2019/20 Southampton accounts

[Matthew Le God]

- Large net loss explained by extenuating circumstances i.e timing of transfer window moved to beyond accounting period, Covid impact of no crowds

- Large loan taken out last year to help with Pandemic costs is not repayable until 2025

 

https://www.southamptonfc.com/news/2021-01-12/st-marys-football-group-financial-results-2019-20

 

Edited 12 January, 2021 by Matthew Le God

[Archers Road Stand]

Grim. 

[Give it to Ron]

6 minutes ago, Archers Road Stand said:

Grim. 

Listen to the interview 

[The Curse of St Mary's]

Good thread on the topic 

https://twitter.com/KieranMaguire/status/1349071711757602817?s=19

[Jimmy_D]

Not great, but expected, and I'd imagine we're a long way from being the worst hit club.

Looks like we're in a reasonable place to deal with it, for the moment at least.

[Saint Garrett]

Bit of a mess that, all the KPIs are pretty demoralising, but not unexpected given the current situation.

Not expecting any money to be spent this month.

Club definitely needs investment. Whether that’s through selling players or externally...

[S-Clarke]

I'd like to see a club who posts financial growth over the last period. We are no different to other clubs having had to take out loans to tide us over.

Match day income is the blood of clubs, we've been without a consistent match day income for what must be 10 months now.

Sad as it is to say, but we do have a couple of very sellable players who could turn that loss around in 24 hours, that may be what we have to do at some stage and then go again (as we do so many times).

[EBS1980]

Good summary in this thread from Kieran Maguire 

[Dusic]

9.14% on that substantial loan. Ouch, and relegation before that is due would be disasterous.

Listening to the interview Steele makes it sound like in a non Covid time we could have flogged Lemina, Hoedt, Elyounoussi etc for transfer fees. I would suggest that would not have been the case.

Also says if we can generate revenue in the summer market we can then reinvest it - but who do we have to sell who isn't a key player who is actually worth anything?

Edited 12 January, 2021 by Dusic

[Saint Garrett]

Think it’s highly likely that Ings will be off in the summer if he doesn’t sign a new contract, might get £30/40m for him this summer.

Vestergaard now has a sell on value, might get nominal fees for Hoedt, Lemina and Elyounoussi, but probably more important for the club to get them off the wage bill. 

[Archers Road Stand]

12 minutes ago, Dusic said:

Listening to the interview Steele makes it sound like in a non Covid time we could have flogged Lemina, Hoedt, Elyounoussi etc for transfer fees. I would suggest that would not have been the case.

As the Summer transfer window in 2019 proved. 🤣

[Dusic]

2 minutes ago, Saint Garrett said:

Think it’s highly likely that Ings will be off in the summer if he doesn’t sign a new contract, might get £30/40m for him this summer.

Vestergaard now has a sell on value, might get nominal fees for Hoedt, Lemina and Elyounoussi, but probably more important for the club to get them off the wage bill. 

With a year left and a clear indication from Ings that he wasn't going to sign a new contract, his value would plummet.

Teams would know that we had to sell him, and in the end I think he would go for £20m tops because we would have an awful negotiating position, like with Hojbjerg.

Hopefully he does sign!

[Hodgey]

We’ve all wondered what the long term damage would be  of that disaster of a transfer period where we spend on Hoet, Elynoussi, Carrillo, Lemina, Gunn and new Forster contract. £80m fees and another £15-£20m in wages - £100m gone there. At least recent windows have been much improved - equally costly has been the failure to get rid of any of them (even pre Covid)

[Matthew Le God]

1 minute ago, LeG said:

Ings is going isnt he

The loan payments (albeit with high interest rate) don't start until 2025 and most of the other issues are resolved once the pandemic is over.

[qwertyell]

2 minutes ago, Matthew Le God said:

The loan payments (albeit with high interest rate) don't start until 2025 and most of the other issues are resolved once the pandemic is over.

Have they settled on an end date yet?

[trousers]

8 minutes ago, LeG said:

Ings is going 

Source?

