that both current and potential players rate highly. The revenue from Sky alone is sufficient to pay the wages and transfer fees. Additional revenue is then gained from gate receipts and merchandising.

 

Wage bills are being tightly controlled and a number of surplus players have been released, helping to manage the wage bill even if not re-couping transfer fees,

 

A completely different scenario, structure both in terms of stadium and staff compared to our fishy friends down the road

[ant]

QPR probably assumed the same.... Remy, Robert Green, César, Granero, Taarabt, Bosingwa and Park all players QPR wanted to sell and a year a go probably assumed they could/would.

They have not been able to sell any and have needed to simply release, loan or stick with them.

 

Apples and oranges. To make such a direct comparison you have to assume that both clubs are run in a similar manner (a fair wager says they're not). Not to mention that Green, Cesar, Bosingwa and Park are the wrong side of 30 and Remy/Taarabt have... well, 'reputations' that rather precede them.

 

Also bear in mind that the remaining fringe players ('reserves' in old money) will almost all be released next Summer as the majority of their contracts expire in 2014.

Edited 19 August, 2013 by ant

[skintsaint]

QPR probably assumed the same.... Remy, Robert Green, César, Granero, Taarabt, Bosingwa and Park all players QPR wanted to sell and a year a go probably assumed they could/would.

They have not been able to sell any and have needed to simply release, loan or stick with them.

 

Lets not think about relegation just now though

 

I think most of them have left QPR?

[OldNick]

F88CK it just enjoy the ride! Life's too short, if the money is available through Sky etc. spend it. No one can take the money when your six feet under, and lets face it, it is not our money. The ticket prices are no different with our spending now, than if we didn't spend a penny. Or should we just do an Arsenal and sit on a big pot of money?

No we criticise Pompey fans for saying nothing and we should learn from that. I want a football club there for my grandchilren etc etc

[angelman]

Irresponsible spending? That depends if the **** hits the fan, we can off load for decent money.

 

Gaston - £12m

Wanyama - £12.5m

Osvaldo - £12.9m

Lovren - £8.5m

 

Would we get £40m+ if selling those 4? I would have thought so. I know it's only a pundit commenting on one game, but Merson was saying that Wanyama is a £20m+ player. Gaston seems to have a lot of interest from Italy so maybe would get back what we paid or say £10m. So that there is £30m without taking into account Osvaldo and Lovren. Maybe some will think that that is unrealistic, but I don't think so.

 

And what about say Cardiff? Their 3 big signings cost them £27m. Gary Medel £11.4m, Steven Caulker £8m, Andreas Cornelius £7.5m

 

Our recent transfers income/expenditure paints a different picture....

 

2007/8 = net income of £24.5m

2008/9 = net income of £1.2m

2009/10 = net income of £2m

2010/11 = net expenditure of £2.6m

2011/12 = net income of £7.7m

2012/13 = net expenditure of £36.5m

2013/14 = net expenditure of £33m

 

This is taken from http://www.transfermarkt.co.uk/en/southampton-fc/transfers/verein_180_2013_default_default_alle_a_default.html and includes figures of spending £2.5m on Gazza which I don't think is right and also that we sold Forren for £1.8m which I think might be a little light. So from relegation down to L1 and back to PL, we have done it bloody cheaply. I think it naive to think that you can then push on when back in PL without spending anything. So those saying that we shouldn't be spending a net £60m+, do they expect us to try and step up to the European places with a L1 team?

 

And then, looking at the starting 11, there were 4 academy players. What is the average that people would want to spend on players - £5m? Well, apply that to the academy players and you have "saved" (i know it's simplistic) yourself £20m (and Shaw might be worth that by himself).

 

As I started off, if we hit financial strife, would it be possible to realise a lot from player sales?

[Brave Sir Robin]

There is an absolute chasm between the Championship and Premiership in terms of quality. I think we spent the absolute minimum we needed to last summer in order to have a hope of staying up, then were lucky enough to have 2 successive managers good enough to ensure we over performed. West Ham already had a prem team so they didn't need to, Reading didn't spend big enough and suffered the consequences. This years new boys will probably struggle unless they spend as much as we did at the very least.

