Saints in the Red: How Southampton's Financial Losses Might Affect the Club

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Saints in the Red: How Southampton's Financial Losses Might Affect the Club
Christopher Lee/Getty Images
Chairman Ralph Krueger and Owner Katharina Liebherr at a recent match.

Earlier this week, Southampton announced the financial results for the club's 2012-13 season via their official website.

The results were reminiscent of the Rupert Lowe era, which isn't a good thing,

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Despite a 213 percent increase in revenues according to a statement posted on the club's website, Southampton lost £7.1 million last season, and owe £27 million in transfer fees. The losses may be the reason owner Katharina Liebherr wanted more control of the club, which led to Nicola Cortese's departure.

While the numbers are a bit concerning, there doesn't appear to be a reason to panic.

First, subtracting the transfer fees, Southampton actually turned a profit. Before "player trading," the club made a profit of £8.7 million during the 2012-13 season.

Second, Liebherr has continued to inject cash into the club to make up for the losses. In 2012-13, the heiress invested £12.5 million into the club, according to the club statement.

In the statement, Chief Executive Officer Gareth Rogers stated:

The Club has risen quickly in a short period and committed itself to high levels of expenditure both on the development of Staplewood Training Ground, which is likely to exceed £30m, as well as significant future transfer fees. This high level of expenditure has required strong support from the Ultimate Shareholder and once again this has been shown.

Also, with the vast increase of Premier League broadcast revenues, Southampton will be guaranteed at least a £16 million increase. The last place team (which Southampton will surely not be) will earn £63 million, according to Martyn Ziegler of The Telegraph. The Saints earned broadcast revenues of £46.9 last season.

Transfer spending may level off for the near future, but that shouldn't hinder the progress. The Saints have a solid, committed core of players in the first team. Only one player, Guly do Prado, is out of contract at the end of the season. Southampton will likely only bring in one or two players to strengthen the squad this summer.

Any transfer expenditures could be offset by the likely sale of Dani Osvaldo, who is currently on loan at Juventus. That will probably be the only big name leaving the club.

According to BBC Sport's Nabil Hassan, director Hans Hofstetter has ruled out selling any of the club's young stars.

Charlie Crowhurst/Getty Images
Southampton won't sell any players manager Mauricio Pochettino wants to keep, according to director Hans Hofstetter.

"The most important point is that we are in a position where we do not need to sell any player Mauricio (Pochettino) wants to keep," Hofstetter said in the article.

For those fans who expect the Saints to continue their climb up the table next season, it might be wise to temper expectations. Southampton may need a season or two to steady the ship financially before pushing for Europe. 

But in the long term, it appears the future is bright as Liebherr clearly is willing to continue investing in and building the club.

 

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