A couple of months ago, Southampton Leisure Holdings, the holding company which owns Southampton Football Club went into administration. There was a brief and ineffectual protest from Southampton FC based upon the argument that this particular holding company wasn’t the same as the football club, and that they shouldn’t, therefore, face any sanctions from the Football League. The League, to their credit, decided that they would be the ones to make this decision and, after an independent audit, they confirmed that the two organisations were “inextricably linked”. Their relegation from the Championship was managed of their own accord, meaning that they will start next season ten points behind everyone else in League One.

Any last vestiges of their being no link between the two organisations was confirmed today, when the company’s administrator confirmed that neither the players nor the staff had been paid for the month of May. With the administrators already having confirmed – morally correctly, at least – that no season tickets are to be sold until a resolution to their period in administration has been agreed, it’s starting to look difficult to see how Southampton FC will even be able to start next season unless new buyers for the club can be found. There will be a further meeting on the 5th of June, but we can expect to see redundancies and players leaving the club if there is no change in the next couple of weeks or so.

The adminsitrator confirmed that the club are negotiating a price for the sale of young winger Nathan Dyer to Swansea City for £400,000 in the near future, but the fact that the club will be spending this money on merely surviving for the next few weeks is an indicator of how desperate their position is at present. The story of the negotiations over the sale of Dyer, however, is symptomatic of one of the aspects of what makes life for a clubs in financial trouble so difficult. Southampton aren’t the first club to fall victim of it, and they probably be the last. The sale of Nathan Dyer to Swansea City looks like it will be the start of a Southampton fire sale.

Nathan Dyer is a reasonably highly rated young player. He ran into personal difficulties last year when he was charged with – and plead guilty to – theft charges after an incident in a Southampton night club last year. The result of the same youth system that brought Theo Walcott and Gareth Bale, he lost an FA Youth Cup final for Southampton to Ipswich Town in 2005. In 2007, Steve Claridge’s “Scouting Report” in The Guardian valued him at £1m and, after a loan period at Sheffield United, The Blades had a £1.2m offer for him turned down by Southampton.

His value has dropped somewhat of late. Swansea’s initial bid for Dyer was a mere £200,000, but Southampton held out for £750,000. The final price – if agreed – of £400,000 would mean that Southampton would be losing out by two-thirds on the fee that they rejected from Sheffield United a couple of years ago. This isn’t because he is a worse player than he was then, in spite of his personal problems. He scored four times in twenty-one matches for Swansea this season, and there is a good chance that this Swansea side will feature in at least the Championship play-offs next season. Southampton, however, are not currently a club in a strong negotiation position at present.

This is a fundamental problem for football clubs in financial difficulty, and should be a cautionary tale for others – in particular Newcastle United supporters. The “transfer market” as we know it is best considered in the same respect as a market of constant haggling, like the housing market or the stock market. If a club is known to be in financial trouble, the bare fact of the matter is that the value of their players – which is obviously notional to start with – will start to plummet. The fact that the administrator, whose responsibility is not to the club except in so far as that his job is to pass it on as a going concern if possible, is in charge at the moment only makes Southampton’s plight even more severe.

The biggest irony of all is that Portsmouth have managed to line up another millionaire owner to take them over. There will be more on whether that will work out in the next few days, but these two rivals have not felt this far apart since the early 1980s, when Portsmouth were in the lower divisions and Southampton were competing in the UEFA Cup. It’s difficult to envisage Southampton reaching such lofty heights in the forseeable future. At the moment, they will have achieved something significant if they manage to even start next season.