I can't see a major organization making him CEO. He has literally zero business experience prior to his time at Saints. And, as a point of order: he isn't actually chief executive here. He's the chairman, but that's a bit different, as evidenced by the fact that he apparently isn't here full-time, and we also used to have a CEO alongside him, but now don't for some reason.
The St Marys Football Group Account figures for 2018 are available @ https://beta.companieshouse.gov.uk/company/06951765/filing-history 40 pages long and if anybody can make any sense out of them I would be glad to hear about it. The Acounts for Southampton Football Club are @ https://beta.companieshouse.gov.uk/company/00053301/filing-history ... and those for Lander Sports (UK) International Investment Co.,Ltd. available shortly @ https://beta.companieshouse.gov.uk/company/10449153/filing-history
It's Barry Trotz money. It's definitely a bit of a stretch but there are bad head coaching decisions made all the time. I could see Edmonton being desperate enough to pay foolish money for the guy that actually had some success there. Not saying I'd pay him that much, just that I wouldn't be shocked that someone would. But you probably know better than I do. At any rate, I think we would agree that $900k USD isn't a big deal in NHL. It's really low for a head coach, and in fact I wonder if there's anyone left still making under $1m. And while Kreuger might have to take an assistant job for a season to show he's still got it, if he did a good job he'd be in line for a head coaching spot that would pay him $2m, easy. I mean, regardless of what Southampton fans think of him he still has a good reputation in the hockey community.
Superficially, they're good numbers (I'm using the Group accts rather than the club, as those match to the previous numbers I have): we had a net cash position of £19.8m, up from £2.9m a year ago, so our paper profit also yielded a real (though smaller) increase in our cash money supplies. For all the talk of how scary the financial world is in years past, we have (on a cash basis) made money hand over fist: we went from a net debt position of £39.1m in FY 2016 to +£19.8m in 2018, an improvement of £58.9m. And make no mistake, that has been our intent...to use player sales to stockpile cash, because neither our former majority owner nor our current one wanted to spend money. And on paper, it's a success: while raking in boatloads, our net assets grew significantly this year! Problem: paper assets mean nothing, and the reason that our net assets soared is that we acquired the likes of Hoedt, Elyounoussi and Carrillo, while disposing of what was booked as a minimal asset in Virgil Van Dijk. You may recognize this as being absolute nonsense; VVD is far more of an asset than that trio combined, but that's not how it works from an accounting standpoint, where the player is worth what they were bought for and not a penny more or less, and then grows progressively more worthless over the course of their contract. Granted, that's true for Hoedt/Elyounoussi/Carrillo, just not in the manner in which it's accounted for. Here's the problem: our revenues fell off the table last year. They're going to remain static this season as well, probably even falling slightly again. Whatever dreams we had of boosting our commercial revenues, which is apparently our big hope despite the fact that no club outside the top six actually receive a substantial portion of their revenues from commercial deals, died when we sold off most of our best players and started tumbling down the league. What's more, because our revenues cratered while our wage bill did not, we likely have either the highest wage to turnover ratio in the league, or we're very close to it. From there, it's somewhat understandable that there has been a mandate to cut wages, but we're in a precarious position at the moment...counterintuitively, a much more precarious position with our cash on hand than we ever were when we had a debt that amounted to 33% of our turnover or some such. Because no matter what the paper says, our asset base is far weaker than it once was, and the debt we owe is now external...the only threat that came from the club owing KL some money is that she'd merely get exceedingly rich selling the team, rather than excessively rich. There's no magic button we can press to exchange one exceptional player for the money to rebuild the squad, because we wasted that, and the good players in the squad are not easily expendable because we need good players to survive. And through poor purchases and the depletion of our salable assets, we have a net £30.8m payable on transfers, including Ings; on that score, it's easy to see why someone like Gao (who doesn't want to put a cent in) would be nervy. Our financial position is friendly now, but between the money due later (much of it on bad decisions past), our bloated wage bill, and our depleted squad, there are clouds on the horizon. So, what do we really need? To be good. Being good is a major financial boon; the gain based on table position is going to increase even further next year, and being good also makes your players more attractive as assets, makes you more attractive to potential players (and investors, if Gao's aiming to flip the club), and gets those almighty commercial dollars that we covet (despite it being like 10% of our turnover and having no realistic chance to increase that by more than a few mil). Austerity is rarely a vehicle for growth, and if we respond to our diminished revenues by trying to sell off better players to improve the balance sheet, we might continue to have a nice pile of cash, but we also vastly increase the likelihood of the financial armageddon that is relegation. Perhaps Ralph alone will make us a significantly better team, but we cannot count on Ralph being here long-term, especially if we're playing for par; we need to build up our base of assets again, or we'll have little recourse if things go awry. I doubt we'll spend, however; more austerity seems like it'll be the order of the day. Basically, we are a mismanaged club, and we've sold the silver for an amount that won't so much as get us through a lean year, never mind an extended period in the muck. We need to either be exceptionally good at player recruitment, or we need new ownership, because attempting to rebuild without the capacity to spend is extraordinarily difficult.
