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CLUB ACCOUNTS: 2013/14 - Saints reveal first profit

Saint-Armstrong

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The9

The9

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Promoted teams (straight back down in bold):

2013-14: Leicester, Burnley, QPR

2012-13: Cardiff, Hull, Crystal Palace

2011-12: Reading, Saints, West Ham

2010-11: QPR, Norwich, Swansea

2009-10: Newcastle, West Brom, Blackpool

2008-09: Wolves, Birmingham, Burnley

2007-08: West Brom, Stoke, Hull

2006-07: Sunderland, Birmingham, Derby

2005-06: Reading, Sheffield United, Watford

2004-05: Sunderland, Wigan, West Ham

2003-04: Norwich, West Brom, Crystal Palace

2002-03: Portsmouth, Leicester, Wolves

2001-02: Man City, West Brom, Birmingham

2000-01: Fulham, Blackburn, Bolton

1999-00: Charlton, Man City, Ipswich

1998-99: Sunderland, Bradford, Watford

1997-98: Nottingham Forest, Middlesbrough, Charlton

1996-97: Bolton, Barnsley, Crystal Palace

 

Not happened since the three promoted teams in 1997 went straight back down. I still fancy one of Hull or Sunderland to drop in, Burnley seem to at least be having a go.

 

It's interesting looking at that how the perception has always been that promoted teams are up against it in the Premier League because they're all playing catchup, there's a huge gulf between the PL and the Championship, and other such clichés, but the actual statistics suggest otherwise. In the last six completed PL seasons, only 5 of the 18 teams relegated had been promoted the previous season.

 

The drop off in promoted teams going back down since 2007 correlates almost perfectly with the rise in Parachute Payments, which you would think would suggest that teams who come up are more likely to have been able to retain Premier League players from a previous relegation, helping them come back quicker and with proven Prem players.

 

However, when you look at it there's no particular correlation in the teams promoted being the same ones who'd been relegated during the Parachute period - there are loads of teams getting up without parachute money (including Saints) - only QPR, Palace, West Ham, Newcastle and West Brom in the last 7 years have "rebounded" immediately.

 

What can be seen is that from 2002/3-2006/7 there was definitely a step up, as all but one of those five seasons 2 of the promoted sides came back down. Which just annoys me more about Portsmouth's fluke escape in 2003.

 

I can only assume that having Prem parachute payments can create as many problems as it solves - teams are able to shift on their best players when relegated (and often can't prevent it), but they also potentially get stuck with less motivated players at Prem costs and the parachutes get sucked up by wages (which to be fair was always the point of them). That makes it more difficult to regenerate a squad and turn around the losing habit.

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stevegrant

stevegrant

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I can only assume that having Prem parachute payments can create as many problems as it solves - teams are able to shift on their best players when relegated (and often can't prevent it), but they also potentially get stuck with less motivated players at Prem costs and the parachutes get sucked up by wages (which to be fair was always the point of them). That makes it more difficult to regenerate a squad and turn around the losing habit.

Only two of the top 9 in the Championship are currently receiving parachute payments, and one of those (Wolves) has been down to League One since starting them.

 

Teams currently receiving parachute payments (year 1/2 payments are double the year 3/4 payments):

Year 1: Norwich (4th), Fulham (20th), Cardiff (14th)

Year 2: Wigan (22nd), Reading (19th) - QPR since re-promoted

Year 3: Bolton (17th), Blackburn (10th), Wolves (8th)

Year 4: Birmingham (15th), Blackpool (24th) - West Ham since re-promoted

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The9

The9

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Only two of the top 9 in the Championship are currently receiving parachute payments, and one of those (Wolves) has been down to League One since starting them.

 

Teams currently receiving parachute payments (year 1/2 payments are double the year 3/4 payments):

Year 1: Norwich (4th), Fulham (20th), Cardiff (14th)

Year 2: Wigan (22nd), Reading (19th) - QPR since re-promoted

Year 3: Bolton (17th), Blackburn (10th), Wolves (8th)

Year 4: Birmingham (15th), Blackpool (24th) - West Ham since re-promoted

 

It doesn't help the bouncebackability quotient when you've got the likes of Wigan and (particularly at the moment) Blackpool siphoning the money up for whatever purpose with no indication of it on the pitch.

