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Southampton: a new contender knocking at the door?

By Tony Attwood

The chair of  Southampton has joined with Chelsea in launching an attack on Uefa’s Financial Fair Play policy and the Premier League’s own version of the programme.

I don’t want to do another FFP article, because the whole situation remains too unclear to make any firm predictions about.  But fFor now I just want to note down where Southampton have come from and where they might be going.  I do this not just out of the usual Untold interest in all things financial, but also because during my time living in Dorset, Southampton was the nearest upper league club, and I went there on many an occasion.

But back to the current era…

On 8 July 2009, after Southampton Leisure Holdings PLC, had gone into administration the club was bought out by Markus Liebherr for around £14m.  Nicola Cortese was appointed as Executive Chairman.

Southampton started out with a ten point administration deduction and ended the first season 7th in the League One while winning the Johnstone’s Paint Trophy.

Markus Liebherr who bought the club was a member of the family owning the huge Liebherr construction machinery company.  His shares in Southampton were effectively owned by his family, as he ran the separate Mali Group.  

Sadly Markus Liebherr died of a heart attack, on 10 August 2010 but the family control of Southampton FC continued through his daughter, Katharina Liebherr.

In the 2010-11 season Southampton were promoted from League 1 to the Championship. In 2011-12 they finished second and were promoted to the Premier League and we have already seen them in the top reaches of the league, occupying a Champions League spot on occasion.

Now I mention all this because Southampton have made this remarkable progress by spending a fair amount of cash.  But now they are banging up against FFP regulations and the Premier League’s own rules introduced last year.  

Recently Cortese said, “We have got to not feel disadvantaged.  We will grow our commercial income but if we cannot close the gap commercially, which will probably be the case for all time, we have to use other aspects.”  He was talking about youth development.

He continued, “We fought against the salary cap. We think it can lead to a situation where we make profits but cannot use those profits to retain a player on a higher salary as we are capped quite low.”

Now Southampton has started allying itself with Chelsea, and the chairmen of both clubs spoke at the Leaders in Football conference at Stamford Bridge on the issue of FFP and managerial stability.

I find this interesting for two reasons….

First, I don’t think many people see Southampton as serious European contenders, and yet with the money that they have at their disposal, and the success of the last three years, they could be.

Second, Manchester City have spent money through the last 18 months as if FFP does not exist, and yet here we have both Chelsea and Southampton making common ground to complain about FFP and the Premier League’s own regulations.

If Southampton, with all its new found wealth, and (let us face it) a remarkable success story in moving up from League One to the upper reaches of the Premier League, really have got a sustainable position, then that puts yet more pressure on the race to the Champions League spots.

To explain my thinking: we are used to talk about Manchester United, Manchester City, Chelsea and Arsenal as the four contenders.

Outside of that we see the propaganda pitches from Liverpool and Tottenham as they try to move up – but normally these statements about getting into the Champions League are made without any reference to the fact that the top four are constantly upgrading their own playing staff (although perhaps Man U are not at the moment).   The outsiders don’t just have to do better – they have to do better than they did last year, and then overtake the improvements made by the existing top four.  The bar is raised every year.

Of course we could see another collapse of a club, as happened with Liverpool who fell out of the top four, simply because of the chaos within the club and the fact they were run by the banks.  But leaving that aside Tottenham and Liverpool have to make double improvements to get into the top four.  Anyone trying to break into the “next two” mini-league, have to make even greater progress.

And now supposing there was another outsider knocking at the door, in the shape of Southampton.   That doesn’t mean Southampton would make it – although they might – but it does mean they might make it even harder for the outsiders to break into the top four (unless one of the top four fall apart), by making the “next two” chase tougher than before.

The second point is that of FFP.  Is it going to hurt clubs or not?   Manchester City seem to think not – presumably guessing that their lawyers have enough to go on to tie Uefa up in knots.    Southampton are not constrained by that at the moment because they are not in the Champions League or Europa League, and may not expect to be next season, but they are still making noises about FFP and the premier league’s new regulations.

