Having completed a season in which Southampton FC won (almost) everything, missing out only on the European Super Cup, I thought it worth a blog post to see how this affected the finances of the club, and what this could enable the club to achieve with regard to infrastructure, player recruitment and improvements within the backroom staff with these funds.
Prize money unsurprisingly saw the largest growth by nominal value – a jump of £71.4m on the previous year, when we’d won the UEFA Europa League. Winning the Champions League and Premier League had a significant positive impact across just about all areas – including a boost to sponsorship revenues, as success on the pitch enabled the marketing team to bargain for more cash-generative deals.
The growth in revenue across match days can be best seen in the graph below – significant jumps in gate receipts thanks to the additional revenues from Champions League fixtures and the increased ticket prices, coupled with a big jump in merchandising as shirt sales rose dramatically with fans seeking to purchase their own piece of memorabilia of the momentous season.
Understandably, the increase in games combined with the success on the field meant that there were negative impacts upon cash outflows.
Bonuses rose by more than 50% on the back of contractual player performance targets being met, including team of the year, goals/assists, trophies, and general squad objectives. Player wages also rose as they met triggers for appearances, and due to general wage increases as player/agent demands grew as a direct result of the string of wins the side were able to put together. Given a broad view amongst club officials that there could be little if any improvement made by selling these players for viable alternative incomings, the decision was made to reward these players.
The large profits made over the financial year meant that HMRC took over £45m in tax, significantly higher than in any other year, taking away a large proportion of the additional revenues generated from the various trophies that were accumulated over the season.
That said, net cash flow for the financial year remained strongly positive, with a growth of over £62.8m.
This saw the closing balance, i.e. cash held on account, rise to just shy of £228.6m.
The above cash inflows also highlight the sharp drop in player sales compared to the previous financial year. Whilst some fees were still being paid in instalments for deals agreed in previous years, there was a marked drop-off in sales completed in this financial year, in both financial value and in volume. A fall of just less than £122m in cash received from player sales meant cash inflows actually fell despite the club’s trophy haul.
This was balanced out by a reduction in transfer expenditure, as seen in the cash outflows. At the start of the season, there was a determination to keep a settled side. Accordingly, the only transfer that was sanctioned for the first team was that of Nicolò Rovella from Borussia Dortmund for his minimum release fee of £32m, and this took place in the January transfer window when an incoming bid for Nicolás Domínguez was accepted. Other incoming deals were for youth team players, with the remainder of the expenditure accounted for by instalments on prior purchases in previous financial years.
The lower level of player acquisition costs compared to transfer outgoings receipts meant that the net transfer spending for the club kept at a healthy -£60.87m after last year’s bonanza year of £134.77m.
As of the end of the financial year the following prior transfer deals still had payments yet to be received (debtors to Southampton FC) or paid by the club (creditors to Southampton FC).
With a net £44.9m in transfer debt still owed to the club, and a very healthy cash balance, the club finds itself in rude health both on and off the field. Time to make hay whilst the sun shines with some prudent investments.
During the season, I approached the board of directors to request an increase in capacity as Saint Mary’s. They agreed, and so set about agreeing plans with the local council to extend the size of the ground. A total of 16,000 seats are to be added with a completion date of June 2028, though it will mean a move to the 40,600 all-seater Southampton Community Arena at the start of next season whilst building work is completed.
All other aspects of the club are already maximised when it comes to facilities and the board have been rejecting requests for further affiliates, so it’s a case of waiting for the stadium to be expanded before any other plans are put into place. These plans would also be reliant upon continued qualification to European, and realistically, Champions League, football and the cash inflows that come with this achievement.
With a number of staff contracts up for renewal in key positions, the opportunity was taken to review all areas.
Out went assistant manager, the technical director, director of football, and head of youth development who had been in place since the start of my contract with Southampton. All were deemed to be good but there was potential for improvement across the board in these roles. There were also changes in more minor staffing roles at youth levels too with fresh analysts and coaches brought in to replace those whose contracts were to expire.