Thanks for this excellent summary Sadly not a surprise and RK should resign for being responsible for this mismanagement
First off, interesting read, thanks Schad! I don't see how our recruitment will improve, because as far as I can see none of our recruitment team have changed? And our former head of football or whatever his title was Les Reed hasn't been replaced either. At this stage I'd be happy to go with Ralphs wish list, but that's a short term plan really. I've also said it before and I'll say it again, I'm not sure £20m on Ings was a good idea given our lack of money to spend. Yes we needed a striker, but to get someone in with an obligation to buy that has a very questionable injury record and is not guarenteed to get over that was a big risk that smacks of desperation to me. I'm not convinced he's perfect for a Hassenhuttle team anyway...but that aside, I'm not sure we can afford to have such an expensive and critical member of the team out injured as much as he is. I can't say that I have any expectation that when he's back for the Brighton game that he will last until even the end of the season without getting injured again.
We need to perform well and get results so we are inviting for new players to come in; we need to have excellent recruitment so we can sell players we brought through the academy or bought cheaply for big money to sustain ourselves. We all knew this but recruiting well and good performances go hand in hand. And when they fail and relegation looms - it will be a catastrophe. How do we suddenly become good at recruiting again - I’m not sure. Reed has gone so Wilson is leading on transfers, with a new DoF to come in presumably.
Interestingly the big 'selling point' for RK when he came in, was his supposed skill at increasing commercial revenue. Oh. I can see an immediate £600k in wages we could save, straight off the bat...
And on previous evidence we probably aren't going to have any significant amount of money to spend, unless we're moving core players on. So we don't merely need to be good enough to replace them like for like, we need to be good enough to get better players for less money. Which is really where the ability to spend money is advantageous: it is certainly not a panacea, but it gives you the chance to overcome your errors. If your errors can only be remedied after selling your successes, you are operating on thin margins indeed.
One thing: while I do think we should spend more, I hasten to add that we should not, in fact, be Everton. Everton now has a net debt of £215m versus turnover of £189m. Their net debt increased by £120m in a single season, which one might recognize as a bad thing. Luckily, there is a vast middle ground between "be Everton" and "be Newcastle". And on the commercial revenue front, Everton has seen one of the biggest jumps in the PL, up 131% in five years. However, that jump in commercial revenues still amounts to a small sum in the grand scheme; it's less than the difference between the prize money we received in '16-'17 and that received in '17-'18. And we aren't in Liverpool, so we aren't likely to ever approach their commercial reach.
We had plans to expand our commerial base in china? Plus football schools, if I’ve remebered correctly.
Every team has plans to expand their commercial base in China. Hell, most teams have actually taken steps to expand their commercial base in China. The problem with "opening up" markets is that most of them have been open for many years now, and as with most places where the populace has no longstanding ties to any particular team, most fans have gravitated toward the biggest clubs, and have taken their dollars with them. A number of clubs have had Asian companies as primary shirt sponsors, but it hasn't led to untold riches for Huddersfield, or WBA, or Watford. Rather, those companies are advertising because it's a cost-effective way for them to reach the millions of Chinese fans who already follow the PL...they almost definitely aren't Huddersfield fans, but millions of potential consumers will still see their logo when their preferred team plays Huddersfield. Will opening soccer schools help? I mean, it might make us a few hundred more fans, maybe even a few thousand. It isn't going to have an appreciable impact on our bottom line, though.
All due respect to Schad..... you’re just going to go along with that and not see if their is another interpretation? There is always two ways to look at something and if you don’t understand accounting, might not be best to just take one person’s view as verbatim. This is how Brexit happened This is not a post against Schad’s review by the way, just an observation.
So it looks like the current business model is to rely on youth, and shrewd recruitment. The recruitment side has received a massive boost with the appointment of Ralph. Valery, and hopefully Obafemi and Sims, are evidence that promoting youth can continue to work. That’s all fine so long as the manager isn’t undermined by constantly having his best players sold from under him. And it will probably be a while before we unearth another Mane or Van Dijk. So Liverpool will have to do their own recruitment and development. Still hoping for something a bit special next season
Being in the red....bad. Being in the black....bad. I'd still rather be in credit. I think we lost our way, but still remained relatively stable on paper...I'd rather that than have us run by some of our more crazy fans who'd be throwing cash around. We certainly made some poor decisions, but so does every club...sadly, we haven't the financial backing to ride it out so easily. Top clubs can hide their mistakes by not having to play them....a luxury that we couldn't afford. There are failures at every club. It seems we are trying to get back to our core values and this will involve us developing players to use and sell. It is a question of getting the balance right...and let's hope we manage that.
The problem is how we got into the black. We sold and sold, and used that money to...have money, but the net result is that we can expect to take in far less in revenues, which impedes our ability to remain in the black. It's a very modern corporate way of doing things: cut and cut some more so the balance sheet looks rosy today, while failing to pay adequate attention to the downstream consequences. Which is understandable, given that our owner for a fair portion of that had no particular reason to be concerned about the downstream consequences, given that she'd be paid before then. But it places us in a bad spot now; unless we relent and are willing to spend, we're going to have to be the best sellers that ever sold, because otherwise skimming the cream off the top is going to get us relegated.