Could it be that we really do have a powerful new club knocking at the door?  Certainly the industrial might of the company behind them is extraordinary, which in a roundabout way means they have access to the top lawyers in Europe if they want to make a challenge to the Premier League’s rules.  And they will have access to top marketing people too.   Southampton may not be everyone’s ideal homeland, but it is on the south coast, and right by the yachting elite zone which attracts so many billionaires.

I suspect that anyone thinking that Southampton is just a club having a nice season, but that they will soon fall away, is going to be surprised, and I suspect they could be making common cause with Manchester City and Chelsea in the months to come.

 

17 comments to Southampton: a new contender knocking at the door?

  • insideright

    The common link betwen Southampton and Chelsea is, of course, that they both made mistakes with regard to stadium development.
    In Southamptons case they set their horizons comparatively low when they moved ground and are now unable to exploit their new position to it’s full potential. To be fair I’m not sure anyone would have been more bullish at that time and, if they had been, I doubt whether they could have raised the money to build any bigger anyway.
    In Chelsea’s case they (probably arrogantly) beieved that they could not fail to move seamlessly into a 60000+ seater stadium and thereby to get to a sitation superior even to where they are now on the pitch – but self sustained off it.
    Arguably both Liverpool and Tottenham suffered the same ego-trip and reality can be a difficut thing to deal with.
    Decisions made in the past were either right for the time in which they were made – or were inevitable anyway. Either way you have to live wih them and hope that others do not exploit your weakness while you take a fresh, longer term, view.
    Arenal took the longer term view (perhaps not early enough) and were adversely effected by financial doping at other clubs while they were doing it. Who ‘wins’ in the end – only time will tell.

  • nicky

    Once upon a time, football clubs prospered solely as a result of the efforts by its players on a football pitch.
    Players who were generally garnered locally, although there were instances when promising talent from elsewhere in the land were signed to aid success.
    In 1938, Arsenal FC broke the record by paying over £14,000 for a player.
    Then came WW2 when professional football took second place to a more important conflict.
    The years following the peace and up to the present day, have seen unbelievable changes in the professional game.
    The governance of clubs is now big business, with its associated sharp practice employed in order to gain success.
    Players’ wages have spiralled virtually out of control, while ticket prices and the cost of replica shirts appear to be following suit.
    The advent of the FFP regulations was regarded by some as a means to control financial madness but these are already under attack by club lawyers no doubt engaged specifically
    to explore loopholes in the controls.
    The fact that corrupt FIFA and UEFA are toothless in the extreme in exercising honest governance

  • nicky

    is to be deplored.
    The problem today is the increasing influence of “outside” wealth into some clubs, wealth gained from big business generally from abroad.
    One wonders about the reasons for this largesse…it certainly cannot be for the investment return.
    And now we have a small club like Southampton joining in, via its sugar daddy, in an attempt to circumvent authority.
    One day the bubble will surely burst and for the good of the game it cannot come too soon.

  • Scott

    I wouldn’t call saints a small club! Were a side with good pedigree in top flight,, clubs can grow in stature very quickly let’s face it look how Chelsea and Man City have grown! History us history but I changes quickly! Saints have huge potential

  • Ian

    At least the “big business” backers at Southampton have been happy to see proper development of English youth players rather than relying on poaching talent from other clubs. In that respect it is a shame other premier league clubs do not follow that ethos. Furthermore those that remain with the club appear to be remarkably grounded and unspoiled.

  • Matt Clarke

    A very timely article…I just votes Southampton as Arsenal’s most likey title contender in the AFC poll.

    My choice was, admittedly, partly out of spite for all of the other contenders, but also for two other reasons: 1) a fondness for SFC from my childhood (I spent summer’s at my Nan’s house on the Hasting’s Bass estate where the Balding racing stables was and SFC visited (when Mill Reef retired) to play cricket); and 2) their academy has been produced top class players for quite a while and they seem to deserve a spell of reward for that.

    As usual, however, UA educates and humbles me.

