Monday 28 September 2009
From the Histon programme
After home games we sometimes publish articles from the programme that provide news or information about the club and Trust and which haven't previously appeared on this site.
This feature updates fans about what we are doing, or not doing, with the money that the Premier League has given to support Conference clubs.
MONEY, MONEY, MONEY …
A windfall from the Premier League is softening the blow of losing the Setanta TV money. Chief executive Erik Samuelson looks at how this affects the club’s finances.
Last week the Premier League announced that it was making a donation of £1 million, to be distributed among Conference clubs. The payment was made “to soften the financial blow which clubs in the Football Conference, competing in the Blue Square Premier, North and South, have suffered this season due to unfortunate economic circumstances”. Those “circumstances” include the demise of Setanta and the consequent loss of income that Conference clubs had been expecting (or at least hoping for).
Our share of the Premier League payment is £30,000, for which we thank them. I always assume that the details of such deals are confidential, but so many clubs have announced the amount on their websites that we may as well quote it too. The question is, what will we do with it? To answer that, I need to step back to our original budget for the current season. As I’ve said before, in March we prepared three budgets: one for if we were promoted, one for if we were not, and the third for if we were promoted but Setanta went under.
When Terry Brown was ready to negotiate players’ contracts, we still weren’t sure about Setanta’s fate, so we talked the issue through with the Dons Trust board. We all agreed that while things might get a bit bloody, we could live with the consequences if the TV money didn’t materialise. In practice, it meant that the profit we were budgeting for in 2009/10 would turn into a fairly hefty loss if we got no TV money, but we were expecting a good profit from 2008/09, and when the two years were looked at together we seemed to be fine.
As it turns out, we will still be getting some sponsorship money from the Conference, but it’s £98,000 less than we budgeted for. That’s quite a sum to lose, but at least we had thought it through. Also, by the time we finally signed off the playing budget it was clear that season ticket sales were booming (today they stand at 2,530), so we knew we had something in reserve.
At the Dons Trust board meeting in September I presented a forecast for 2009/10 that takes into account several things that have changed since the original budget was prepared. As well as the loss of TV income, stewarding and policing costs are clearly going to be higher than we’d budgeted for, but the good news is that we are now confident of a much higher average attendance than we’d estimated – the forecast now assumes an average home gate of 3,650.
The forecast for the year now shows a profit of £1,500 before depreciation. That’s not a lot, but it is a profit, not a loss. And remember – this is after making sure that Terry’s playing budget remains completely intact. However, and unusually, for once I think that parts of our forecast are a little optimistic. So the £30,000 windfall is a very welcome cushion against any over-optimism on the part of the AFC Wimbledon board.
The short answer to what will we do with the £30,000 is, “We’ll keep it in our back pockets and see how the season progresses.” Because we already knew that we were financially stable, we felt that the loss of TV income was likely to have a bigger effect on other clubs than it would on us, and that they might have to cut wage bills and release players, which could help us. But we can hold back the £30,000 in case of an unexpected downturn in our finances. And if we decide that we can afford to invest it, there are plenty of candidates for expenditure, not all of them new players!