It might sound strange to speak of prudence when the club has won an unprecedented (in real life) quadruple and when the club is going from strength in its books too, but there’s a good reason for saying this. One look at the club’s combined expenditure on the squad, and you’ll see that this side was not put together by splashing significant piles of money on transfer fees, agent fees, loyalty bonuses, and player wages. The apple cart needs not to be rocked – but the orchard might need a bit of pruning here and there and some new trees planted.
The below shows the players in the first team squad at the start of the quadruple season, and any player in red was sold at some point during that season. Equally, any player that was added to the playing squad was included in the spreadsheet and then indicated as a new purchase to help calculate the total cost of player acquisitions in that financial year according to accounting laws, i.e. amortisation. The current record transfer is that of Alexis Mac Allister from South coast rivals, Brighton & Hove Albion for £73m. Whilst we are in a position to match such a fee again, with more proof of this below, do we need to?
To further prove that there is a sufficient transfer war chest, here, you can see that Nicolás Domínguez and Omar Alderete were both sold and that five players were signed, including the aforementioned Nicolò Rovella. The remaining signings were all (newgen) youth team players.
To calculate the profit for the financial year from player trading, then the difference in accounting terms between player sales (regardless of when actual payment is received) and player purchases (again, regardless of when actual payment is made) needs to be worked out. The below graphic shows how the remaining book value of the two players sold (literally how much of their transfer fee was still to be amortised across the rest of their contract) has to be deducted from the agreed transfer fee. Once this is done, this needs to be summed, and then the first year of the amortised value of the newly acquired players is taken away to reveal a profit of £34.9m in player trading for the year.
Now to the ‘should we?’ part of the question. The below graphic lays out the entire first team squad, their age relative to that of the peak age for that position in the Premier League as calculated by The Athletic’s (former) writer Tom Worville, and next to it their respective minutes played across all competitions.
GK – An ageing goalkeeper in Çakir, though not old for a goalkeeper by any means, and a young replacement in (newgen) Antonio López, tells me we’re relatively well stocked in net, and there is another (newgen) goalkeeper playing for the U23s, so no cover is needed here, but something to think on in a year or twos time.
CD – both Pérez and Struijk are at the absolute prime age for centre-backs, and newgen’s Morgan and Bentancourt have seen good minutes to aid their development. Morgan is already an England international despite being a 21-year-old centre-back, but does lack in natural fitness to be able to play back-to-back games, with cup and continental fixtures regularly falling into midweek. Here is a position where another player could be brought in to act as a backup to avoid any possible availability crisis in a crucial position. To maintain potential future sale value and maximize any future player trading profits, a young player is preferred, but age doesn’t have to be a dealbreaker given the current age profile in this position.
FBs – Livramento is the only player in this position to be at peak age according to minutes played by Premier League players in this position in real life. The rest are all older. This is clearly a concern given that Malacia has made it clear he wishes to leave, threatening to run down his contract if he’s unsold and demanding a replacement is signed to enable his departure. Livramento is also unsettled at the club, believing he’s deserving of a bigger club – clearly our trophy cabinet isn’t resplendent enough for him after this year’s haul(!). Here, my scouts will need to do some work and investigate if any wide defensive players of a suitable age are capable of playing as the sole wide player in my 4312 tactic. I suspect their work may be hard graft from previous reports.
CMs – After adding Rovella into the central midfield pack, there looks to be a nice balance across players available for the midfield three. Two players for each player role, and Morten Thorsby, a model citizen, to provide versatility across all three roles, as well as (newgen) Ricardo who received a handful of minutes across cup games. We could add more depth here to replace Thorsby, but this isn’t a priority – Thorsby is a valuable mentor to players given his personality.