  • Darren

    I’m a saints fan in peace I have been a season ticket holder at saints for over 35 years I’ve seen many a game against the gooners I remember Ian wright’s debut for you against us when he scored a hat rick against us very well from what Nicky is intimating it seems that no other club outside of the top 4 should be allowed 2 compete in the upper echelons of the premier league surely you do not want the premier league to go as the Scottish premier league as the champions are already know there I thought all competition was meant to be to the betterment of the game from what I understand there are only a few premier clubs with more disposable income than Saints least in league 1 season tickets were affordable I paid over 650 quid for my season ticket as I said at beginning of this im in peace

  • jason t

    Regarding Saints setting their sites low when building St Marys, actually not so, stadium was so built so that capacity can be increased to 50 000 if so desired and that may not be far away now.
    “Nicky” says we are a “small club” ? How so ? Spent vast majority of last 50 years playing top flight football.
    Also he talks of our “sugar dady” presume he means our owners, hardly the same thing !?
    Its exciting times for Southampton f.c fans

  • even tho i’m new to football, from what i’ve read FFP seems more like a formality than a hard-line salary cap. when i first heard of FFP it was in a story about how City is partnering with whoever to start up the 2nd MLS franchise in NYC alongside opening up some academies/schools/whatever. the gist of the article was that City was looking to “diversify its portfolio” in the wake of getting more revenue streams that don’t directly run afoul of FFP.

    lamentably (if it is indeed truly lamentable that the players who play the beautiful game that we love get more $$$ for putting on the show, as opposed to the traditional system where players got wages that were at least somewhat comparable to an average middle class worker, leaving all of the $$$profits$$$ to go to the owners)

    AHEM. yeah, lamentably i think the financial paradigm/s of football aren’t going to change any time soon. FFP is likely more of a marketing exercise if anything (pandering to those ppl who think football is all about the $$$ citing players’ salaries as “out of control” — unwittingly wishing all that $$$ to the owners, who have the supporters doing their work in terms of a mouthpiece) and the teams with relatively-unlimited $$$ are also going to have that relatively-unlimited $$$ to line up expert legal teams to go over FFP and figure out the loopholes that allow business as usual to continue. it is what it is.

    but yeah, like i said in the other thread about arsenal’s finances…. as an arsenal supporter alls i can do is kick back and relax knowing that my team has the financial werewithol to do whatever it needs to do to continue developing the product on the pitch. barring world war 3 or a giant asteroid wiping out earth, arsenal’s going to be in a perpetually bettering position to be able to focus ENTIRELY on football, as money won’t be an object (within reason of course)

    and ummm…. yeah, as an arsenal supporter this southampton thing has me a bit worried. the last thing arsenal needs is another team fighting for those 4 CL spots, as i’m pretty sure the scousers and (to a lesser extent, such as falling out of the top 4) spurs will be there in the end. i have to remind myself that it’s entirely possible for arsenal to run into problems and go from being atop the table back into the scrum and have to go through another run of ~4 cardiac games in order to lock up even the 4th spot.

    i mean to say that yes indeed, that’s POSSIBLE, but hopefully the team hasn’t even come close to showing us its full potential yet, as here we are on 13 october and there hasn’t even been one single game where arsenal trots out its ideal starting XI/subs.

    the southies will continue to be fun to watch develop, just away from our beloved arsenal. if anything, southampton being a legit CL-spot contender = they’re going to give tougher times to the scousers, untied, city, chelsea, and soldado-n-the-boys proper runs for the points, so if they’re able to take away 1-3 points on the road @ the aforementioned teams, well then, en garde and let’s get this show on the road.

    doesn’t southampton have some young ex-united starlet who’s starting to make good on his potential nowadays? i forget dude’s name…. i wanna say morrison or something? ravel? regardless it’s not like the dude’s another pogba for them (it’d be so delicious if united panicked and ran out and spent 30mil/+ on pogba, alongside a big huge salary that they didn’t want to pay him the first time =) as this guy left united via a mutual decision, but still, it’s that much sweeter to see ex-united-players going off and making !!!statements!!! while united’s saddled with a quickly aging team that now has a cartoon character mascot to toss out there and cue up the perpetual loop of yakety sax that plays in all of our heads if we were to stop and listen closely for it.