 

I think we've just about got our squad up to prem standard now (i.e. unlikely to be relegated), so I'm less worried than I would be if we'd spent less.

 

Comparisons with Pompey just don't stand up, as the income needed to stay competitive has shot up dince they were up here, and because they were basically conned whereas we're as assured as you can ever be that we have seriously rich owners who are happy to spend.

 

Markus told us all himself we no longer need to worry about money. Cortese went out of his way at the end of last season to obtain confirmation from his daughter that this is still the case.

 

Relax and enjoy the ride!

[Colinjb]

As said previously, it's right to ask the question. Personally though I am not too concerned currently. I would trust that the powers that be would not be leading us into potential ruin, there seems to be a possible get out of jail plan should the funding be pulled in the form of the recoup-able transfer fees. Although if the sh*t really did hit the fan it would then become a buyers market as the vultures circle.

[Olallana]

If we move up 6 places, finish 8th instead of 14th the difference just in the prize money is half of this fee.

 

Not highly unlikely IMO. And I know for sure the club will sell at least 1 extra shirt

[RinNY]

No we criticise Pompey fans for saying nothing and we should learn from that. I want a football club there for my grandchilren etc etc

 

Pompey were not owned by seriously rich people, with the possible exception of Gaydamak who was a crook. If the people what at various points "owned" Pompey had been honest & had the wealth they claimed, that whole meltdown wouldn't have happened the way it did. Saints are not now owned by people of the Lowe/Wilde/Crouch ilk who have a few million: the Liebherr's are serious billionaires, and Cortese is a serious money man. Stop worrying, our situation as a club is in no way similar to Portsmouth's. It's just not a valid comparison to draw.

[Saint_clark]

I think most of them have left QPR?

 

All except the two keepers, although it's worth noting that they're all out on loan with the exception of Bosingwa. So chances are QPR are still paying some of their wages.

However they are all older players with little resale value, completely different to the younger signings we've made.

[Crowds]

The whole argument s based on assumptions and guessing... All we know is the prem income and a good idea of st Mary's revenue. What we don't know is how much is in the pot, put by etc so I'd just sit back and chill out.

 

There really is no need for pessimistic threads every two minutes jeez

[WATERSIDEIFASAINT]

100% not worried. We have at least 3 players currently in our squad who we could sell for £20 million plus(Shaw,Morgan and Wanyama and at least another 3 worth £10 million plus(Lovren,Osvaldo,Clyne) Lallana,Cork,Jrod and JWP would all be £5 million plus.

 

So we have plenty of players worth a lot of money in our squad and we have the backing of our owners and an excellent academy with more future players on the conveyer belt.

 

Never been a better time to be a Saints supporter

[Viking Saint]

Given the fiscal prudence that NC has ruthlessly displayed throughout his time here, I'm not in the slightest bit concerned whatsoever...given his financial background, I bet he can account for every penny the club spends....yes, we've spent a bit of money especially for us but its still a **** in the ocean compared to the money that's been thrown around the Premiership in recent years....time to buckle up and enjoy the ride....it's great to be a Saint

[Glasgow_Saint]

Time will tell i guess.

 

Fingers crosses

 

Lightening never strikes twice right?

[Colinjb]

Time will tell i guess.

 

Fingers crosses

 

Lightening never strikes twice right?

 

Don't say that! We are not standing in the same location.... there is some 17 miles difference.

[Joey-deacons-left-nut]

Anyone else worried?

 

Yes. Concerned would probably be the best way of putting it.

[St_Tel49]

Agreed. Anyone who thinks we are bankrolled by the Liebherrs is wrong. They have spent their £33 million and are now pulling slowly out.. My guess is that the debate in may was about the timetable.

Care to elaborate? - or are you just guessing?

Edited 19 August, 2013 by St_Tel49

[stevegrant]

Care to elaborate? - or are you just guessing?

