Saints start to feel relegation pinch

Relegation from the Premier League has cost Southampton ar least £2.7m (€3.9m) so far as they announced pre-tax profits of just £200,000 (€293,000) for the 2004/05 financial year.

Saints were relegated in May after a turbulent season, which prompted a drop in profit from £2.9m (€4.2m) for the previous year.

Turnover fell by £5m (€7.3m) to £44.8m (€65.6m) and many players were released or sold as part of cuts necessary following relegation to the Coca-Cola Championship.

In his statement to shareholders, chairman Rupert Lowe said: “The 2004/05 financial year has seen our club relegated from the FA Premier League to the Championship for the first time in 27 years.

“Our turnover has fallen, largely as a result of finishing 20th in the League, to £44.8m (65.6m) from £49.8m (€72.9m).

“In spite of this the company has achieved a marginal profit, before taxation, of £200,000 (€293,000) versus £2.9m (€4.2m) last year.

“This result has been flattered by an exceptional profit made on the completion and sale of the housing development on the Club’s old ground, The Dell, where we had retained a carried interest in the final outcome.

“The financial effects of relegation are very significant with our broadcasting income likely to drop by approximately £18m (€26.4m) alone.

“On top of this our season ticket sales, corporate hospitality sales, sponsorship sales and almost every other area of our business is likely to suffer.

“This shortfall has, to some extent, been covered by relegation clauses in player contracts, which have reduced our wage costs going forward.”

Lowe believes the recruitment of rugby World Cup-winning England coach Clive Woodward to the coaching set-up at St Mary’s will aid the club’s long-term development, particularly within the academy system.

“I am delighted that Clive Woodward has joined us to help us to achieve this aim. We have been fortunate that Clive has chosen to make the switch from rugby to football and even more fortunate that he has chosen to join our club,” he said.

“He and Harry Redknapp have been in regular contact over the past nine months and working together will, I believe, be beneficial for both our immediate promotion push and our longer term structural improvement.”