    seriously, if united continues on this middling path that has them “fighting” for the arse-end of the CL spots (*rimshot*) fellaini is going to become a symbol of the moyes era/experience that people will never forget. thus far he’s looked like a big ol doofus/clown/idiot/nancy out there as he symbolizes the essence of midtable moyes, just like that one poster from the everton pub (available @ http://imgur.com/2kgs9Ed )

    indeed, the phrase “10 years at Everton for boss who proves you don’t need trophies to be a winner but he is a winner” is enough to bring a warm smile to my face no matter what.

    and btw, my bad on another united tangent here but when you’re in a one team league and that one team is scuffling this kind of stuff is going to happen. i was recently accused of being an ABU during their WBA game because i cracked a couple of innocuous jokes about the plight of united. typically united supporters in footy/EPL/CL chats tend to try and stay “above the fray” insomuchas they preside over our discussions, however at this juncture the defense mechanisms are up and now they’re taking notes of who’s saying what and when because when they’re not out there frontrunning ~10pts out ahead of the league and their squad has some very real fundamental issues in its construction, shoot, obviously this is all of us clearly hating united soooooo much that we’re showing our true colors now. and of course we have to cheer against united because we have had nothing to cheer about for the last ~8 years. lol.

    if anything, the one team that i’m really rooting against this year is the scousers. the pedantic overtones eminating from rodgers/henry during that suarez x-fer debacle coupled with my introduction to RAWK and other liverpudlian digihangouts = seriously F those guys. i’ve since come to learn of the scouse boom/bust cycle and find out that this kind of behaviour happens every year, however i’m starting to think that there might be a little something to their squad, especially as bitey mcf*ckyourrace comes back to man the ship alongside a surprisingly supereffective daniel sturridge.

    so yeah, liverpool is the one team i wanna see crash and burn this year. also, during my first year of watching the EPL last year i had this overwhelming gut feeling that rooting against city just felt so damn right, you know, there’s just something about them being a mercenary squad with a sugar daddy owner in those ugly kits, and IIRC these owners showed up and essentially bought all of their recent/ish success. it’s not like city had any sort of legendary bigtime tradition going on, and while they’ve been around forever, they only somewhat-recently stepped up from another perpetually middling/relegation-zoned nondescript team.

    so yeah, tl;dr = go sundy and take some of those road points @the top 6, FFP is a formality, and of course…. while i’m roughly 10% going out of my way to crack a few jokes at the expense of the fighting moyeses, i’m not an ABU. if city’s a mercenary squad and chelsea is abramovich’s toy (mainly owned to accrue political capital, if not money laundering or something) then at least united feels more…. english than the others. i mean, they strike me as a club more similar to arsenal than city or chelsea (they develop some of their own kids, meaning that their model of success is more than just going out and spending top market dollar on whoever’s the sexy signing of the moment)

    or better yet, united feels more like a football club in the business of football than city and chelsea and, evidently, now southampton. these guys with unlimited $$$ operate on another plane of financial existence… and that’s easy to root against, especially when you realize that many times going out and doing the best job possible with your football team is irrelevant because those sugar daddy teams just went out and dropped another 100mil on the table to reload for another run at the title.

    southampton is the beneficiary of being the new kid on the block who doesn’t draw the ire of the anti-sugar-daddy crowd simply because they’re the new kid on the block. outside of the top-6 fandoms i reckon there’s a whole lot of people who would love for ANYONE new to step up and provide a legitimate challenge for the PL/CL simply because they’re not part of the established top-6. if they keep on sugar-daddying it up and stick around for a few years then that feelgood sentimentality will go away as they’ll be lumped into the chelsea/city pile as another toy to the billionaire/s.

    naturally, there’s only one team with a pure soul who you can unquestionably root for as being what’s right with modern football. indeed, there is a club who like david moyes b4 them has proven that you don’t need trophies to be a winner (but you are a winner! =) — a club who has avoided selling out to become another rich man’s plaything (usmanov. gotta love it when piers morgan beats the drum for arsenal to lose its identity via being sold to a single sugar daddy owner. piers would rather have glory than self-respect, evidently)

    AHEM. yes, there is only one team in all of the land who does it right whether it’s in the boardroom, with the checkbook, or on the pitch. there’s only one team in the upper tier of english football who has what it takes to not only exist, but moreover SUCCEED in this era of oil daddy football…. and that team is the mighty arsenal! come on you gunners!

