The Great Southampton Experiment

Ninety five million pounds.

That is the amount pocketed by Southampton FC on players sold this summer transfer window. Adam Lallana, Rickie Lambert, Calum Chambers, Dejan Lovren and Luke Shaw, characters that made up a fun Southampton side that finished 8th last season.  For a club that as recently as five years ago was faced with their parent company being put in administration, it’s a staggering amount of money considering that the majority of these players in some sort of way has been through the tough times with the club. Lallana and Lambert in particular have been part of Southampton for numerous years, with Lallana being brought through the system as a teenager and Lambert moving on from Bristol Rovers in 2009.

What makes the selling of these players so interesting (besides you know, the amount of profit they got from the sales) is how they all represent different stages of a footballer’s career. Luke Shaw and Calum Chambers represent the early periods of the hypothetical “age curve”. Luke Shaw, England’s left back of the future, is just 19 years old. Calum Chambers is the same age, a converted defender from his earlier days as a central midfielder. Both are young and potential laden defenders who years down the road may both play together for the English national side (Shaw already represented England at the World Cup this summer).

Then you have Adam Lallana and Dejan Lovren, players who lean more towards the prime years of production. Lovren starred in arguably the best CB duo in the Premier League last season, with Mauricio Pochettino installing a high pressing offside trap. Lallana had a breakout season statistically as Southampton’s #10 in a 4-2-3-1, and his defensive data profile could even lend itself into working as a hybrid between an attacking midfielder and a central midfielder. Just purely on profits alone from player, it was as successful a transfer summer window as it could be. In many ways it’s reminiscent of the average person booting up Football Manager 2014 and selling players for crazy profits.

And Southampton have reimbursed a portion of those player profits with the signings of Graziano Pelle, Fraser Forster, Shane Long (hold you laughter) and Dusan Tadic, who was by far the best playmaker in the Eredivisie last year. Assuming he translates similar statistical production into the EPL this season, Southampton found themselves an absolute gem for a portion of the money they got by selling Lallana. At the moment, the club has kept Morgan Schneiderlin and Jay Rodriguez, two instrumental players to their success a season ago though Rodriguez is still recovering from the knee injury he suffered against Manchester United last season.

Alas if only that was the end of it, cause the massive player profits generated by Southampton this summer is part of the financial question surrounding Southampton. Until recently, Southampton had a crumbling financial infrastructure, expertly detailed by the wonderful blog Swiss Ramble. Southampton’s declining revenue, combined with their lack of profits and unfortunate timing of their relegation from the English Premier League in 2005 resulted in Southampton only making £14.9 million despite having over £10 million in player profit sales.

In 2008, Southampton’s holding company produced a net debt of £27.6 million and although there weren’t figures released in 2009 because of Southampton’s parent company being put in administration, estimates for that year pegged them at £30 million. I’m not a financial expert nor do I pretend to play one on the internet, but those are gruesome financial numbers. The saving grace for Southampton was Markus Liebherr purchasing the club in 2009 and proceeding to wipe away the debt that the club accumulated.

Swiss Ramble also provided the same finances for the Championship as a whole in 2011-12. The net debt Southampton had was actually £11.8 million more than in 2008, but the revenue generated in 2011-12 was at £22.9 million, a 8 million increase from 2008. Wage to turnover(revenue) percentage were actually at an astounding 125% but as Swiss Ramble notes in his piece, this is partly due to teams wanting to get that big financial payout that comes with promotion to the Premier League.

Southampton were among 16 teams in the Championship to not post a profit after taxation, with a £11.9 million loss that ranked 7th last in the Championship among teams that released financial accounts (Coventry and Portsmouth did not release financial accounts for that season), though the net debt was closer to middle of the pack. Again, not a financial expert, but for a Championship side, Southampton still ran at a high cost under new ownership. This time around their revenue generated was much greater than in previous years with match day revenue ranking 2nd in the Championship.

Which brings up the team’s finances in the 2012-13 season, their first time back in the first division since 2005. The Guardian did a nice little round up on the financial main points on every team in the EPL for that season. Unfortunately that is the most up to date releasing of Southampton’s financial books.  In comparison to the season prior in the Championship and their tumultuous seasons in the late 2000’s, it was much healthier on Southampton’s books. Wage to turnover % was at a much healthier 65%, which highlights the significant increase in revenue from finishing in the lower mid table with the EPL’s recent massive TV deal.

Wage

Over 65% of the £72 million generated alone came from the Premier League and broadcasting. The massive increase in generated revenue really helped in reducing the loss before taxation from £11.9 million in 2011-12 to £7 million. Net debt also decreased by over half to £19 million from the £39.4 accumulated. This was all accomplished despite the team breaking club records for transfer signing twice in the 2012 summer transfer window with the transfer signings of Jay Rodriguez and Gaston Ramirez.

Again, there’s no publicly released records of Southampton’s 2013-14 financial situations and we’ll probably not be privy to that until the end of the 2014-15 season, but even with the financial uptick, there was still debt that the club had in transfer fees heading into the summer and payments to the new training facility they’re building. Were the summer transfer dealings a direct result of some of the club’s lingering transfer fees? Who’s to say. I certainly don’t know and the public records still probably don’t account for the entire financial picture. The one thing that can be projected with Southampton in 2013-14 is the amount of money they got in Premier League earnings, with Southampton ranking 9th at a staggering £76.9 million, an increase from the £47 million they pocketed in 2012-13.

Perhaps Southampton had to sell to pay off some of the lingering debts that remained. Perhaps Southampton simply saw an opportunity to pocket a huge sum of money that maybe a summer from now wouldn’t have been possible. Southampton were a fun and exciting team last season that produced very solid shot differential numbers yet were hindered to some extent by their below average save percentage.  On a team level the numbers could’ve been repeated with the same core, but maybe their internal projections of player value and performance said that these players were at their peak. Pocketing +£25 million from Adam Lallana five years from now may look like a stroke of genius if his performance in 2013-14 proved to be a fluke while getting a much cheaper and possibly better replacement in Tadic.

So Southampton move on with the hopes of maintaining their status as a mid table Premier League side. They have a new training facility that needs to be paid off, numerous questions still surrounding the summer transfer fire sale and the future of one of the EPL’s best defensive midfielders in Morgan Schneiderlin. Their youth academy has received numerous praise for their ability to churn out talented players going all the way back to the likes of Alan Shearer and club legend Matthew Le Tissier, and it’ll be relied on once again to develop quality players as it’s done in the past.

Their summer acquisitions don’t have the same cache as the players they sold to Liverpool (well, mostly Liverpool), Arsenal and Manchester United, but Tadic could be a star and Fraser Forster should improve quite a bit on the job Artur Boruc did last year as the starting goalkeeper. The talk of Southampton suddenly worrying about relegation is a bit of a stretch. Sure they may not replicate the aesthetic and statistical form displayed last season, but there are some very, and I mean very, bad teams in the EPL. Finishing mid table once again and registering a profit after taxation this season would be deemed as a success after the trials and tribulations that have surrounded this club since their relegation from the Premier League in 2005.

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About Moesquare

Marseille supporter, #FancyStats supporter. Troller of all things Twitter. I write words and hope they make me sound SMRT
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