Southampton Football Club's accounts for the year ending June 2019 are released

This shows a £65m swing from last year’s accounts which saw the club make a post-tax profit of £29m.

The Saints hierarchy put this dramatic plunge down to player trading, with Virgil van Dijk’s £75m transfer fee propping up the previous set of accounts.

They feel as though this year’s figures haven’t been helped by their failure to find buyers for the likes of Mario Lemina, Guido Carrillo, Fraser Forster and Wesley Hoedt.

As well as that, the St Mary’s side also saw a decrease in overall revenue which has led to player wages creeping up to 77 per cent of their expenditure, even though the players have continued to struggle on the pitch.

Despite the headline £34m loss, the club’s overall debt has decreased from £19.8m to £14.5m.

The other key points worth noting are:

• Gao Jisheng hasn’t invested any money into the club but also hasn’t taken any out
• Money owed in player transfers has increased from £74m to £90m
• Les Reed received a £365,000 pay off
• Ralph Krueger was given a £92,000 pay rise, taking his salary to £728,000, before leaving the club
• Matchday revenue took a hit and stands at £17m compared to £19.2m
• Commercial income grew to £18.4m from £14.9m

With the accounts only providing a snapshot in time, the club’s managing director, Toby Steele, explained why there has been a £65m swing which has resulted in a significant loss.

“From the club's perspective, our revenues have been fairly similar year-on-year,” he told the Daily Echo. “We’ve had a small decrease this year which is primarily down to being on television fewer times.

“Most of that movement in a profit of £29m to a loss of £34m is to do with player trading.

“Whereas in the prior year, for example, we made a profit of £69 million in player sales, this year it’s dropped to £21 million. That’s made up of a couple of reasons.

“The first one is that we sold Virgil van Dijk in the previous year which generated a large profit and we also had another couple of players that we sold in that year.

“This year we wanted to sell a few more players but they’ve ended up going out on loan.

“The fact is we have five players out on loan that we couldn’t sell but had we managed to do that before the end of the year then that profit would have been perfect.

“The other thing to talk about is that what we are seeing in the European market is a reluctance from clubs wanting to buy players.

“Non-UK players are saying they’d love to take a certain player off you but then say they can’t match the valuation or pay his wages. Then they say that they’ll take him on loan and pay his wages.

“If you look at the accounts that have recently been published, Leicester made a loss and Everton made a big loss.

“Liverpool only made a small profit despite winning the Champions League. Watford made a small profit, but they received a big fee for Richarlison.

“I think we are all in a similar position because of how the market has changed compared to where it was two to three years ago.”

Steele also wanted to reassure supporters that the £34m loss shouldn’t cause any panic.

“We are not in a dire financial position,” he stressed.

“Our transfer liabilities – what we’ve got to payout – is bigger than the amounts we’ve got to receive. But we’ve got five very marketable players out on loan and have a solid asset base.

“From the club financial perspective, we aren’t seeing anything to be nervous or worried about.”

In terms of being on TV less frequently, Saints were screened eight times for the year ending June 2019, compared to 16 times the previous year.

However, all clubs receive the same amount of money for 10 matches, and if you are picked more than that, you are paid roughly just under £1m per game.

There has been recent speculation that majority shareholder Gao was interested in selling Saints at around £250 million.

This has since been dismissed but it’s worth pointing out that behind the scenes there is an attitude of everything has its price.

Gao has always wanted the club to run as a self-sustaining business which means he won’t put any money in.

Instead, Saints rely on the money they make from player sales so that they can invest it back into the squad.

However, the fees they received for the year ending June 2019 took a massive hit and its not as though they have another Van Dijk they can sell.

Despite the continued lack of investment from Saints’ majority shareholder, Steele insisted the Chinese businessman remains committed and is aware of the £34m loss.

“He, as any owner would do, has made sure that we have plans in process to mitigate that.

“He is concerned as any owner would be. He’s not just sitting there and allowing us to deal with it, it’s certainly on his agenda.

“Granted, he isn’t putting money in, but we’ve been open about running on a sustainable basis and spending what we make.

“I think these accounts prove that we have made money in recent seasons and that we are investing it in players.

“Yes, we haven’t sold players, but we have been true to our word about investing in players to try and get us higher up the league.

“I’d be disappointed if people were to look at this and think we haven’t invested because we definitely have.”

Steele also dismissed the notion that Gao has put his 80 per cent stake in the club up for sale, adding: “We, as a board of directors, haven’t been given any indication that he is looking to [sell].

“I can’t comment on that as it’s not something we are party to.

“If there were to be a sale then, of course, the club would have to be involved in terms of providing information to a potential buyer, but we haven’t been asked to do that.”

Due to the club already owing £90m in transfer fees, it could be said that any planned business for the summer will need re-evaluating.

However, Steele isn’t expecting this to be the case.

There is still hope that they will be able to sell the likes of Lemina, who is on loan in Turkey with Galatasaray, Hoedt and £20m flop Carrillo.

But if this proves to be a difficult task, as it did last summer, the reality is that Hasenhuttl won’t have a budget to greatly improve the squad.

Asked whether the £90m owed will be a problem in when the transfer window opens, Steele explained: “I’m not expecting it to, but it depends on what business we want to do which I know is a very generic answer.

“But if we sit here and say in the summer that we are happy with the squad and we don’t want to may any changes then it won’t be a problem.

“If we were to say we want to significantly strengthen, then, of course, it will be a factor. We need to realise value for the players out on loan or the ones that are in the squad.”

Due to the overall revenue falling, it meant that the percentage of player’s wages went up.

This continues the trend of recent seasons but there also hasn’t been any success on the pitch to justify the increased expenditure.

Saints managed to finish 16th in the Premier League last season, which is just one place higher than they managed in 2017/18.

It looks as though they are again on course to avoid relegation at the end of this campaign as they are currently seven points above the drop zone with just nine games to go.

“Our wages increased by £900,000 and if you look back over recent seasons they have gone up pretty significantly in terms of several million pounds,” explained Saints’ managing director.

“In real terms, we have reduced our wages base down because that £900,000 is made up of two things.

“We pay a bonus based on final league position and we finished one place higher, so the bonus will be bigger.

“But also, there are a lot of players that, when they hit a certain number of appearances, their salary goes up.

“For our wages to have only gone up by £900,000, when you factor in those two things, you can see we’ve taken out quite a lot of cost.

“I think it’s a fair question about whether our performances are effectively justifying our salary. Our salary base reflects a higher league position than we have achieved.

“We have underperformed in terms of the salaries we have been paying but we’ve seen a more consistent performance from the playing squad which reflects on where we are in the league.

“It feels as though we are getting back closer to where we should be.”