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Dark Munster

Dark Munster

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Sadly that is almost certain to be the outcome, the football authorities seemed to have lost the backbone that nailed leeds and luton to the wall and now all you have to do is ***** and moan a bit and they bend the rules.

The DCFSBs being a prime example. Things are certainly not the same since that old bastard Mawhinney retired.

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Saint-Armstrong

Saint-Armstrong

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Operating profit and *actual* profit are significantly different things.

 

Yeah, they've spun it. They're operating at a profit, but the directors who took on loans to buy the club have put the company in the 'loss' section for the amount of interest accrued on the loans - apparently.

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martel

martel

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What is the total debt figure?

 

I noticed today that Reading have been fined 30,000 pounds for the loan they took out with Rabic(sorry that may be mis-spelt), i noticed we had a loan with this off shore company as well, is that what the extra money from the owner is for? perhaps one of you better informed guys could help me out with this.

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Redslo

Redslo

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As if the Football League would have the balls to do that :lol:

 

They'll come to some sort of convenient agreement where QPR pay a tiny fine in exchange for not taking legal action against the FL (which the FL couldn't afford to defend) and it all quietly goes away...

 

As long as we are making predictions, I predict you are wrong. The FFP rules in the Football League are now tied into the rules for the Premier League and I just do not think they are going to let them go away so easily. The FL could afford to defend the rules particularly if they use the solidarity payments from the Premier League. But we shall see.

 

Not really bothered about the tone of the aritcles, what I would say is I guarantee 99% of Newcastle fans would swap owners with us and that for me sums up the situation. We are clearly in good committed hands and I for one hope she stays oner of the club for a very very long time.

 

I find it difficult to visualize the 1% of the Newcastle fans who would prefer their current owner. Or is 1% of Newcastle's fan base mentally ill? That probably explains it.

 

Yes there are no outstanding charges

 

 

http://wck2.companieshouse.gov.uk//compdetails

 

Link doesn't work.

 

Couple of things I saw in various articles that surprised me

 

a) Cortese got £450,000 severance pay (not bad) (daily Star)

b) the PL puts a levy of 4% on every player transfer..... (daily Mail)

 

Could you provide links. If the 4% refers to training or solidarity payments I am not asking for a link for that.

 

Jovetic would still have missed out, as the squad spaces they had reduced by the sanction were all for home-grown players. :lol:

 

One of the missing slots was for a non-home grown player. They were cut from 25 to 21 players and from 8 to 5 homegrown players.

 

http://www.independent.co.uk/sport/football/european/uefa-sanctions-against-manchester-city-for-breaching-ffp-watered-down-9529251.html

Edited by Redslo
to put all my responses together to spare everyone multiple posts.
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stevegrant

stevegrant

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The FFP rules in the Football League are now tied into the rules for the Premier League

Not yet, they're not. The Football League's FFP regulations were vastly different to the Premier League's when they first introduced them, with much tighter loss restrictions - financial penalties kicked in after an £8m loss (or £3m if the owner(s) don't inject equity) in the FL compared to the rolling £105m over 3 years permitted by the PL. In addition, the PL refused to take any role in collecting fines levied by the FL to clubs who gained promotion off the back of overspending, meaning that if a club got promoted and then never went back down, the FL would never see that fine money.

 

and I just do not think they are going to let them go away so easily.

Since Brian Mawhinney stood down as chairman, the Football League has been seen as a bit of a pushover when it comes to sanctioning clubs for serious breaches. Pompey were spared a points deduction for failing to satisfy an agreed CVA, despite a precedent when other clubs committed a similar offence, Sunderland fielded an ineligible player in the League Cup (the FL's competition) but rather than be forced to replay the game or be kicked out of the competition (as the FA would do in the FA Cup in all circumstances), they were allowed to carry on, and got to the final.

 

The FL could afford to defend the rules particularly if they use the solidarity payments from the Premier League. But we shall see.

The solidarity payments will have been budgeted for by each of the 72 clubs well in advance, there's no way they could afford to let the league **** it away in the High Court.

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Window Cleaner

Window Cleaner

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The reports show the profit till the end of June, was that not before other players sold as with chambers and Lovern

 

As I worked out the other day the accounts would have included the sales of Lambert and Shaw but the 3 afterwards and most if not all of the signings would be shown in next year's accounts. So 33 million £ profit including 32 million £ of player sales. We've obviously paid off some stuff because otherwise it means that last year we made sort of zilch on trading without player sales.

