Relegation will no doubt adversely impact Southampton’s financial position in a massive wat as huge income streams from the Premier League will be nullified.<\/p>\n
The club recorded a turnover of \u00a3151m last season, of which \u00a3115m came from broadcast revenue, \u00a317m from matchday and \u00a318m from commercial activities, in comparison with Nottingham Forest, who finished the same season third in the Championship, had a total turnover of just under \u00a330m, of which \u00a312m came from broadcast and league solidary payments, and \u00a38.2m from ticket sales.<\/p>\n
The cost of running the football\u00a0club will also fall, with current and new player wages, agent fees and transfer costs all significantly lower in the Championship.<\/p>\n
And Saints\u00a0will have the benefit of Premier League parachute payments next season and for two more years if they remain in the Championship. These can make a big difference.<\/p>\n
But this compensation does not shield relegated clubs from a significant drop in turnover. When Fulham were in the Championship in the 2021-2022 season, their turnover, which included the first year of parachute payments after their 2021 relegation, still slumped to \u00a372m from \u00a3116m the year before.<\/p>\n
Matchday and hospitality income will also decline. When Saints were last in the second tier, their average attendance was around 5,500 lower than the 32,300 capacity of St Mary\u2019s. On the plus side, there are three more league games\u00a0and earlier rounds to play in cup competitions.<\/p>\n
Inevitably, it is money from player sales in the 2023 summer transfer window that will be a big positive part of Saints\u2019 profit and loss account next year, perhaps helping the club make a profit for the first time since 2018.<\/p>\n
After entering into sale and purchase agreements for players with net transactions amounting to \u00a3100m since July 2022, big-name exits over the summer will contribute valuable cash inflows and reduce future payroll commitments that otherwise are likely to be unsustainable in the Championship.<\/p>\n
While player wages are not individually disclosed in club financial statements, the total staff costs for Southampton\u00a0for the year ending 30 June 2022 were \u00a3113m compared to \u00a358m for Forest and \u00a361m for AFC Bournemouth in those clubs\u2019 last year in the Championship before promotion.<\/p>\n
The new era will also see Saints having to meet Football League financial fair play rules which are signed off by the club auditor. This is where adjusted club cash flow losses for the financial year cannot exceed certain thresholds.<\/p>\n
Non-compliance may result in fines, transfer bans and points deductions, as incurred by Championship-relegated Reading\u00a0this season. However, since cash flow from player sales are included in FFP calculations, they can be a useful tool to wipe out excess operating losses.<\/p>\n
Owners Sport Republic have already vowed to commit to a long-term project with the aim of restoring their top-flight status in the event of relegation. Earlier this month, they inject \u00a315m new ordinary share capital into the club, on top of \u00a348m since September.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"