Saints have just announced their accounts for the year up to June 2013 and they deliver a clear message to the supporters about how we have failed to utilise the potential for income now we are in the Premier League.

Saints financial results have been announced and they make interesting reading, they tell a story that perhaps the supporters aren't interested in, one of where plenty of income has gone out but little has been recouped in terms of commercial revenue and perhaps point towards the real reason as to why Katharina Liebherr felt it neccessary to step in and re organise the club.

To be fair most of the accounts are fairly bog standard, wages and transfer fees have increased as you would expect for a promoted club, but the worrying factors are how little commercial income has increased and how much has been spent on upgrading the training ground.

Staring with commercial income, in the year to June 2012 it was £4.8 million and in our first year back in the top flight it has only risen to £6.7 million, this highlights how we have let this area of the club go, if we compare clubs of a similar size in the Premier League, in 2012 Fulham earned £12 million and Norwich £14 million from their commercial revenue streams, supporters might not care too much about advertising hoardings and corporate hospitality but it is a big area and one in which we drastically underperformed for a club of our size, given that we took out a loan of £5.6 million this could have been avoided if we had put into place affordable and realistic sponsorship opportunities.

The issue of the training ground is a significant one, the accounts summary confirmed that this project is now expected to exceed £30 million, this is an extraordinary figure given this is an upgrade not a new project, in comparison Stoke City spent £7 million on building their training ground from scratch, they are now upgrading it further at a cost of £6 million to include a full size indoor training pitch as well as other facilities.

The much publicised training ground rebuild problems can now be seen to be a major financial issue that will have lead to the reason why alarm bells rang in Katharina Liebherr's office, especially given that the exisiting facilities only built 8 years ago where as good as most in the Premier League to start with, to see so much money wasted, money that could have been used to improve the squad is quite frankly shocking especially when aligned with the poor commericlal performance mentioned, results of this nature would have made a CEO's position in any company untenable.

Overall the message is that the income and outgoings of the club have not been managed as they should have been, this is not a question of fraud, but one of poor management, it has been glossed over due to quickfire promotions, but as the report confirms if these issues had not been addressed it could have seen problems going forward, however as director Han Hofstetter states

“Whilst I perceive that we have inherited a difficult situation financially, there are now clear and structured plans in place to progress the Club and avoid a similar situation from occurring again.

“The continued support of the Ultimate Shareholder cannot be underestimated, and we are grateful to be able to rely on their dedication to helping us flourish as a Club.

“In the short time I have been at Southampton it has become abundantly clear that we are blessed with a staff that has all the necessary skills with which to progress, and now that we can supplement that with a strong Board I am sure we will enjoy a successful future together.”

That message is clear, the club has lacked direction off the pitch and has needed the Liebherr's to step in and bankroll the situation, if she had declined to do so then there could have been a major financial problem.

This being the case the management of the club had to change and it has now done so and they now have the people in place to take things forward in a prudent fashion and with people who know how to run a football club.

Nicola Cortese had many strong points, but these reports show that although he could deal with the on field side of things, off the field it was different and that we were spending money that as a club we did not have without going cap in hand to the Liebherr's it really could have and should have been avoided by good financial governance and strategies.

So going forward Katharina Liebherr has put into place a management structure that can take the club forward both on and off the field, I have read on message boards about the fact that the Club will not be able to take steps forward as quickly as they were seemingly going to six months ago, this is actually not true, on the surface we had a Chairman who told us that the Club was aiming to take steps forward, although these steps were indeterminable, but underneath that surface there were no foundations for us to be able to take them, the then CEO was overspending and reliant on Katharina Liebherr to write the cheques, something that she was not willing to do unless proper Corporate Governance was in place.

This being the case we are actually now better prepared to be able to continue our progress forward and establish ourselves back in the Premier League, we now know who owns the club, who is running it and the parameters they are working too, Ok we perhaps know that we arent going to challenge the top 4 in the near future as we dont have te resources, but we didnt have those resources six months ago so werent honestly going to challenge them back then either.

Five years ago Markus Liebherr bought Southampton Football Club with a five year plan of getting us back into the Premier and making us self sufficient, we werent a rich mans plaything in the manner of Roman Abramovich back then and we arent now, nothing has changed apart from the fact that we have nearly achieved both of the original aims, now we can concentrate on moving forward again.

