Financial Overview of Southampton

[Grant Walker]

Hi Saints!

For those interested, I've created a financial dashboard of Southampton's finances from 2016 to 2019. You can find it through the link below. 

Southampton Financial Dashboard

Feel free to get in touch with any questions/comments. 

All the best and hopefully not too long until we can all go back to watching some live football! 

[Grant Walker]

Hi Saints!

For those interested, I've created a financial dashboard of Southampton's finances from 2016 to 2019. You can find it through the link below. 

Southampton Financial Dashboard

Feel free to get in touch with any questions/comments. 

All the best and hopefully not too long until we can all go back to watching some live football! 

[SuperSAINT]

Cheers for doing this, Grant.  What are your key conclusions?

[Maggie May]

Just sock it to me, doc! Is it good news or bad news?

[SaintJackoInHurworth]

By financial year 2019 do you mean year up to 2019, year commencing 2019 or is this based on a calendar year?

From what I can see, while 2019 was a bad year, it only cancels out profit made in 2017 and still leaves us with a cumulative profit over those four years, albeit partly/largely funded by player sales.

[Cartman]

I have an issue with this... player trading here isn't really "trading" but player sales, player purchases are being grouped under operating expenses. Truth is, our loss in 2018-19 can largely be put down to spending the Van Dijk money that we didn't spend in 2017-18 (hence the profit that year despite the large drop in revenue excluding player sales). In Swiss Ramble's analysis on twitter, our EBITDA for 2017-18 was £3m and for 2018-19 £-4m, so when excluding player trading (both sales and purchases) we are more or less breaking even.

Edited 4 August, 2020 by Cartman

[Grant Walker]

5 hours ago, Cartman said:

I have an issue with this... player trading here isn't really "trading" but player sales, player purchases are being grouped under operating expenses. Truth is, our loss in 2018-19 can largely be put down to spending the Van Dijk money that we didn't spend in 2017-18 (hence the profit that year despite the large drop in revenue excluding player sales). In Swiss Ramble's analysis on twitter, our EBITDA for 2017-18 was £3m and for 2018-19 £-4m, so when excluding player trading (both sales and purchases) we are more or less breaking even.

The analysis has been taken directly from the financial statements of Southampton.

Player Trading is, as you say it, profit on player sales. Player purchases and player sales are most certainly not being grouped under operating expenses. Player purchases are amortised through the income statement based on the term of the contract for which the player was signed. And, whilst EBITDA is a nice measure to monitor cash flow, it is critical to include player trading (the profits from player sales), as well as amortisation because that reflects the cost of making transfers, which is a core component to running the business. If I run a business that is profitable, but excludes any costs from investing (of which amortisation and depreciation represent), then I will be continously required to invest more capital into that business. 

Ultimately, over the 4 year period, the club has done pretty well from a profitability perspective. Nevertheless, FY2019 should make for some concern, particularly if the profit from player trading dries up, given this has historically propped up the overall profitability of the club. Club has recognised this and is now making inroads in growing its commercial revenue stream, given that matchday income and broadcasting income have plateaued.