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Wurzel

Wurzel

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As I worked out the other day the accounts would have included the sales of Lambert and Shaw but the 3 afterwards and most if not all of the signings would be shown in next year's accounts. So 33 million £ profit including 32 million £ of player sales. We've obviously paid off some stuff because otherwise it means that last year we made sort of zilch on trading without player sales.

 

 

Not sure when transfers in or out are/were applied but .......

Profit before player trading increased to £25.3m (2013: £8.6m).

 

Read more at http://www.saintsfc.co.uk/news/article/20150330-southampton-financial-results-2013-14-2367070.aspx#F4OCOzSYzdsfjkqA.99

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Window Cleaner

Window Cleaner

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Not sure when transfers in or out are/were applied but .......

 

Right, player sales in May+ June 2014 have obviously been offset by player purchases in July and August 2013 then, so we used part of the money from the Shaw and Lambert sales to pay for Osvaldo and Victor then, in 32 million, out 23 million which gives you roughly the difference between profit before and after player trading.

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doddisalegend

doddisalegend

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Very interesting to see we owe Vibrac Corporation £19m. Reading have just received a fine for trading with them as they have links to other premier league clubs. This breaks football league regulations. Could Saints be about to be fined too?

 

Well saints, unlike Reading, aren't in the football league so I guess it doesn't apply to us...

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VectisSaint

VectisSaint

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Very interesting to see we owe Vibrac Corporation £19m. Reading have just received a fine for trading with them as they have links to other premier league clubs. This breaks football league regulations. Could Saints be about to be fined too?

Depends if Premier League regulations are the same, and who was the first of the three PL Clubs to take out a loan with Vibrac (I don't think we were first because Naughty Nic had poured scorn on other clubs for going down this route). This was a Football League disciplinary decision so if not it is not applicable to Saints. The fine by the way was suspended, and will not be enforced if there are no further breaches before May 2016. Unfortunately for Reading they do have to pay costs of £39k, laughable really that the costs are bigger than the fine.

 

By the way we don't owe Vibrac anything, the loan was paid off by KL's replacement loan, maybe this was why it was paid off early, because of its toxicity. Reading don't owe them anything either.

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Matthew Le God

Matthew Le God

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Posted (edited)

 

David Bick was hired by Nicola Cortese as a consultant for Saints. It was Bick that read a statement to the press when Markus Liebherr died...

 

http://www.dailyecho.co.uk/sport/8339125.A_tribute_to_Markus___David_Bick/

 

So he is hardly an independent financial expert in regards to passing comment on Saints. Sky make no mention of this and he may have an ulterior motive with his connections to Cortese.

 

Post recession, can you trust a "financial expert" who wears skull and crossbones braces...?

 

DavidBick_3146225.jpg?20140523091532

 

In fact, can you ever trust a man that wears skull and crossbones braces?

Edited by Matthew Le God
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Colinjb

Colinjb

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David Bick was hired by Nicola Cortese as a consultant for Saints, so he is hardly an independent "financial expert". Sky make no mention of this and he may have an ulterior motive.

 

Hmmmmm.

 

However, Bick said he would like to wait and see Southampton’s fully published accounts and questioned why the club, who raised close to £100m by selling the likes of Adam Lallana, Dejan Lovren and Luke Shaw last summer, borrowed money from owner Katharina Liebherr.

 

Sales that occurred after the time frame these figures are relevant for....

 

Very informed.

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Redslo

Redslo

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While it is theoretically possible that there is something wrong with Southampton's financials, this guy's reasons for concern do not seem valid. He claims that Southampton reported "a large cash profit" and then questions why a loan would have been necessary. In fact, Southampton reported a large paper profit. Many expenses would have been paid in cash, but those costs, for accounting purposes would have been amortized or depreciated over a number of years. On the other hand, profits from player sales may have been booked when made but the money might not come in until later.

 

The training facility, for example, undoubtedly resulted in millions of pounds of cash spent in 2013-2014, but that cost would have to be depreciated over many years--in effect artificially shifting the profit into the year the cash was spent. Loans may very well have been necessary to cover the expenses when they occurred.