Photo: Action Images

Sanguin added 13:23 - Mar 31 I think it's important to keep in mind the aap3 deal which was signed in March 2011 while we were in League One. It will only just have finished and the opportunity for a new shirt sponsor next season could see commercial income increase substantially.
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schatfield added 13:23 - Mar 31 the training ground cost is alarming.... good article, thank you
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slynch added 13:28 - Mar 31 Cortese persuaded the Liebherrs to buy a shambles for 10/6d. He banged heads together, got things working, got rid of inappropriate staff and managers, got much better staff and managers, created the best training facilities in Britain; advertising and G&Ts for a few rich people who don't deserve it is just pence; he's getting Saints 80mill in prize money this year and the next and the.... Last Saturday everyone saw the best game of football Saints have played at St Marys. I wouldn't diss him to much he comes from a big Italian family!

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SanMarco added 14:02 - Mar 31 Yes slynch but this is a balanced report on strengths and weaknesses not a pro or anti Cortese rant. We owe a lot to NC but this shows why maybe things had to change...
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Zambucco added 14:02 - Mar 31 This is heartening news, as a long time Saints fan I'm more than happy with our season and will be happy for a few more of the same. Hopefully in that time we can build off field, bring on the training facilities and the academy. As you have pointed out, Katharina has stepped in at the right time, no disrespect to Cortese, but it is a slippery slope when borrowing money to fund perceived success, ask or neighbours. Hopefully Ralph Krueger can start bringing in the commercial cash. I'm a happy Saints fan, with a glorious past 5 seasons, even happier looking into the future, possibly 4 Saints representing England at the world cup. Gaining massive respect and admiration for bringing our youngsters in. Building a style and an ethos, that will help us to become a great side. COYR!

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SaintNick added 14:38 - Mar 31 slynch you are re writing history a little or at least quoting the gospel according to Cortese, Cortese didnt source Saints, Saints were sourced for them when they went looking for a football club You might not want to talk about what went on behind the scenes only football, but to dismiss advertising etc as just pence is ill advised, we were earning under half of what most clubs did, why do the big clubs concentrate on corporate facilities when they dont need the money? the answer is because they still do need the money. We havent created the best training facilities in britain, what we have done is probably gone up the list a little bit, Staplewood was state of the art back in 2006 it wasnt that bad, now instead of being about 10th best in the premier its probably 8th What game we saw at st mary's is irrelevant or perhaps it isnt hence NC's departure after losing 3-2 to Villa or 3-0 to Chelsea what matters is long term progress and clearly any business plan that relies on us getting £80 million this year and the next and the next is flawed as we found out in 2005 and many clubs have found out including our good friends down the M27

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legod7 added 16:23 - Mar 31 I think NC had too much control since Marcus passed away and Katharina wanted to know where HER money was being spent. It seems funny that since he has gone she now has more interest in the running of the club and brought in more people that she trusts
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davepid added 18:01 - Mar 31 I don't remember much criticism of NC until after he left when with a good dose of hindsight everyone said how megalomaniac he was. What I do recall was when the national press woke up and realised Saints were a bit different now, circa 11/13 , NC was cited as one othe main reasons for our success. He did ,didn't he, get us back to the premiership 1 or 2 seasons earlier than forecast. Let's not forget how easy it can be getting stuck in the championship. Of course commercial revenue is important and we can't be profligate with the investment in the academy. But ,correct me if I'm wrong , but I've never heard of a Stoke academy player let alone produce 4 playing in the premiership - ward proswe, lalanna shaw and chambers. Imagine what our commercial revenue would be if Lee had made it or that forward guy from Africa . Bottom line lets not dish Cortesse after what he's done for us ; be critical about some of his decisions but overall he's been a legend.

