SUFC: The Future Sustainability of the club

[rigsby]

So for years fans were demanding we have our club back and not be famous for 20+ court appearances and embargoes......Less than month after COSU have taken over people are demanding Wrexham style spending as its the only way to escape the "horror" of the NL.

For every Wrexham there is a Grimsby. For every Chesterfield a Bromley.....Sutton, Barrow Harrogate etc.
Wrexham have always been a bigger club and better supported than us. Yes they hit hard times and spent 13? seasons in the NL but there history didn't disappear. Same for Luton, Bristol R and several others.

Im told Wrexham sold 250,000 replica shirts in the US during their promotion season. We are happy with 2,000. We are Southend United so b*****s to the big spenders. Let them get on with it and look forward to a packed RH when we beat them.

 

[macima]

The way you punch above your weight is to be more efficient.

Most teams are incredibly inefficient. Look at the way most teams change managers every 18 months (or less). Regularly changing managers is inefficient. You pay off the old guy and his staff and get in a whole new lot of staff. The new manager then wants a different style of football so you need a different set of players for it so you end up paying up contracts and paying new signing on fees for players to replace them. That’s inefficient to be doing every year.

The Cowley's at Col U will be an interesting case to watch. From what I can tell, they've come in and turned-over quite a few players who don't fit their style.

 

[edwardss2]

I think that Walsall have been profitable on a much smaller fan-base than ours. It would be good to know where all the ticket money has gone.

RH is probably a major issue here, even quite small clubs have facilities that can be hired out for events - having a large ground that is only used once every 2-weeks for half of the year is madness. The NHS for example never has enough space for all the meetings that the NHS seems to need, weddings, conferences etc. can bring in a lot of cash if you have the right facilities. RH does have the advantage of parking onsite but obviously lacks the facilities at the moment. I am not sure how many equivalent venues there are in Southend.

A (possibly the) major issue for us is that although the surrounding areas are very wealthy, Southend is a poor place. The Centre for Cities have calculated that Southend has the lowest productivity of any city in the UK, and the second lowest wages. Southend has very few manufacturing jobs, and hardly any knowledge sector jobs. This probably limits the cash that the club can get from businesses in the city. Maybe they could go further afield, but you probably run into West Ham country quite quickly.

We have been as poorly served by our politicians as we have by our chairman. We should really demand better from all.

 

[Holy Joe]

Good point on the car park being very useful for the non match day revenue generating. Unfortunately I think the plan is to shrink the car park. Some of it for non and match day revenue generating stuff (fanzone) but I also suspect some flats will go up as well. Hopefully car park will remain big enough to support large events such as weddings and conferences.

 

[edwardss2]

I speak from a position of knowing nothing about the hospitality sector, but I can't imagine the margins on selling beer, tea and things to fans every other week are very large. You could open more often, but the local pubs might have a view on this. Does anyone know how much profit could be made from the 'average' fan under different spending assumptions?

 

[LBBlue]

Here’s something from a year ago to put some perspective on the industry.

 

[jarriss]

I always thought the new training ground site is a great opportunity for 24/7 revenue... if the right facilities were built. Hall hire for parties/weddings/wakes (crem just down the road), weekday pub lunch for industrial estate, evening/weekend pub meals for new housing estates (if/when built). Gym. 2nd club shop/ticket office?

 

[in the know]

I believe the owner of Walsall also owned a chunk of the industrial businesses surrounding the ground and definitely owned the 'motel' next to the ground where any players were allowed to stay if need be instead of travelling in from longer distances. (Bit of a nasty £50 per night job ). These would provide profit and loss making opportunities to balance the books.
We know at one time Ron had 50+ companies and juggled loans advances and debts. At this new beginning, COSU hasn't had chance to enable any other related income earning streams, but I'm sure they will come when the East is redeveloped. But for the immediate future it probably means staying very much within constraining budgets.

 

[rigsby]

I think that Walsall have been profitable on a much smaller fan-base than ours. It would be good to know where all the ticket money has gone.

RH is probably a major issue here, even quite small clubs have facilities that can be hired out for events - having a large ground that is only used once every 2-weeks for half of the year is madness. The NHS for example never has enough space for all the meetings that the NHS seems to need, weddings, conferences etc. can bring in a lot of cash if you have the right facilities. RH does have the advantage of parking onsite but obviously lacks the facilities at the moment. I am not sure how many equivalent venues there are in Southend.

A (possibly the) major issue for us is that although the surrounding areas are very wealthy, Southend is a poor place. The Centre for Cities have calculated that Southend has the lowest productivity of any city in the UK, and the second lowest wages. Southend has very few manufacturing jobs, and hardly any knowledge sector jobs. This probably limits the cash that the club can get from businesses in the city. Maybe they could go further afield, but you probably run into West Ham country quite quickly.