 

Also, as I stated before, given the FFP rules, it may make sense to characterize a transaction as a loan from the owner even if she plans to convert it into equity later because the FFP rules only allow a limited amount of such conversions to offset losses in any given year. Better to hold off on the conversion to a year where there are losses to offset rather than do it in a year where a profit is shown.

 

I cannot speak to whether Blick is biased against current management due to his association with prior management.

Edited by Redslo
typos
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VectisSaint

VectisSaint

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Hmmmmm.

 

 

 

Sales that occurred after the time frame these figures are relevant for....

 

Very informed.

This is not a quote from Blick, it is how Sky have interpreted his comments. His actual comments are quoted. What he said is reasonable, he just says cannot fully judge until the accounts are actually filed/published. Apparently they have not yet been so filed, everything we know is based purely on the summary in the Echo and on the OS. However, my understanding is that KL made further loan to pay off the Vibrac loan, which makes sense, especially as there may be some toxicity in that loan due to the conflict of interest due to them making loans to 3 PL Clubs (though how that is different to, lets say, Barclays making a loan to 2 or more clubs beats me).

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Redslo

Redslo

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This is not a quote from Blick, it is how Sky have interpreted his comments. His actual comments are quoted. What he said is reasonable, he just says cannot fully judge until the accounts are actually filed/published. Apparently they have not yet been so filed, everything we know is based purely on the summary in the Echo and on the OS. However, my understanding is that KL made further loan to pay off the Vibrac loan, which makes sense, especially as there may be some toxicity in that loan due to the conflict of interest due to them making loans to 3 PL Clubs (though how that is different to, lets say, Barclays making a loan to 2 or more clubs beats me).

 

I am only speculating here but maybe the terms of a loan from Vibrac give them some kind of power that the football powers that be view as being equivalent to management authority and it is against the rules to have management authority over more than one club.

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supersonic

supersonic

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Depends if Premier League regulations are the same, and who was the first of the three PL Clubs to take out a loan with Vibrac (I don't think we were first because Naughty Nic had poured scorn on other clubs for going down this route). This was a Football League disciplinary decision so if not it is not applicable to Saints. The fine by the way was suspended, and will not be enforced if there are no further breaches before May 2016. Unfortunately for Reading they do have to pay costs of £39k, laughable really that the costs are bigger than the fine.

 

By the way we don't owe Vibrac anything, the loan was paid off by KL's replacement loan, maybe this was why it was paid off early, because of its toxicity. Reading don't owe them anything either.

 

The OS States we still owe the money and no reports suggest the loan from KL has paid this off.

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VectisSaint

VectisSaint

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The OS States we still owe the money and no reports suggest the loan from KL has paid this off.

They have. Last 2 bullets on the OS:

As of the balance sheet date, the financial statements show a total debt position of approximately £50m, of which circa £19m is owed to Vibrac

Shareholder demonstrated on going support and commitment to the club by injecting further loan of £20m after the year-end

 

The Echo report stated:

The loan taken out in September 2012 from the Vibrac company will stand at £19m in the accounts, but since June 30 Liebherr has contributed a further £20m loan herself that will replace that and be used to fund previous player trading and capital spending.

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supersonic

supersonic

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They have. Last 2 bullets on the OS:

As of the balance sheet date, the financial statements show a total debt position of approximately £50m, of which circa £19m is owed to Vibrac

Shareholder demonstrated on going support and commitment to the club by injecting further loan of £20m after the year-end

 

The Echo report stated:

The loan taken out in September 2012 from the Vibrac company will stand at £19m in the accounts, but since June 30 Liebherr has contributed a further £20m loan herself that will replace that and be used to fund previous player trading and capital spending.

 

As per the OS, the money is still owed to Vibrec. I'll take their sentance over the Echo.

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Redslo

Redslo

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As per the OS, the money is still owed to Vibrec. I'll take their sentance over the Echo.

 

But that statement is as of June 30, 2014. The 20 million loan could have been used to pay off Vibrec or maybe not. The Echo's report doesn't say that the loan had been paid off but it can be interpreted as expressing an intent to pay it off. Or it could have been an intent to pay off the money owed for already incurred expenses that had not yet come due--like the money that was owed for past transfers. We simply have no way of knowing until we see the report and, quite possibly, there will be no way of knowing even then absent inside information or newly announced information from the club.

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