2020/21 Finances

[SuperSAINT]

 

[Toadhall Saint]

Just now, SuperSAINT said:

 

👍

[trousers]

Is that £40m loss over and above the £80m (?) loan?

[spyinthesky]

According to the Sunday Times today, Saints lost £117m during the two seasons 2018/19 and 2019/20 which was £2m more than Man City!!!!

However in comparison Everton lost a total of £252m over the same period

Everton also spent £668m on player recruitment over the 6 years Moshiri has been in charge. more than £40m in paying off sacked Managers and eye watering sums on remunerating players & agents. Their wage bill has doubled and wages to turnover is now 89%.

Presumably the debt situation at St Marys is why the recent sale price was 'only' £100m

[SuperSAINT]

 

[SW5 SAINT]

2 hours ago, spyinthesky said:

‘Presumably the debt situation at St Marys is why the recent sale price was 'only' £100m’

Seems a bargain compared to the £2b figured being bandied around as Chelsea’s price…..

Edited 20 March, 2022 by SW5 SAINT
The post I was quoting disappeared

[SaintsLoyal]

I think were 'very' lucky the club was takenover as the debt will probably be paid in a way that will not stop the club from making signings.

No takeover we wouldnt be able to buy players unless we sold from what i can see.

[JRM]

It would be interesting to see some proper analysis of those numbers, seems to be a high number "loss" to be blamed on the pandemic. OK we didn't have ticket sales but TV revenue  continued. 

Any of that linked to our sponsor that didn't really exist? Did LD Sports ever pay us? 

Commercially the club haven't really progressed,  about 50% of the hospitality seats looked empty today for a FA Cup 1/4 final v Manchester City, priced all wrong? 

[The Cat]

22 minutes ago, JRM said:

It would be interesting to see some proper analysis of those numbers, seems to be a high number "loss" to be blamed on the pandemic. OK we didn't have ticket sales but TV revenue  continued. 

Any of that linked to our sponsor that didn't really exist? Did LD Sports ever pay us? 

Commercially the club haven't really progressed,  about 50% of the hospitality seats looked empty today for a FA Cup 1/4 final v Manchester City, priced all wrong? 

Swiss Ramble will no doubt do an in depth analysis of it on twitter in the next couple of days or so. 

Their breakdown of club finances is unparalleled.

[EBS1980]

Kieran Maguire has done a good summary of the main points here in this twitter thread.

 

[Pamplemousse]

For the financially illiterate i.e. me, can anyone sum up whether this is good news, bad news or mixed going forward?

[Chez]

We took out a £90m loan. We have only £28m of that left in in bank. We also owe £8m to other clubs.

We paid £9m in interest over the year.

The Ings and Jan sales helped to reduce the losses.

No one should have any doubts that we need to sell a decent player every other season if we want to spend money on recruitment and not add debt.

 

 

[Chez]

On 21/03/2022 at 21:06, Pamplemousse said:

For the financially illiterate i.e. me, can anyone sum up whether this is good news, bad news or mixed going forward?

considering effects of COVID, they could be worse. The losses the previous year were far far worse - hence the £90m loan. Paying that down is gonna take some doing - and no matter what anyone says, will affect our transfer/wage budget. Doesn't mean we can't operate successfully in both areas, but we kind of need to make/not spend £20m more to pay the annual interest and perhaps £10m off each year

[spyinthesky]

I wonder how we stand in comparison to other clubs, particularly those of a similar size to us and how much risk the new owners are prepared to take with a cash influx to maintain/improve the club?

[LiberalCommunist]

Far more healthy than 18mts ago. I'm okay with those figures. 

[JRM]

3 hours ago, Chez said:

considering effects of COVID, they could be worse. The losses the previous year were far far worse - hence the £90m loan. Paying that down is gonna take some doing - and no matter what anyone says, will affect our transfer/wage budget. Doesn't mean we can't operate successfully in both areas, but we kind of need to make/not spend £20m more to pay the annual interest and perhaps £10m off each year

Since then we've been taken over, new owners could have refinanced or paid off some debt as part of the deal, the low price Gao sold for must have taken into account the debt. 