  • AL

    This is the reason UA is the best, another eye-opening article. You’re unlikely to find this kind of article anywhere else but here. Keep up the good work guys.

  • Colin

    Excellent balanced article..very unusual to find one when people are talking about the Saints.
    As a Saints fan we know we have been lucky to have been rescued by Marcus Liebherr, who by all counts was a gentleman and lover of football. He didn’t buy Saints to promote his own ego….if ego was part of it why would buy Saints!
    It is interesting how there are fans of ‘large’ clubs like Nicky above, that as soon as there are threats from other clubs of breaking the monopoly the top four (now becoming top six) become very defensive and making comments such as: …’small club like Southampton joining in, via its sugar daddy’. Where else are we supposed to get the money from. There are only a few clubs living in conurbations/cities with massive populations. And providing the club is well managed financially (which Saints is)where is the problem? The Liebherr’s have stated from day one that Saints have to be shelf financing. I don’t know the ins and out of the FFP but it does seem to favour the large clubs again.
    I am a season ticket holder at Saints and having been for the past 12 years but live in London…and hear this type of rubbish being spouted by the glory fans (I don’t mean the fans that go to games every week) all the time. Nicky I think you need to take a leaf out of Tony’s book (or article above) and take off your blinkered glasses (oh…I love a cliché)and realise the rest of the league isn’t there just to make up the numbers.
    There will be a ‘SMALL’ club whether it be Saints or another that will come knocking and in Nicky’s own words ‘for the good of the game it cannot come too soon’.
    Good luck Arsenal going to be a close run thing for the title this year…..but you heard it hear first Saints V Man Utd on last day of the season to be the title decider….well we can all dream and what’s the point of turning up every Saturday if we don’t have dreams.
    Come on you Saints.

  • Drew Gray

    very interesting article and comments (sorry Awesome, but you insist on writing ‘comments’ that are longer than the original article I will continue to ignore it..)

    Saints fans can be rightly proud of what their team has achieved in the last few seasons, especially when they look across at the mess that is Pompey. I am hoping to visit St Mary’s for the first time in January to see it for myself.

    There are no ‘small’ clubs in the PL only clubs. There are however ‘bigger’ or ‘richer’ clubs. Colin makes a very fair point, given the catchment area Saints do very well but have to get their money somehow. I hope they win all but two of their remaining league games this season!

  • nicky

    For those Southampton FC fans, I didn’t use the “small club” term in derogatory way.
    I was merely trying to emphasise the often adverse effect rich owners of clubs have on the professional game, via the inflated cost of buying players and also their wages.
    This seems to lead inevitably to hostility towards the FFP Regulations i.e. the point raised in Tony’s post.

  • Brickfields Gunners

    ecard text: One day I hope to understand the phrase “more money, more problems.”

    http://www.rottenecards.com/card/282371/one-day-i-hope-to-understand-t

  • Sav from Australia

    Good article Tony and no doubt you are ahead of the journalistic curve once again.

    I for one do not think we can classify Southampton’s ownership in the same category as Chelsea and Man City (and all the others) because, as far as I know – which is that you said they were a construction firm – it is not oil money. They seem to be spending, moving forward and playing good, attractive, football – but not spending lavishly.

    I actually find them really attractive to watch and after Arsenal, I have also been enjoying their football this season. And I noticed, in the games I have seen at least, that they really don’t cheat the way certain other teams do. They seem to have a good football ethos, and I will always respect such values.

    And I love an underdog. I hope they do well and I hope they finish well – which is to say, second this season. Behind Arsenal.

  • Harrovian

    Saints are building slowly on a sound self financing basis after a couple of years where cash injection was needed to improve the squad. The stated preference is to continue to produce excellent academy players to supplement occasional purchases. If there is a better model I’d like to see it.

  • Premier league fairplay rules allow clubs to spend all their commercial/sponsorship revenue on wages, its only the TV revenue that is curtailed by a 4mil pound increase year on year , that too only if the clubs current wage bill is > 52 mil pound. So expect St Mary’s to be renamed “The Mali” and given a 50 Mil pound a year for stadium naming rights and wallah they are within fairplay rules.

    That is how every other team is doing it so why not saints.