Duncan Castles has been speaking on the latest edition of The Transfer Window podcast about various Premier League clubs.
One club he spent a little bit of time on was Southampton, who recently published their financial results.
The results show that the Saints have taken out a huge loan from MSD, which led Castles to talk about it in more detail.
He said: “In those accounts, you will see that Southampton took on a huge loan from the American group MSD of £78.8m.
“That loan is repayable in 2025, and the interest rate on it – according to Southampton’s accounts – is 9.14%. This is at a time when you struggle to get 0.1% from a bank for your savings in the UK.
“Described by one specialist in this area as effectively ‘vulture capitalism’, MSD are taking a big loan on Southampton, which will give them rights to the club, the share capital of the club, I understand, were they to fail to repay that loan.
“The extent of it is remarkable in those 19/20 accounts as well as reporting that their operating loss for that year went up from £60m to £87m. Southampton report that their revenue is down from £150m to £127m.
“So, what they have done there is taken on a loan from one institution, at a huge interest rate that is worth more than half of their revenue in the pre-[pandemic] season.”
Are you concerned about these results?
Yes, the club could be in trouble
No, everything will be fine
TIF Thoughts on Southampton’s finances…
This doesn’t sound good for the club, and it appears that if they fail to pay back MSD, then the club’s future could be in trouble.
You can also clearly see that the Saints have made a huge loss and have also lost a huge amount of revenue, which shows how badly the pandemic has impacted them as a club.
So, Southampton might be doing well on the pitch but off the pitch appear to be really struggling, and we hope they find a way to resolve these financial issues.
With the club in the mix for European football as we near the halfway stage of the season, perhaps there is a viable way out of this for the Saints, though it remains to be seen what the future holds on and off the pitch – and whether the south coast club will continue to prosper in the long term.