Crazy amount of interest to be paying. 

[Chez]

2 hours ago, JRM said:

Since then we've been taken over, new owners could have refinanced or paid off some debt as part of the deal, the low price Gao sold for must have taken into account the debt. 

Crazy amount of interest to be paying. 

yep, without that £90m+ debt it would have cost more than the £100m or whatever it was Dragon spent. Refinancing £90m loans isn't easy. If it was you'd have taken that loan out originally. They may well have paid some of it off, but more likely they will let the business do that over time. So long as we are in the Prem its not an issue. Fans just need to be aware that we are not flush with cash. 

 

Edited 23 March, 2022 by Chez

[Holmes_and_Watson]

Not being flush with cash to be considered when we are looking for upgrades to keeper, central defender, a broja replacement and a number 10 across various threads. And a Romeu back up would be nice too. 😊

[Charlie Wayman]

16 hours ago, Chez said:

We took out a £90m loan. We have only £28m of that left in in bank. We also owe £8m to other clubs.

We paid £9m in interest over the year.

The Ings and Jan sales helped to reduce the losses.

No one should have any doubts that we need to sell a decent player every other season if we want to spend money on recruitment and not add debt.

 

 

Although Ralph assured us after the take-overthat we would no longer need to sell players in order to fund the purchase of new ones? 

[Saint86]

I thought the club's debts were taken care off as part of the takeover, hence the cheap price?

[Chez]

5 hours ago, Charlie Wayman said:

Although Ralph assured us after the take-overthat we would no longer need to sell players in order to fund the purchase of new ones? 

he meant, we don't need to sell a player first (in order to have the cash flow) before buying. He didn't mean we can buy a player and then NOT sell another to balance the books.

There is currently £28m remaining in the bank of that £90m loan. We this have cash flow available to buy a player for £20m or so, but the idea that actually have £28m of surplus to spend is a completely different matter. We lost money overall (£14m) last year even after making considerable income on player trading. Income will go up after a non covid hit season, so you'd hope we won't need to make an income from player sales to breakeven (or even make a profit) this time round.

Its pretty obvious that in the recent past that we wanted a player, but the cash flow was not there and then buy the time we sod a player (to make those finds available) that player had gone, and we had to go for our second, third, fourth choice.

[Chez]

3 hours ago, Saint86 said:

I thought the club's debts were taken care off as part of the takeover, hence the cheap price?

What makes you think that? When you buy the ownership (shares) you don't then automatically pay off the company's debts to third party lenders unassociated with the previous owners.The new owners bought the shares. They own the club, but the club still has that bank loan. The new owners may insert their own funds/loans to pay off the bank loan to help save on the £9m annual interest we are paying, or the club simply use some of the business' income to pay the interest/loan down.

The cheap price was because the company carried a £90m debt. If there had been zero debt, the asking price would assumably have been £90m more.

 

Edited 24 March, 2022 by Chez

[Nordic Saint]

23 hours ago, Chez said:

What makes you think that? When you buy the ownership (shares) you don't then automatically pay off the company's debts to third party lenders unassociated with the previous owners.The new owners bought the shares. They own the club, but the club still has that bank loan. The new owners may insert their own funds/loans to pay off the bank loan to help save on the £9m annual interest we are paying, or the club simply use some of the business' income to pay the interest/loan down.

The cheap price was because the company carried a £90m debt. If there had been zero debt, the asking price would assumably have been £90m more.

 

I remember when Kat sold 80% to Gao, the Club had to pay back 100% of their debt to her plus interest before she would let the deal go through.

I still wonder what this means. The implication is that money was to be put aside for Saints' future:

Markus Liebherr 'made provision for Southampton's future' before death | Southampton | The Guardian

 

 

Edited 25 March, 2022 by Nordic Saint

[Chez]

24 minutes ago, Nordic Saint said:

I remember when Kat sold 80% to Gao, the Club had to pay back 100% of their debt to her plus interest before she would let the deal go through.

