It is with great sadness that I have to report this week’s reflections on the events of the past seven days are not being written from a palm-fringed beach aside the Caribbean.
Despite laying out what some might consider a rather attractive offer in the last ‘Week That Was’ column, the author remains unsponsored and therefore remains in need of gainful employment. Should you wish to change this situation…well, you know where I am.
The week after Deloitte & Touche published its Money List of the top earning European soccer clubs, Arsenal – the London club that lost somewhat messily in a Champions League game in Munich on Tuesday - announced that it had turned in a £2million profit in the past six months trading. That turns round a £4.9million loss and bodes well for what promises to be a massive revenue growth spurt when the club moves to its new, Emirates-sponsored stadium for the 2006-07 season.
Leaving aside the additional money they’ll make from sales of replicas when they resort to their original colours of burgundy(ish) for one year only, Arsenal has every reason to be optimistic about their ability to move out of the pack and join the leaders in the Money List.
Recent figures state that Chelsea makes, on average, £1,300 revenue per seat per season at its Stamford bridge stadium. That’s a great art because Chelsea has some of the highest ticket prices in the universe.
But for ease, and in recognition of the mathematically challenged, let’s reduce that figure to £1,000 per seat. There’s a simple formula that suggests that if you build 1,000 more seats you should generate an additional £1million of income.
So when Arsenal move to the Emirates Stadium it will have an additional 22,000 seats to sell and a good chance of adding at least £22million to their annual income. Now that may be more than a little simplistic but it does serve to emphasise the importance of matchday revenues to the overall income balance of football clubs.
The English clubs, which made up a half of the Deloitte & Touche Top 20, managed to generate a consistently high proportion of their total revenue from matchday revenues, unlike some of the Italian giants whose place in the table was due almost entirely to massive broadcast and commercial (sponsorship) revenues.
But the Italians will not stand still. Inter Milan are already agitating for a move from the San Siro and you can be sure that any new stadium would be crammed full of catering and merchandising outlets, club seats, private boxes and restaurants designed to provide every opportunity for fans to empty their wallets. When this happens the Top 20 is likely to change again.
The principle of generating matchday revenue was once explained to me by a German expert on these matters. He put it all down to “selling sausages…and beer.”
It’s not rocket science. Get fans into the stadium early, make it as easy as possible to buy food, drink and merchandise and you can add hugely to the ticket revenue. That’s particularly important in those European markets where the price of entry is significantly lower than, for example, the FA Premier League.
One would imagine that Arsenal will do well for another reason. Tickets for Highbury are notoriously hard to come by and a high proportion goes to season-ticket holders or regular attendees.
On the basis that there are only so many replica shirts, scarves etc that any one person will buy, it is important to have the additional capacity in the stadium to accommodate more casual visitors. They’re the ones who will plan their visit to the stadium well in advance and cart off half the contents of the club shop for friends and relatives back home. If you can sell one seat to 20 different, new customers during the season the value of the seat remains constant but the incremental revenue rises considerably.
So it’s not just about sausages and beer after all.
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News this week is that Sepp Blatter wants referees to be paid Euros100,000-a- year - or a little over £70,000 – to reduce the likelihood of them being bribed.
His comments were designed to put referees close to the top of soccer’s agenda in the light of a growing scandal in Germany, following the discovery that a young referee had effectively fixed a cup game between regional league club, Padderborn, and Bundesliga giants Hamburg SV.
In the real world this isn’t a problem that is going to be fixed with money…and certainly not £70,000.
To start with – according to a report in today’s Times newspaper – referees in England’s Premier League are already on that sort of money if one counts their retainer and appearance fees.
It would be nice to imagine that the amount of money is unimportant. That moral standards hold fast irrespective of the sum involved and – in this instance – the gap between a referee’s financial reality and the riches he may be offered.
But money talks. There’s a well-known story in which a guy, any guy, approaches a woman and asks whether she would sleep with him for £1million.
She thinks it over and replies that she would.
So the guy asks whether she would sleep with him for £1.
“What do you think I am, a whore?” the girl responds.
“We’ve already established that,” he answers. “Now we’re just haggling about the price.”