[SuperSAINT]

10 minutes ago, LeG said:

Ings is going isnt he

The contract situation isn’t great, is it?

[Matthew Le God]

Just now, qwertyell said:

Have they settled on an end date yet?

Final details being drawn up

[bpsaint]

1 hour ago, EBS1980 said:

Good summary in this thread from Kieran Maguire 

Christ, that’s pretty damned awful reading. Our wage to turnover percentage is not sustainable in the slightest - and I’m actually surprised at just how much matchday revenue is worth to us.

Seems we’re going to have to sell just to stand still without outside investment. Relegation with that loan hanging over us would be a disaster.

[Saint Garrett]

13 minutes ago, LeG said:

Ings is going isnt he

Gut feeling say yes. I’d love to have an owner who might stick his hand in his pocket. 

[trousers]

7 minutes ago, bpsaint said:

Relegation with that loan hanging over us would be a disaster.

I've got an inkling we may avoid relegation this season

(Next season however.... )

[nta786]

That was very grim reading but accounting profits are somewhat manipulated anyway as inferred by Semmens.

However, until other clubs publish theirs or we get a comparison I will reserve any anxiety just yet.

Although the £80m bank loan and wages to turnover ratio was pretty damning!!! 

Edited 12 January, 2021 by nta786

[JRM]

Does the report break down commercial income? It's one thing to try to blame lack of match day revenue but let's be honest....

We had a fraud shirt sponsor who I doubt ever paid us what they owed. Anyone followed the progress of LD Sports? 

Replica shirt production/ sales have been a shambles two years in a row.  Still at least we're closing the West Quay store to save some pennies. 

Wages eye watering wastage , at least some of those dud contracts are coming towards the end, need to clear out Lemina,  Hoedt rec, let's not forget the greatest financial scandal of all time at SFC, Guido Carillo must have cost a fortune in transfer fee / wages, probably as much as the Liebherrs paid to buy the club. 

The interest on the new loan will cost a fortune eating away at income that could have instead been invested in the team. 

Finishing 11th last year would have increased prize money to offer some of the loss of ticket revenue year on year. 

[Harry_SFC]

Can only see us having to sell a couple of key players in the summer. I think it'll most likely be Ings and Vestergaard. Providing JV keeps up his good form, I'd like to think we could get £50 million for the two.

The fact the owner contributes absolutely nothing and the wages are so high compared to our revenue, this was always going to happen - especially when you're in the midst of a pandemic.

[Saint Garrett]

Without knowing Long’s contract, his renewal seems even more odd now. 
 

Regarding the shirt sponsor mentioned above, if they didn’t pay, that doesn’t mean the revenue wouldn’t have been recognised. Potentially.
 

Only £3m seemed to relate to match day income, which in the grand scheme of things, isn’t massive. 

[SuperSAINT]

10 minutes ago, Harry_SFC said:

Can only see us having to sell a couple of key players in the summer. I think it'll most likely be Ings and Vestergaard. Providing JV keeps up his good form, I'd like to think we could get £50 million for the two.

The fact the owner contributes absolutely nothing and the wages are so high compared to our revenue, this was always going to happen - especially when you're in the midst of a pandemic.

Bertie contract is up, too.

[Matthew Le God]

7 minutes ago, SuperSAINT said:

Bertie contract is up, too.

He'd have no value in the summer as no signing of contact means he leaves for free this summer.

[Dusic]

1 minute ago, Matthew Le God said:

He'd have no value in the summer as no signing of contact means he leaves for free this summer.

And would cost us to replace, when arguably we already need to sign a full back with Bertrand obviously still here.

[SuperSAINT]

3 minutes ago, Matthew Le God said:

He'd have no value in the summer as no signing of contact means he leaves for free this summer.

I know.  I was just referring to the saving on wages.

[Saint_clark]

3 minutes ago, SuperSAINT said:

I know.  I was just referring to the saving on wages.

As others have said unless we get someone in on a free we'll be paying out more than his wages are worth on a transfer fee plus the new players wages anyway. 