I still wonder what this means. The implication is that money was to be put aside for Saints' future:

Markus Liebherr 'made provision for Southampton's future' before death | Southampton | The Guardian

 

 

Sure that make sense, as she was both the major (sole?) shareholder and the lender. In this circumstance, Gao is simply the major shareholder (and hasn't loaned the club any money that he would want back), while the lender is a third party - the bank, and unless the bank has some sort of clause requiring full repayment should their be a change of owner/major shareholder, the club would simply continue to have that £90m debt with them and need to pay the interest off etc., as it was doing before the sale.

 

[Matthew Le God]

 

[AlexLaw76]

19 minutes ago, Matthew Le God said:

 

Essentially, we still have to sell big every year.

Great.

[Matthew Le God]

2 minutes ago, AlexLaw76 said:

Essentially, we still have to sell big every year.

Great.

We don't know the impact the new owners will make. These accounts predate them. 

[Tamesaint]

Just now, Matthew Le God said:

We don't know the impact the new owners will make. These accounts predate them. 

Don't spoil Batman's fun. He isn't happy unless he has something to be negative about 

[AlexLaw76]

4 minutes ago, Matthew Le God said:

We don't know the impact the new owners will make. These accounts predate them. 

Fair point.

I guess the summer will the window to tell us

[S-Clarke]

33 minutes ago, AlexLaw76 said:

Fair point.

I guess the summer will the window to tell us

Ralph and the club have already said, and i quote...

'This takeover will enable us to act quicker and bring in new players without having to sell first''

Edited 28 March, 2022 by S-Clarke

[AlexLaw76]

8 minutes ago, S-Clarke said:

Ralph and the club have already said, and i quote...

'This takeover will enable us to act quicker and bring in new players without having to sell first''

Proof is in the pudding....but this has to be more closer to home than the "Gao will take us to the next level" remarks.

[S-Clarke]

2 minutes ago, AlexLaw76 said:

Proof is in the pudding....but this has to be more closer to home than the "Gao will take us to the next level" remarks.

Yeah for sure. I don't see us spending stupid money, our scouting will still have to be spot on...but the biggest change I hope/expect to see is more flexibility. We've had too many years of having to sit down and work out who can be sold before we can even bring in a loan.

Based on those finances though, and they'll prob look even better from this year, I think we're in a really decent place when you take everything into account. We've managed the last 2 years very well.

[Holmes_and_Watson]

I don't expect massive changes this summer. While we may be able to buy before getting an outgoing transfer over the line, I doubt that it would apply to lots of transfers. We're not likely to be bringing in 5 players before selling 1 on. On the plus side, it means that we won't get stuck with a large suqad, draining resources. And that bit of flexibility we do have means we won't miss out on key choices, while waiting for an outgoing deal to be finalised.

[The Cat]

It looks more positive to me than I expected, especially wages to turnover improving a great deal.

Compared to a lot of other clubs our debt is tiny. To think, we could sell Ward Prowse and pay off a massive chunk of it in one go (I know that's not how it works, but goes to show it actually isn't that bad)

Edited 28 March, 2022 by The Cat

[Wurzel]

On 25/03/2022 at 12:59, Nordic Saint said:

I remember when Kat sold 80% to Gao, the Club had to pay back 100% of their debt to her plus interest before she would let the deal go through.

I still wonder what this means. The implication is that money was to be put aside for Saints' future:

Markus Liebherr 'made provision for Southampton's future' before death | Southampton | The Guardian

 

 

Hadn't Kat already converted any outstanding loans due to her into equity before that?

[Chez]

Loss after tax over the last two years is £99m, with COVID to blame for £40m of it, which means we have lost £30m a year. Anyone thinking we don't need to sell an Ings every other year is kidding themselves, although finding a few  more £5m Livramento's would certainy help.