That's the amount that had been converted to equity at the time of the last set of accounts.

[KelvinsRightGlove]

Your main point is sound, there's no "lump sum" because teams pay instalments.

 

As we took out a loan to stump up some early Gaston money (pre-Prem handout) and the stumbling point was the payment schedule, I would suggest that the payments we were getting from Arsenal weren't sufficient to offset the up front cost of Gaston, in terms of cashflow.

 

Didn't Cortese stipulate that Arsenal were to pay the initial £12m fee upfront in one lump sum.

 

The remaining £3m was to be add-ons for performance, etc.

 

Apologies if incorrect - that was just my understanding of the deal?

[yorkiesaint]

Care to elaborate? - or are you just guessing?

 

About the disagreements in May, just guessing. I can't see any evidence that the Liebherr family have put any money into saints other than the original £33 million loan that was converted into shares. If anyone else knows any different I'm happy to be corrected.

 

The whole 'here's a wealthy owner thing waving from stand', that's just PR for the fans who are all to willing to put 2+2 together and come to 5. In my view we always have been Cortese's project, I guess that Markus invested cash for 5 years (5 year plan) after which time he was promised a return on this investment, leaving saints a sustainable premier league club. Now the Liebherrs are withdrawing money. I'm totally fine with this and don't think it's negative and I support what Cortese is doing. I am guessing his plan is to use efficient tax planning to pay wages through offshore trusts, offshore loans to avoid corporation tax and so on and all the other things which major investment banks are good at to keep us one step ahead.

[Toadhall Saint]

As long as we remain in the Prem then I'm not too concerned with our level of spending however, should that spending say double or we get relegated then I'd be very concerned - I never want to go back to the days of Admin and keeping everything crossed that a white knight is going to save us.

[Gemmel]

About the disagreements in May, just guessing. I can't see any evidence that the Liebherr family have put any money into saints other than the original £33 million loan that was converted into shares. If anyone else knows any different I'm happy to be corrected.

 

The whole 'here's a wealthy owner thing waving from stand', that's just PR for the fans who are all to willing to put 2+2 together and come to 5. In my view we always have been Cortese's project, I guess that Markus invested cash for 5 years (5 year plan) after which time he was promised a return on this investment, leaving saints a sustainable premier league club. Now the Liebherrs are withdrawing money. I'm totally fine with this and don't think it's negative and I support what Cortese is doing. I am guessing his plan is to use efficient tax planning to pay wages through offshore trusts, offshore loans to avoid corporation tax and so on and all the other things which major investment banks are good at to keep us one step ahead.

 

That's my opinion on the situation as well.

 

The meeting in May was based around how the club was run (Hierarchical structure) and Cortese seemed to win the day. The idea that he could run that business completely independently with an open cheque book is fanciful at best.

 

The point at which the loans were converted to equity ,made perfect sense as the riches of the Premiership lay ahead. From a business perspective, the timing also represented the optimum in terms of a return. To see any significant rise in the Clubs value at that point would need serious serious investment, without any guarantees.

 

More recently we have seen through Companies House, "Statements of Solvency" and a reduction in share capital, both of which would not represent a huge leap in faith to suggest that a sale or transfer of ownership is on the cards. - That said they could mean completely other things.

 

My best guess is that Cortese was allowed to continue to run the club independently, within it's own means. Whether these signings remain "Within our means" we shall see, but lets not forget there is a charge against the club for all assets. It will be worth keeping an eye on that to see if it has been satisfied or whether it actually increases.

[aintforever]

I'm not worried but we are obviously not spending "within our means". It is either debt or the big guy's estate bankrolling us.

 

There is absolutely nothing we can do about so just enjoy the ride, just like the guys down the road did.

[Bearsy]

I went to supermarket earlier + bought grapefruit. I was on automatic till tho and i couldn't find grapefruit so I just weighed it in as grapes. It worked out v.expensive.

[CHAPEL END CHARLIE]

I think it is a fair question you've posed Glasgow.

