Kieran Maguire: how every South East team is financially positioned for the transfer window

Football finance expert and Price of Football author Kieran Maguire looks at the finances of Southampton FC, Brighton & Hove Albion FC, AFC Bournemouth , Reading FC, Portsmouth FC and Oxford United ahead of the football transfer window opening on June 10.

Now that the football season is over, fans and other interested parties can start with the serious business of deciding who their clubs should buy and sell in the summer transfer market. Social media rumours, Transfermarkt, and grainy YouTube clips will be scrutinised in order to assess the suitability or not of players arriving or leaving individual clubs, but what about the financial position of clubs in our area?

READ MORE: How much prize money each South East club won last season

Southampton

Southampton have new owners, following the acquisition of the club at the start of 2022 by Sport Republic, controlled by Serbian television tycoon (all media owners are addressed as ‘tycoons’) Dragan Solak, who fans hope will be enthusiastic in terms of increasing recruitment following the Saints somewhat humdrum 15th place finish in 2021/22.

Solak inherited a club which had made a pre-tax loss of £140 million in the previous three seasons, despite regular player sales which helped reduce the losses. However player purchases were modest by Premier League standards and this meant the club had a squad cost which was broadly in line with its final league position.

Under Southampton’s previous owner Gao Jisheng Southampton had kept wages under tight control, with little change since 2017, a period in which Premier League wage bills have increased by 36%. Whether Solak is willing to increase wages at St Mary’s will determine the calibre of player likely to be recruited.

Brighton

Brighton have just had a best place 9^th  finish in the Premier League, and because of the distribution mode used will have earned additional money as a result. Under owner Tony Bloom the club has had a model of cautious investment in players since being promoted to the top, alongside a bottom six wage budget, which until 2021/21 resulted in a bottom six league position.

The sale of Ben White and Dan Burn in the last twelve months, along with a potential sale this summer of Yves Bissouma and/or Marc Cucurella, who have both attracted admirers, does mean that the club potentially has money to invest in new players. 

Brighton are however hugely indebted to Bloom, who has put over £400 million into his boyhood club, and his decision in terms of how fast he wants the Seagulls to be self sustainable will dictate their spending.

Bournemouth

Bournemouth have returned to the Premier League after two seasons in the Championship. The club had to adjust its business model to the second tier, with wages halving in 2020/21 compared to the previous season, along with significant player sales. 

Despite this Bournemouth still had a squad that cost almost £200 million at the end of 2020/21 and recruited wisely, especially using the loan market, to sign players who brought them promotion. 

Spending this summer is likely to be solid rather than spectacular as many players already in the squad will be entitled to step ups in wages following promotion. However, with so many players returning to their parent clubs following loan spells at Bournemouth manager Scott Parker will have some scope to spend.

Reading

Reading are in a period of retrenchment. They only avoided relegation in 2021/22 because Derby’s 21 point deduction for financial issues significantly exceeded that of the Royals. Reading’s problem has been one of cost control, or to put it more succinctly, a lack of cost control, in relation to wages. 

Reading were in receipt of parachute payments from the Premier League until 2016/17, but since then the club have paid out £114 million in wages, but only generated £53 million in income.

Manager Paul Ince will have some flexibility this summer as there are many players whose contracts on unsustainable wage levels have expired over the last twelve months, but the club is still under an embargo from the EFL for a breach of profitability and sustainability rules, so recruitment will be impacted as a result.

Portsmouth

Portsmouth are still a fairly big fish in the League One pond, but with the likes of Derby, Sheffield Wednesday, Ipswich and Charlton in the division, will not find promotion easy to find or fund. 

Portsmouth were hit hard by Covid, as prior to the pandemic matchday income generated more than half their total income, which is uncommon for a professional club, but a testament to the club’s large support base.

Portsmouth do have cash in the bank and no borrowings, but former Disney supremo and club owner Michael Eisner has stated he wants Pompey to be self sustainable, and losses of over £70,000 a week in 2020/21, certainly impacted by Covid, suggest that spending will not be significant unless there are any major departures too.

Oxford United

Oxford also had substantial losses in 2020/21 of over £70,000 a week, and that is after substantial player sale profits of £1.8 million. The club have the most expensive squad assembled for a few years, but will be unlikely to significantly increase that sum as the main focus will be on cutting costs and debt.

Kieran Maguire is an academic, author, and broadcaster and specialises in the accountancy of association football and authored the book The Price of Football. Alongside comedian Kevin Day, he presents a twice weekly podcast entitled The Price of Football in which football finances are discussed.

Note: The South East includes the circulation area of The Business Magazine which covers the Thames Valley, Solent, Surrey, Kent and Sussex