‘What is it they say?’ asks Andy Ambler from the newly-refurbished facilities at Craven Cottage, Fulham Football Club’s historic Thames-side home. ‘How do you make a small fortune out of football? Start with a large one.’
This may be an old footballing fable – but it has rung true over the last few turbulent years of the beautiful game. It highlights how our national sport has changed from the days of flat-capped crowds crammed on to huge terraces to the modern era of hi-tech, all-seater stadiums with electronic roofs, hotels, restaurants, hospitality suites and £100,000-a-week player contracts.
A twist on the famous Bill Shankly quote might go: ‘Football is not just a matter of life and death, it’s more than that – it’s a business.’
Fulham’s finance director is more than aware of the business side of the game, as well as the sweeping changes that have take place since the Premiership was formed a decade ago. Having been in charge of the club’s books since the days when the Cottagers were playing first-division football in 1999, he believes being in the top flight is crucial to survival, as well as profitability.
‘The change in divisions has meant vast sums of cash from our chairman as a result of having to compete in the Premiership. These days, the gulf is so big that getting promoted isn’t enough, you have to inject capital to strengthen your team to compete – especially if you’re a club that has uncertainty over its stadium. You have to be in the Premiership.’
The 125-year-old club, one mile down the road from its nearest rivals and big spenders Chelsea, has moved on since the days of mediocre mid-tabledom in the old Third Division. This is mainly due to the influence of one man, and the club’s single shareholder, Mohammed Al Fayed. The Harrods owner who has ploughed vast sums of money into the club since he bought it in 1997.
‘If he hadn’t turned up, Fulham would probably be languishing in the Third Division or non-league football. But who can say? Someone else might have come along instead,’ says Ambler. Although if Al Fayed hadn’t invested money in the club, and oil billionaire Roman Abramovich hadn’t done the same with Fulham’s Kings Road neighbours Chelsea, both clubs may now have been struggling to cope with mounting debts like Leeds United and Bradford City.
This prompts the question fans, banks and football’s financiers desperately want to know – what would happen if these wealthy investors grew tired of the clubs and left them in financial limbo?
Ambler is unconvinced this could ever happen. ‘As a company that trades with negative assets, our going concern is that the chairman has to say he will support us for the next 15 to 18-month period when we sign off the accounts, otherwise we can’t operate the way we do. We always get his support on an annual basis to carry on. That’s how we operate.’
‘Having one major shareholder works,’ adds Ambler. ‘He’s definitely in it for the long run, because he’s invested heavily in the club and he’s also just spent a lot of money for us to get back to the Cottage.
‘He has a genuine love affair with Fulham and I can guarantee that just from talking to him. He’s very hands on and it’s more than just a business for him. But equally, we run it as a business for him.’
Al Fayed’s influence is huge, and clear for all to see – both on and off the pitch. The club, which finished ninth last season, has made a number of new high-profile signings including former Manchester United striker Andy Cole and, most importantly, seen a long awaited return to a rejuvenated Craven Cottage after two years of ground sharing with Queens Park Rangers.
‘On the field you can say we’ve achieved – but the real turmoil for the club has been the ground. It wasn’t suitable for the Premiership because it only had 7,000 seats and the rest was terracing, but at the same time it was a ground dear to all our hearts.’
Fulham had two choices: either renovate the ground and extend it to a 28,000 all-seater stadium for a vast amount of capital, or rent a shared home with another London club. The board’s conclusion was obvious, says Ambler.
‘I don’t think it was a huge mistake – but I don’t think we had a choice. We had to move to Loftus Road because it was an all-seater stadium. However, the truth is that, if we had continued to ground share, our supporter base would have severely declined and the attraction would have disappeared.
‘Ground sharing doesn’t help increase your fan base, because it’s not your home and you’re just a tenant, although I think ground sharing can work if two clubs go into a project with a new site, so they can start afresh.’
Losing fans was a huge worry for Fulham’s senior management, as it would have meant both a loss of support and, crucially, the loss of much-needed revenue.
‘How to generate the supporter base is a problem because you need to constantly build on it. Normally, getting to the Premiership, doing well and playing top clubs week in week out, you automatically gain support. However, supporters these days expect a certain level of standards and facilities. We weren’t able to offer that at the old Craven Cottage because of the open, standing terraces.’
