SoccerShout.com

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A theme I’ll look to develop in this blog is the financial mess that football clubs find themselves in. I think it’s pretty fair to say that many clubs don’t have a good business model.

Looking at a club purely from a business perspective, you’ll often find lots of income and customers, but expenses that result in a net loss.

If this blog had 23,849 loyal readers, I can tell you two things

1) I’d be generating some income, but still a pretty modest amount - maybe $100,000 in my wildest dreams.

2) I’d be making a profit, because there’s no way I can spend more that $100K a year on a blog.

By an uncanny coincidence, 23,849 is also the average attendance that Southampton enjoy in the 2006/07 season. What did they do with this impressive fan base?

1) Generated lots of income - £10.5 million in matchday receipts and £23.2 million from all sources.

2) Made a loss of £1 million (which was only so low because the club made £5 million in trading players).

It beggers belief that a business with thousands of loyal customers who pay, on average, £450 a season just at the ground, can end up losing money. But Southampton have managed it, and most clubs are doing something similar.

Fast-forward to the end of the 2007/08 season and things have not improved for the Saints. Today’s news included a dispatch about Southampton being prepared to take a £3 million haircut on Theo Walcott’s transfer fee just to accelerate the pace of installments. This is like taking the ‘lump sum’ option when winning the lottery rather than accepting payments over thirty years - never a sign of solid financial planning.