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ClickInsect added 18:04 - Mar 31 Surprised at some of the comments on this thread. I think another chap mentioned it, but for the season mentioned (2012/2013) we'd just come off the back of back to back promotions with commercial deals signed when the eyeballs on sale were nothing more than the number of supporters inside the stadium on match-days. I'm sure our deals were favorable with other clubs that had been promoted from League 1. I don't disagree with the idea that Southampton should take whatever slice of the pie that is available to us, but equally I don't want us to get into the Cardiff/Hull situation where we are putting the cart before the horse and getting bogged down by delusions of grandeur. Funnily enough a strong correlation exists with commercial success, it is linked to performance on the pitch! If we develop our young, vibrant, stylish side next season then given the competency of Cortese's team I'm sure our commercial performance will flourish. Take a backward step on the pitch & kids in Colorado will not be buying Saints shirts. I've no issue with the Liebherr family, in fact I remain absurdly grateful. The reality is though, that they are extremely wealthy and have spent a little over £50 million to develop an asset now worth several times that. Just the playing staff are worth more than double that on current market value. So yes, we do need a new strategy or a 3-5 year plan to replace the one of old but let's not kid ourselves that in terms of bang per buck, the Liebherr family have probably gotten a better return in the last five years than anybody in world football. I don't want the club to continue to spend like last season. But they do need to either get MoPo on a long contract or replace him as quickly as possible. If we can prove to him, that the project is still going places, then we will retain the vast majority of our players because they want to play for a Southampton that is going places. If they work out we aren't going places, they will ask to leave. At the start of last season, we ended up taking punts on players that nobody else was willing to match a transfer fee for. Particuarly Wanyama & Osvaldo. Unlike last year & if we can show we are keeping our players, people will want to come and play for Southampton. I'd like to see some judicious loans, some frees & maybe some cut price buys of players with good ability/attitude and would be hungry for success. Lewis Holtby is an example. I don't want to see us overpaying for players again, we should try to match Everton's business of last summer instead, if at all possible.

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montecristo added 18:25 - Mar 31 ull year as a member of the Barclays Premier League - Total revenue increased 213% to £71.8m (2012: £22.9m) with average league attendances up from 26,427 to 30,807 - Broadcasting income grew from £5.6m in 2011/12 to £46.9m in 2012/13 - Matchday income of £11.8m in 2011/12 has risen to £16.9m in 2012/13 - Commercial income increased from £4.8m in 2011/12 to £6.7m in 2012/13 - Profit before player trading increased to £8.7m but with an overall net loss of £7.1m. Player trading included a one-off exceptional cost of a £2.1m impairment charge to write off the carrying value of certain players - The loss before interest and tax has reduced to £6.6m (2012: £11.9m loss) - Club wage to turnover ratio reduced to 65% (2012:102% after the removal of exceptional bonuses) - Total group wages, including player wages, increased to £47.1m in 2013 from £28.7m in 2012 - At 30 June 2013 (balance sheet date) there were £21m of committed transfer fees still to be paid and since this date a further £27m of player transfers were negotiated (in the 2013/14 season). Whilst £21m has been paid in this current season, £27m will still be owed from 30 June 2014, with £22m of this being due in 2014/15 alone - A £5.6m loan was taken out with Vibrac in September 2012 to enable the Club to take advantage of a lower transfer instalment payment by paying earlier, and so reduce overall cash outflows and liabilities - Expenditure on the total training ground project now anticipated to exceed £30m. The first phase of the build is expected to open this summer - Further investment from the shareholder in the year was £12.5m, with another £2.2m in September 2013 bringing the total investment since acquisition to achieve promotion to the Barclays Premier League to £52.7m. £37.9m of this has been converted into equity shares in the year bringing net liabilities down to £1.6m from £32.4m in 2012 Do you understand this?? Saints are not overexposed, they have broadcasting revenue of over 50 million and they are likely to get much more than that and ticket sales of 16 million plus other sources of income. In short, they have projected current expenditure pretty much covered, even allowing for player wages of 50 million. Compare this with Man Utd s situation which is dire. While Nick has his issues with Cortese, reputedly, NC did a cracking job of running and expanding this football club to the point where it is the envy of the Football league. Enough said I think...