Fortunately, £8m has been spent on redeveloping the stadium. It now has a seating capacity of 22,000 in colour coordinated black and white, with new corporate boxes costing up to £36,000 per season and space for Thames-side restaurants. The Cottage – a listed building showing off one of the most historic views in British football – has been completely refurbished.
‘£8m was good value to get us back to where we wanted to be,’ says Ambler. ‘It’s fantastic but it’s only a base – the start of a plan where we can try and increase the generation of revenue from the main asset, which is the stadium.
‘We are looking at ways we can stay at Craven Cottage, while playing in the Premiership and increasing revenues generated from the stadium, to carry on competing and being financially viable.’
Alternative sources of revenue are essential to the continual flow of money into football clubs, although this is further emphasised when you examine the Cottage’s capacity (by far the smallest in the Premiership) compared with the giants of the game like Manchester United, Chelsea and Arsenal.
With a capacity of around 60,000, Arsenal’s new stadium will reportedly earn the North London club a gate receipt figure of £1m. Can a club of Fulham’s size really compete with that? Ambler avoids a comparison and believes each club should concentrate on its own figures and financial state of affairs. But he remains realistic over how a combination of ticket sales, capacity and a large fan base can earn a club a substantial amount of revenue.
‘In the Premiership you need more capacity than we’ve got. If you look around we’re still going to be the lowest capacity stadium by quite a way, even though we spent this money on it.
‘But we hope to increase it. We’re now back at home. What we need to do now is find ways of improving on the stadium in terms of capacity and facilities, so fill it every week and make sure we move it forward and increase our revenue generation. This includes using it more than just 20 times a year during matches.
‘How can we compete? That’s the million-dollar question,’ sighs Ambler. ‘In a way, we can’t compete with a lot of the bigger clubs, but we have to thrive in our own environment. You’ve got to fill your capacity, and above all, you have to build on your supporter base. You have to have a capacity in the high 20s and we’re aiming to do that here. This is very important because it’s our home. But then, you have to make it work very hard for you on non-match days as well.’
Ambler’s realism extends to the playing staff and its potential achievements over the forthcoming season. ‘It’s also about your management team and how you achieve that with a squad you can afford. No one’s saying that we’re going to win the Premiership or qualify for Europe every year, but to remain a Premiership club and balance the books at this level would be an achievement – this is the definite priority.
‘There are cases where we’ve made mistakes when signing players for too much money. I don’t think you’ve seen that with Fulham for the past couple of years and that’s a result of going through the learning process,’ says Ambler.
‘We haven’t got much in debt outside of our shareholder’s control. We operate without a bank overdraft and the vast percentage of our debts are owed to one man who’s happy to continue investing in the football club – we’re not the norm and are in a rather unique position but that’s the way it is.’
Ambler is right. In the wake of several clubs drifting in and out of administration, and even facing possible expulsion from the League, Fulham is set to make a rare and minor, but very positive, profit.
Perhaps other clubs should take note of its off-field performance – if you look after your own interests, football is not always a bad place to be.
AMBLER ON …
The boardroom: I think football has turned a corner. More sensible people, including boards of directors and chief executives, are joining and realising that budgets are there to be adhered to and you can’t just go chasing superstars and pay them ridiculous amounts. You must balance the books.
Budgeting: We finished ninth last year and take a very careful view of realistic budgeting. We would always budget to be mid-to-low table. But just because we were ninth, we’re not going to do what seemed to happen at Leeds United and say next year we’ll be seventh, then fifth, then Champions League.
Wages: Football has to start working towards a bigger percentage of the contracts being incentivised. Managers should be rewarded for success and you should build a contract whereby in case of relegation, base pay is reduced.
Income: The major part of our income is Sky TV money. A quarter of it gets distributed on merit award – the higher you finish, the more money you receive. For Fulham it’s around 15% (close to £6m) of our annual turnover.
Foreign investors: We’re not seeing British football being run by British business people, but this isn’t a bad thing for the game. Roman Abramovich bringing his money into this country can’t be bad.
Tax relief: Football puts an enormous amount of cash into the Treasury. I would like to see relief for the shareholder who’s actually putting money in. It’s one of the solutions to help the smaller clubs.
THE MODERN ERA: There are so many diverse areas of business nowadays. You’re a retailer with merchandise, a box office for tickets, a publisher with the programme, magazines, TV and website, as well as an entertainer and caterer. You’ve got your own marketing and sales departments to fill the corporate areas and a huge variety of areas of industry rolled into one.
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