We have been as poorly served by our politicians as we have by our chairman. We should really demand better from all.

I have been in their main stand and like Shrewsbury its 10x bigger than the far post. Even has stage at the end so presumably they can have bands as well as weddings and conferences.

You don't have to pre book a meal. Once we see the quality being served we pilled in. That will certainly work and boost revenue in the future. But like others have said it can only happen when the East is redeveloped. Until then it seem pointless even trying to spend our way to L1.

We will make the play-offs this season but next year will be the one to really have a go. Beyond L2 can wait until the RH is fully functioning under the COSU plan. If that not good enough for some then they are not true fan anyway.

 

[Tommy2holes]

COSU will run the club very well.
Brilliant news.
However the 'spend' required to get us out of the NL will not be forthcoming, meaning every season we can just copy and paste....insert team name are spending big, paying silly money etc etc. Leaving us competitive but not successful but also very well run with regards to budgets etc. Then how long will we get 4.5k season tickets with perpetual NL football.
Not a criticism, greatful to have the mew owners etc BUT those clubs with wealthy backers willing to spunk millions will get the big signings that will ultimately win promotion.

Exactly how I see it.

We need out of the national league quickly. If we are to continue an upward trajectory.

Oldham got new owners and started last season with crowds of 7500+ and as one of the favourites.

Were bang average last season and started this year with a crowd of 5500. Season ticket holders are massively down too.

It really is a double edged sword

 

[djcotez]

I always thought the new training ground site is a great opportunity for 24/7 revenue... if the right facilities were built. Hall hire for parties/weddings/wakes (crem just down the road), weekday pub lunch for industrial estate, evening/weekend pub meals for new housing estates (if/when built). Gym. 2nd club shop/ticket office?

this is a brilliant idea for all the reasons stated - although imagine Rat Properties Inc. would want a slice of that if built on their land

 

[Cricko]

this is a brilliant idea for all the reasons stated - although imagine Rat Properties Inc. would want a slice of that if built on their land

The Rat no longer owns anything to do with the new training ground.

 

[* ORM *]

The problem is two-fold.

1j The financial model for lower league football doesn’t work

2) Fans want instant success and don’t care about point 1

Robust rules enforced by a regulatory body with teeth is the only way out. Football clubs need to operate within solvency margins. Spending to gamble on success does not meet that requirement. Rich owners can still work but only by injecting capital up front and reinjecting if needed before outlay.

 

[Rattus Norvegicus]

Quite a few posts about needing to spend on a team. I can see that works in a number of cases.

I can also see that there are clubs where for one maybe two seasons the management team are right, they get the right mix of players in, other clubs in the league don't have a good year etcetera ......... and before you know it, the team are at the top end of the table & are getting promoted.

Whilst chasing the income streams and reducing overheads & other costs are very necessary (and something I have an interest in) perhaps getting the right management team is an overlooked factor?

 

[Booma]

Hence the structure that Stan was pushing for when he was involved.

The idea being that the Club has an identity, a style of play, and a way to operate and we stay within those boundaries.

So the football we play, for example, is a decision that the club made, not necessarily the manager. So, when the time comes that Kev moves on, ideally he has been poached by higher up because he is doing superbly and not sacked as it’s all gone horribly wrong. When we look at a successor, we stick to a manager that plays the same type of football (amongst other things). So, we may overlook a manager with promotions like a Steve Evans and opt for a manager who plays how we like and his best finish is a failed play-off campaign for example.

That way, the players we have fit the philosophy of the club. So they are comfortable in possession, fit to operate a press, goalkeeper that can play and so forth. So, new manager doesn’t have to axe 7/8 players and bring in 7/8. They work with the coaching staff in place. So we don’t have a MM who brings in 7 members of staff, we replace 1/2.

Its all very simple, very basis stuff that Stan was campaigning at the start, none of what he said was reinventing the wheel, but was what a sensible football club does, how a proper club operates.

Then, cup runs, sell ons and turning RH into a 365 day operation instead of a 23 day one.

When I watched the Macclesfield documentary on the BBC, one thing they did was have a gym that was open to the public. I’d love for us to have something similar, so we can work out at Roots Hall. I don’t live in Southend, but I work there, so I’d be tempted to get a membership to workout before/after work.

Have a pub/bar that is open in the week for the public. One that does food too. Quick pint and a burger at Roots Hall after work would be excellent.