[Lighthouse]

20 minutes ago, Saint Garrett said:

Without knowing Long’s contract, his renewal seems even more odd now.

It does but then we must have been fairly confident of something to offer it in the first case. Especially when you consider that at the end of the window we decided to fork out for Walcott's wage too. Salisu, KWP and Diallo all cost money too, if we were really desperate we'd be scraping around for another Danso or two.

 

Someone, somewhere at the club is/was clearly a lot more comfortable with this than we are.

[Saint_clark]

The Diallo and Salisu signings could indicate we'll be cashing in on a combination of JWP/Romeu/Vestergaard/Bednarek.

[Saint Garrett]

5 minutes ago, Lighthouse said:

It does but then we must have been fairly confident of something to offer it in the first case. Especially when you consider that at the end of the window we decided to fork out for Walcott's wage too. Salisu, KWP and Diallo all cost money too, if we were really desperate we'd be scraping around for another Danso or two.

 

Someone, somewhere at the club is/was clearly a lot more comfortable with this than we are.

That’s my hope too. Normally we sell before we buy too, so there must be some money somewhere. Hopefully it’s more to do with the accounting period more than anything else. 
 

Loan is a worry though. 

[Matthew Le God]

17 minutes ago, SuperSAINT said:

I know.  I was just referring to the saving on wages.

It doesn't save money. We'd need to buy a replacement and pay him. Keeping Bertrand would save money.

[bpsaint]

Just read through everything again now my brains a bit more switched on - didn’t notice that 9.14% was per annum. £7.2 million a year for the next 4 years, that’s a ridiculous amount of money.

When it says the loan is secured via fixed and floating charges against the assets of the company I guess that means the players, stadium and training ground?

[Dark Munster]

9.14% interest ... WTF??

[Noodles34]

5 hours ago, Dark Munster said:

9.14% interest ... WTF??

Couldn’t they tart a credit card, like Martin Lewis suggests on moneysavingexpert.com? 
they really should talk to him, he’d have a wank fest over that loan interest 

 

and I was under the impression we had a rich Chinese owner, so we’ll be fine. 

[Noodles34]

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[LGTL]

We are one relegation away from being absolutely fucked. Like 99% of the league I suppose. 

[Jeremy Corbyn]

1 hour ago, Noodles34 said:

Couldn’t they tart a credit card, like Martin Lewis suggests on moneysavingexpert.com? 
they really should talk to him, he’d have a wank fest over that loan interest 

 

and I was under the impression we had a rich Chinese owner, so we’ll be fine. 

Problem with Chinese money is you have to pay 100% tax to take it out the country, so 9% is a snip.

[SKD]

12 hours ago, LeG said:

Ings is going isnt he

I highly suspect in the summer, yes (unless we get into champions league.. unrealistic).

Wether we get 20m or 40m will depend on if he signs a contract. It could be that he signs and we still only get 20m. 

As I understand it, currently playing hard ball on release clause which is all that’s outstanding for him to sign it.

Only my opinion, but can’t see him sticking around if he’s pushing so hard for a get out clause. 

I could easily see this coming summer being similar to that of 2013 when our squad was decimated. 

[SaveloyMush]

8 hours ago, Dark Munster said:

9.14% interest ... WTF??

Reflective of the level of risk.

[Noodles34]

31 minutes ago, SKD said:

I highly suspect in the summer, yes (unless we get into champions league.. unrealistic).

Wether we get 20m or 40m will depend on if he signs a contract. It could be that he signs and we still only get 20m. 

As I understand it, currently playing hard ball on release clause which is all that’s outstanding for him to sign it.

Only my opinion, but can’t see him sticking around if he’s pushing so hard for a get out clause. 

I could easily see this coming summer being similar to that of 2013 when our squad was decimated. 

Ings is not leaving, he's a local lad that supports Saints, he hates the skates, he is grateful that we took a chance on him and he owes us for that and he is not greedy.