 

Although we can delight at the quality of squad we're building and admire NC's great plans,drive and ambition there is a fine edge between him succeeding and being hailed a messiah, or doing a Ridsdale, who had similar ambitions at Leeds once upon a time.

 

Of course we have the Liebherr Trust, but there may come a point where the family feel they have backed it enough. I hope that day is a long way off, but its foolish to assume spend, spend, spend is without some risk.

 

Aye.

 

The question is by no means an unreasonable one. Football clubs (even those with wealthy and indulgent owners) should in the long run make a profit or at least break even. The scars of receivership cut deep and have yet to fully heal over for some of us.

[CB Fry]

I'm not worried but we are obviously not spending "within our means". It is either debt or the big guy's estate bankrolling us.

 

There is absolutely nothing we can do about so just enjoy the ride, just like the guys down the road did.

 

This is pretty much spot on.

[The9]

Didn't Cortese stipulate that Arsenal were to pay the initial £12m fee upfront in one lump sum.

 

The remaining £3m was to be add-ons for performance, etc.

 

Apologies if incorrect - that was just my understanding of the deal?

 

Well even if it was, we didn't have enough of it left to hand to front it up for Gaston without a bunch of fartarsing about.

[The9]

Did we not just inherit 90million form the tv deal? Just this season alone? If so we have not even gone to half of that revenue. So i agree with Adrianfc that we should stop panicking and enjoy the moment.

 

We're just about to get a big ol' wad of Prem cash for last season and will be getting more next year, as will everyone else. I'm inclined to think the reason where was a shatstorm about funding in the summer was because Cortese's worked out that next year EVERYONE will have tons of extra cash already floating around, and he wanted to spend big this year before the cost of players signing for Prem clubs ramps up ridiculously in line with other teams' expectations.

 

Obviously as we'd already spent some of last year's money on players last summer, we needed more investment to get ahead of the game.

 

I'm not worried about the spending, I do however reserve the right to question the amounts, because unlike those skatebags down the road, I have an interest in making sure the club I have a season ticket for isn't spending money it can't afford because I would like the current level of success to increase, rather than being a very short term temporary measure and have my club as a byword for financial recklessness and embarrassment to the division we're in.

 

Richard Scudamore on BTSport on the weekend was very keen to point out that the FFP rules were intended to prevent teams doing what Portsmouth did, and I think we should all be grateful that that specific example isn't a popular one.

[Roo1976]

so youve not heard about P.P.I................that was the banks fault was it not?

[Bearsy]

I like to have a few lols at Cortese, who doesn't? But I'm not the slightest bit worried bout us ending up administration or bankrupt with him in charge. Just won't happen.

[Toadhall Saint]

so youve not heard about P.P.I................that was the banks fault was it not?

 

Irresponsible selling

[buctootim]

I like to have a few lols at Cortese, who doesn't? But I'm not the slightest bit worried bout us ending up administration or bankrupt with him in charge. Just won't happen.

 

Its possible that Cortese massively ****es off the Liebherrs who then pull the plug. Its also possible they give him too much leeway and trust and he gambles on CL and ****s up. Its not the most likely options, but they are possibilities. Too much vested in one man imo.

[Glasgow_Saint]

A few wise heads on here, v.happy

[saintadjg]

My faith is firmly with Cortese

[eurosaint]

The OP poses a reasonable question, but I'm afraid that for us it is a bit like sitting on an aircraft with your life in the hands of the pilot and there is basically bugger all that you can do about it !!

Comparisons with the Skates though are pointless as the two situations are as different as night and day !

With private ownership there will always be a certain lack of transparency which inevitably causes concern but in this case I feel (on balance!) that we are dealing with people of honour and integrity, therefore I feel that we can still sleep soundly !

[RonManager]

I know full well that we are not owned outright by the Liebherr Corporation.

 

Even so, their family and business name is inextricably linked with us and so, therefore, is their reputation as a highly respected worldwide Company.

 

That they would allow Markus' vision to be corrupted (and by association their own) in any way shape or form, would, in my humble opinion, be unthinkable.