That’s the problem that COSU have with how they set their budgets. They spent over £4 million before having the keys, Roots Hall was run down and needs sorting for them to bring in additional revenue, creditors are still being paid and so forth. So much money has, and will be spent before they even get the chance to fork out on the playing side.

It’s a balancing act for them at the moment.

Oldham have done exactly that with the new stand at boundary park (Joe Royle Stand) it has a decent gym with views over the pitch on non match days (although I did watch Paul Scholes playing in a charity game, whilst I was on a tredmill). It also has function rooms for Christmas parties etc which are meant to be pretty good (according to mrs Booma).

It’s turned that stand into a year round revenue stream, (which they’ve clearly opted not to invest in the away end).

 

[onceknownasrab]

Managing expectation is key. We are a NL side and our football earned the right to be where we are. You can cite as many off-field reasons as you like but the tables are all that counts in football and we earned the relegations.
We have good attendances for our level but they need to equated against the cost to maintain RH, repair RH or potentially rebuild RH. The figures involved will be eye watering.
Perhaps we should get COSU to dig deeper and pay for a bigger, better squad? If it comes out of their pockets it was not achieved or sustained by the club.
I have always argued, that to climb the pyramid and be sustainable, we needed a move to a new stadium that was designed to have many non-matchday revenues. RH is a sentiment and that cuts no ice in business.
So we either accept 'gifted' monies to improve the squad or realise that in this division or possibly LG 2, we would be fulfilling the fixtures with little or no probability of going higher. I remember the days of us being a yo-yo club between div 3 and 4. Aspirations were few and far between.
If I said to you, before each season, we will play all the games but, will never go up, how long would we get the crowds we do? If you are not looking to be competitive you may as well not be in a league.
Our catchment area is vast and growing annually. We need a new stadium to tap into that and put the dream back into our thinking. Without it, I will still support my Blues, but I expect us to be in the lower regions of the pyramid for ever and a day.

 

[Holy Joe]

Well yes, that would be how you come sustainable - but is it possible? I'll try and check a couple l2 clubs accounts when I get a chance. But if our playing wage budget is only £1m, that's sub £50k average annual salary per player - I doubt that gets much in l2, and hence wouldnt surprise me if wages rose just as much, maybe not instantly but as you replace players.

I've taken a quick look at Walsall (as they were mentioned as sustainable), Gillingham (mid table lge2 and TL old club) and Tranmere (mid table lge2).

Walsall i'd agree look sustainable - generally turns very small profit. Staff costs are around 50% higher than ours, with similar number of playing and coaching staff. But revenue is over double ours.

Gills and Rovers seem to be making relatively hefty losses. Rovers turnover is relatively low and staff costs, although the lowest of the 3, aren't low enough!

I suspect staff costs are at least 50% higher in LGE 2.

 

[Napster]

Managing expectation is key. We are a NL side and our football earned the right to be where we are. You can cite as many off-field reasons as you like but the tables are all that counts in football and we earned the relegations.
We have good attendances for our level but they need to equated against the cost to maintain RH, repair RH or potentially rebuild RH. The figures involved will be eye watering.
Perhaps we should get COSU to dig deeper and pay for a bigger, better squad? If it comes out of their pockets it was not achieved or sustained by the club.
I have always argued, that to climb the pyramid and be sustainable, we needed a move to a new stadium that was designed to have many non-matchday revenues. RH is a sentiment and that cuts no ice in business.
So we either accept 'gifted' monies to improve the squad or realise that in this division or possibly LG 2, we would be fulfilling the fixtures with little or no probability of going higher. I remember the days of us being a yo-yo club between div 3 and 4. Aspirations were few and far between.
If I said to you, before each season, we will play all the games but, will never go up, how long would we get the crowds we do? If you are not looking to be competitive you may as well not be in a league.
Our catchment area is vast and growing annually. We need a new stadium to tap into that and put the dream back into our thinking. Without it, I will still support my Blues, but I expect us to be in the lower regions of the pyramid for ever and a day.

I think there's some land near Waitrose.

 

[Rattus Norvegicus]

I can't remember where it was but .......

........ someone once called football income as prune juice - the more you have, the more it just goes straight through.

That is clubs in higher leagues may get more money in but they just use that to pay higher wages to stay competitive in the league they are in.

Arguably rich owners funding clubs distort the level of wages in any given league and cause problems for any other clubs looking to balance their books.

 

[Che's Left Foot]

<snip>

Walsall i'd agree look sustainable - generally turns very small profit. Staff costs are around 50% higher than ours, with similar number of playing and coaching staff. But revenue is over double ours.

<snip>

No doubt their fanzone plays a part. Here's hoping COSU take note