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Club Update - 11th May

Mon, 11th May 2020 9:03pm

Following the club update on 20th April, a great deal of work has been undertaken to put the club in a position to be able to understand its current position and make some sort of assessment of what remains a highly uncertain future.

Season ticket sales are a lifeline for the club at the commencement of any season. With the current uncertainty we are looking at an innovative way to sell a season ticket that will mean that supporters suffer no loss in value no matter how the season unfolds. This will involve a step away from the traditional book of vouchers towards a more technology driven solution. There are technology options available that offer different solutions and at different costs, with different infrastructure challenges.

We plan to put out more detail on the season tickets format and prices as soon as we are clear on what technology platform we will be able to use. At this point we simply want to say that your support in buying a season ticket will be much more critical than usual and will be a major factor in determining the scale of donations the club will require to see it through the next year, to the commencement of the 2021-22 season.

We have been overwhelmed at the positive backing from supporters in waiving their current season ticket rights and making much needed donations. We thank you for your continued support. We have had great backing from the Glasgow Branch who are working with their members to make group donations and are looking at how they might be able to offer more support to the club. 

It appears that it has come as a surprise to many supporters that the club has always relied on donations to survive, and that the published trading losses were perhaps not fully appreciated across all supporters. We wish to stress that this is not due to underperformance on our normal commercial or other fundraising targets, it is more to do with a simple structural fact that the club only operates any commercial activities on a matchday. We have no capacity to earn anything outside of matchday, whereas our contemporaries around the leagues operate commercial trading activities on multiple days per week at their stadia, including renting out pitches, operating hospitality or conference suites.

Our absence of trading opportunities means that we rely heavily on volunteer driven external fundraising activities such as race nights, golf days, dinners and other events. These events are now at a very high risk given the requirements for social distancing. We have already lost our golf day and end of season dinner.

The board has discovered that previous statements made, that the club was able to benefit commercially from activities and events held at the stadium, were found not to be accurate. The board has also uncovered material transactions of which they were previously unaware and are taking action regarding these.

As indicated on 20th April, the club requires significant donations every season to put a squad together to perform at a competitive level. We are currently working on the assumption that we will require at least a further £50k of donations to complete the 2020-21 season and not less than £75k for each of the following seasons. These amounts are not dissimilar from historic donations received, but they do need to increase to meet the squad costs for a competitive League 1 side.

In due course we hope to be able to launch a regular standing order system to support our donations initiative, so that supporters can give what they can afford on a weekly or monthly basis. The amount that can be raised will determine how much can go towards financing a playing budget. 

The exact impact on the budget for the forthcoming season is highly dependent on the multiple directions that the impact of Covid-19 might dictate. With that in mind we do not intend to launch this initiative until June when we hope to have better sight of what is happening around football in Scotland and also have some clarity on the uptake of season tickets. We will continue to look at alternative approaches and we thank supporters for their ideas to date.

It is perhaps worth repeating that due to the support of the Job Retention Scheme we have been protected from the worst impact of the virus as our single largest cost is payroll. It is also with significant support of sponsors who have paid in advance that our cash position is better than it would normally be at this time. Similarly, the Scottish Cup tie against Celtic gave us a significant uplift. That means that as a club we are not currently in a position of distress. Clearly as soon as the Job Retention Scheme is withdrawn, currently scheduled for the end of June, we could be facing a full wage bill and our cash will deplete very rapidly unless we have income. 

We are in no way presenting a picture of stability and security when we state that there is no current distress, simply that we have been fortunate on timing, and we are using that time as well as we can to prepare and plan ahead for what will be an incredibly difficult time for the club. 

We continue to appreciate that everyone has their own challenges at the moment and as many have said, and we concur, there are more important things than football. It is with that complete understanding that we will be seeking your support, initially to buy season tickets and, in due course, sign up to donate regularly what you can afford, or simply make a one-off donation.

Supporters will appreciate that changing circumstances can have a vast impact on our forecasts. With that in mind we will update again when material new information is available.