AMs – A nice blend of youthfulness in Schjelderup and the more experienced Mac Allister means there’s nothing to be done here, with both Satriano, Lomelí and Esposito able to drop into this role if necessary. Equally, three of the five players acquired for the youth team over the course of the season specialise in the advanced midfield position. Already well-stocked and good to go for the future here.
STs – Similar story in the forward line – all players are below the prime age for Premier League minutes according to the number of minutes played by players. Only Satriano and Lucca are entering their peak years. This makes their 98 goals and 44 assists all the more impressive for a group so relatively young. I do have my doubts that (newgen) Ben Wilson is of the required standard for the Premier League, I could seek to loan him out, but he’s a home-grown player, albeit through being at Southampton for more than three years prior to the age of 21 rather than coming through our youth system, so he’s useful for qualification.
So to surmise, a new centre back to add more depth given the number of games the team could potentially play this season, and anything else isn’t a priority barring any sales, though again none of these are necessary given the balance of the team.
First target was to land the centre back happy enough to be a squad option at best, and when Burnley were relegated, a bit matching Kaiky’s relegation release clause was submitted for £34m. This was after first checking with his agent that he would be happy to come in on the aforementioned playing terms. Other options were clear that they would want more substantial minutes, which I was not prepared to offer after being relatively happy with both Morgan’s, Pérez’s and Struijk’s numbers last year. Getting in before Manchester City bid on Kaiky meant that signing number one was in the bag before the Summer transfer window had even opened.
The next transfer was the sale of Lomelí to Borussia Dortmund for £29m, netting a booked profit of £25.4m on the player. Never likely to be a first choice option for us, and with two years left on his contract, I decided to cash in on the player now but know that Dortmund were very likely to put in place a very reasonable minimum fee release clause should I decide to buy him back again. As it happened, Dortmund signed another forward shortly after Lomelí, who then immediately took a dislike to this and asked to leave. Wolfsburg came in for the Mexican international, but he must have rejected their terms and remained unhappy at Dortmund. No forward option was considered given the lack of players that were of satisfactory quality and happy to be back up.
There were attempts to resolve Malacia’s desire to leave by trying to sign Vasilis Zagaritis from Parma for a ridiculous release fee of £4.5m. Zagaritis and his agent stated that he was happy to come in as a back-up option to Mykolenko during contract negotiations, but he ultimately chose to sign a new deal with Parma. There was a new £9.6m minimum fee release clause, which I tried to trigger, but he had no interest in speaking to the club.
Livramento also remains at the club despite handing in a transfer request. No bid was forthcoming, despite rumoured loan interest from Man UFC, Real Madrid and potentially Barcelona. Clearly though, no club had the transfer funds to meet his minimum release clause of £120m.
Instead, the only other incoming was a wonderkid midfielder, Kevin Mensink, signed from AZ Alkmaar for his £71m release fee. Liverpool were rumoured to be interested in him, and I realised after intense scrutiny in his attributes, stats for the previous season, and consideration of what he could bring to our side in the present and the future – I couldn’t see him go to Premier League rival. I chose note to sell any other midfielders, despite my own concerns about how this might impact upon playing time and happiness. I was keen for Thorsby to mentor Mensink, but both he and Kaiky had already played too much first team football for any mentoring to have any impact upon them. This is something I need to consider – for top-level wonderkids, it’s a short window when they can be mentored.
Beyond that, the only other signature was that of Netherlands U21 central defender René Udenhout (a newgen) from Sparta Rotterdam for an initial £7m, rising to £10.5m depending upon various targets with a loan back to Sparta also contained within the deal.
Sales of two homegrown youth prospects were also sanctioned, along with that of Francisco Conceição, and new deals were agreed with a number of first-team players, leaving the contract situation looking like this:
I hope this blog post gave you an idea as to how the funds were generated from the tremendous success in the 2026-27 season, and how, hopefully, I’ve used it to build the club for further future success. Time will only tell on that one.
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