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SaintNick added 18:54 - Mar 31 Monte, when you talk of the increased revenue & broadcasting revenue these are all from promotion to the premier league, there are plenty of badly run clubs who have had this kind of income but have not used it wisely, Pompey for one. Yes i have issues with cortese, but from the comments coming from within the club i clearly dont have as many issues with him as Katharina Liebherr has, its easy to call Cortese a legend and he did do many things well, but it was Nigel Adkins who got us those promotions his managerial skill etc that did it not the Chairman's, if liverpool win the league this year who will be the reason why Brendon Rogers ? Luis Suarez or their owner John Henry Saints are not overexposed but it relied on Katharina turning loans into equity and clearly there were big issues with the way the clubs finances were being run

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densham41 added 19:39 - Mar 31 Davepid, Cortese had nothing to do with the development of Shaw, Lallana, Ward Prowse and Chambers. They were all at the club as under 8s before he arrived. In fact several of the coaches who helped there development left after he arrived. As for a training ground going up from 15 million to 30 million, that is unbelievable. Total mismanagement. The Liebherr family's money and support has got us to where we are today, along with Nigel Atkins, Mo Po and especially the players. This is the best Southampton team I have seen since the days of Keegan and Channon, I came away from St Mary's on Saturday with a warm glow inside and I for one Would like to say Thankyyou to Marcus and Katharina for giving my football club the chance to give me that feeling and smile. Thankyyou Marcus and Katharina.

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davepid added 21:08 - Mar 31 Nic, you are right ,my use of the word legend was a bit over the top. But NA presumably owed his job to Cortese and most of us thought it was nuts to replace him with MP when we did. But that has proved a good bet ( despite me now thinking MPs shelf life is expired). Den sham - my point was our investment over the years has paid dividends. You can do it cheaper , like Stoke, but you don't get the results in the way we have.can u name a stoke academy player.

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IanRC added 00:44 - Apr 1 Whilst the overspend on the Academy is plainly large it will be money well spent if it demonstrates to Luke Shaw and our other youngsters (and those that follow them) that the club is committed to their futures. I can see why Katharina would want more insight into how the money is being spent and at the same time I can acknowledge that NC made a great contribution in providing an environment that accelerated our return to the PL. The best thing for me was to hear a public statement about not selling players that the manager wants to keep from the new management team. All looks good at the moment and for that all fans owe a great debt of gratitude to Katharina and her father for putting up their money at a time when it could all easily have gone pear shaped.

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BoondockSaint added 02:56 - Apr 1 Right you are dendham41! Spotting talented players takes good scouts, developing them takes good coaches. 30 Mil and they haven't even started yet!?? I'd be going over the books with a fine tooth comb! By the way I was one criticizing Lil Nic's management style before he found someone who wouldn't be a bullied by him.
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DJI added 08:45 - Apr 1 It's funny how some won't hear a bad word about NC but here's some news for you; he's gone so you don't have to be scared to have an opinion now! Although NC deserves credit for our meteoric rise, Nigel Adkins and the playing staff won us the promotions because let's not forget, it is what gets done on the pitch that delivered the promotions. What these accounts highlight is that we (NC) were taking some dangerous gambles with someone elses' money. Our Ultimate Owner has now stepped in to set in place proper management of her business and finances which I welcome. Someone mentioned the shirt sponsor; from what I recall, aap3 were being replaced but it got screwed up and at the last minute, it was decided to run out the remainder of their contract. What is very clear is that our stadium only holds 32500 which limits our income to pay for players and transfers, so it is vital that we maximise the commercial revenue opportunities to bring in the extra needed. These accounts show that the great NC was not achieving this and if it continued, we could be putting our Club into grave danger once again. For those that don't believe this, just look at what happened to our friends down the road. I feel a lot happier about the running of our Club now. It is also clear that the atmosphere around St Mary's has improved now they no longer live in fear. As for the Academy building project, that is a complete joke! To double the (already high) expected cost is insane and clearly Katharina was concerned about this too. And yet every week we see it on Saints Player in the background and it looks like nothing has been done since so where's is all the money going in it? The Don is gone, long live King Ralph!

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davepid added 12:29 - Apr 1 Commercial income. The true comparison to test NCs ability is with the other two clubs promoted with is - west ham and reading. Did they achieve growth of about 40 % like we did? Fulham might be comparable size if they've had a few years in the premiership they've had chance to build their commercial income streams when we hadn't. I'm not an uncritical fan of NC but he must also take a lot of credit for our rise.

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sidsaint added 23:15 - Apr 1 Nick. Can you tell me where I can see/get a copy of the accounts. Thanks.
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davepid added 08:44 - Apr 2 Looking at Katharinas photo at the top of this piece, didn't she star in Bridget Jones diary?
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