[SKD]

15 minutes ago, Noodles34 said:

Ings is not leaving, he's a local lad that supports Saints, he hates the skates, he is grateful that we took a chance on him and he owes us for that and he is not greedy.

Okay mate, you believe that if it’s makes you feel better.... 

(FWIW, I think he is happy and enjoys playing here, but he will leave if the right opportunity arises. Which at the value his side are pushing for, it will). 

[Noodles34]

2 hours ago, SKD said:

Okay mate, you believe that if it’s makes you feel better.... 

(FWIW, I think he is happy and enjoys playing here, but he will leave if the right opportunity arises. Which at the value his side are pushing for, it will). 

you missed the sarcasm mate, the happy clappers would have you believe that, as far as i think, he'll go for better money and a bigger club, just like 99% of the others

[Chez]

16 hours ago, Matthew Le God said:

The loan payments (albeit with high interest rate) don't start until 2025 and most of the other issues are resolved once the pandemic is over.

If we don't make any loan repayments until 2025, the debt would rise to £122m. I would assume we will be trying to reduce that figure over the next five years somehow, which means spending less than we bring in.

[nta786]

28 minutes ago, Noodles34 said:

you missed the sarcasm mate, the happy clappers would have you believe that, as far as i think, he'll go for better money and a bigger club, just like 99% of the others

I think so too.

But why can’t we have the 1%... Vardy stays loyal to Leicester and yet we may not be able to convince Ings  

[the saint in winchester]

Wow, this was a sobering read.

So it seems whereas some clubs laid off staff, or furloughed them, we carried on paying everyone in full. I thought that meant we were in good shape financially, but now it seems we simply took out an onerous hardship loan. Although the loan is only repayable in 2025, we have to pay 9% interest on that annually for the next 5 years (c.£8m interest). With no in-stadium support, we are looking at TV revenue and merchandise, primarily. Unless football can get a better deal off TV companies, clubs are in trouble.

For us, the tables are turned. We now NEED to sell Ings, Vestie and JWP in the next 5 years to realise £80M to repay the loan. This is business. N'Dululu, Tella and co are going to be our future. This is a step we need to take, and we will grow again. Lots of clubs will be going through this organic change too, so we won't be alone. We will rise, selling our young players and bringing through new ones. In fact, we'll be better than most clubs through our academy.

Unless a new owner appears and has £100M to pay off our debts? Unlikely. Fasten your seatbelts, then ...

[Chez]

15 hours ago, Matthew Le God said:

It doesn't save money. We'd need to buy a replacement and pay him. Keeping Bertrand would save money.

not necessarily. Bertrand will want a pretty large wage and maybe a signing on fee. If we let him go and then signed another free contract, perhaps someone wanting less wages, Omar Richards for example, then that could save us money. Doing that though, is easier said than done and obviously might be detrimental of the quality of the side. 

[Chez]

6 minutes ago, the saint in winchester said:

Wow, this was a sobering read.

So it seems whereas some clubs laid off staff, or furloughed them, we carried on paying everyone in full. I thought that meant we were in good shape financially, but now it seems we simply took out an onerous hardship loan. Although the loan is only repayable in 2025, we have to pay 9% interest on that annually for the next 5 years (c.£8m interest). With no in-stadium support, we are looking at TV revenue and merchandise, primarily. Unless football can get a better deal off TV companies, clubs are in trouble.

For us, the tables are turned. We now NEED to sell Ings, Vestie and JWP in the next 5 years to realise £80M to repay the loan. This is business. N'Dululu, Tella and co are going to be our future. This is a step we need to take, and we will grow again. Lots of clubs will be going through this organic change too, so we won't be alone. We will rise, selling our young players and bringing through new ones. In fact, we'll be better than most clubs through our academy.

Unless a new owner appears and has £100M to pay off our debts? Unlikely. Fasten your seatbelts, then ...

is there no way out of this without selling key players?

Could we retain the ones we want, but just not spend any money at all for three years on any new signings. I am guessing not if the ones you want keep asking for pay rises or want to leave anyway.