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Tom Burwell - Interim CEO Podcast

Really interesting to hear them talk about hospitality. Seems to me the club have gone half arsed at it. As someone who would be willing to pay premium prices for a decent experience the club have gone about it the wrong way. Offering if founders at circa £1400 is overpriced for a bang average experience. Then move into other options Quinn’s is probably decent value but oversold and wouldn’t give a premium experience if you need to be there three hours before kick off to get a seat. Then we have 76 yards which you are paying a massive price for a non premium area of the ground. You can’t just call an area premium and expect people to pay top prices without delivering the experience to go with it
 

BaconButty said:
He said this years revenue will be over £200 million that’s impressive for our first season back in the premier league

Shows how well things are being run behind the scenes as with SCR coming along could be crucial
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Could this be artificially high because of the women's team sale?
 
Mowgli said:
That's not really relevant to front of shirt sponsor and things like that which are reported to be low. Barnes and phil smith both been saying as great as the hummel kit deal has been shirt wise, its very small in figures and we are tied into it.
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I think the effects of the Hummel deal are a bit more intangible than just the numbers though, the feel good factor it created can’t be pointed to on a balance sheet.
ID101 said:
Really interesting to hear them talk about hospitality. Seems to me the club have gone half arsed at it. As someone who would be willing to pay premium prices for a decent experience the club have gone about it the wrong way. Offering if founders at circa £1400 is overpriced for a bang average experience. Then move into other options Quinn’s is probably decent value but oversold and wouldn’t give a premium experience if you need to be there three hours before kick off to get a seat. Then we have 76 yards which you are paying a massive price for a non premium area of the ground. You can’t just call an area premium and expect people to pay top prices without delivering the experience to go with it
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Aye, I’d like to do something like Quinn’s but as you say it’s absolutely rammed. A Quinn’s at the back of the South Stand I’d be all over it.
 
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Mowgli said:
Could this be artificially high because of the women's team sale?
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Thats a very good point although I really don’t think we’ll have sold it for very much

Just checked the women’s team had a revenue of £5.38million which is a lot more than I expected
 
BaconButty said:
Thats a very good point although I really don’t think we’ll have sold it for very much

Just checked the women’s team had a revenue of £5.38million which is a lot more than I expected
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And he said we sold it for a multiple of income we are proud of. So £20/30m ish? Maybe
 
Switch on fella and shows there are so many facets to running the club than you realise that need to be right for us to grow.
 
HarrogateMackem said:
Yeah the thing these people I were speaking to specifically mentioned was the front of shirt deal for next season and the Hummel deal.

I have literally never seen so many fans wearing a current shirt as us and the blue Hummel one. But it’s to do with the type of deal we have apparently that means we make basically nowt form the sales (?)
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We will get an annual fee from Hummel. Will be about £400k a year. We will have received a promotion bonus. I reckon it will have been about £800k / £1m and then we’ll probably get an additional £100k a year being in premier league so this summer we’ll probably get about £500k.

This is about 10% of what a top 6 team will get.

Shirt sales will be peanuts due to the deal we have. Fanatics own the result therefore they take the margin. We will get a royalty payment. Probably around 5%.

I’d estimate the following structure roughly.

Costs Hummel £15 landed into UK.
Sells to Fanatics for £30.
Fanatics sells it’s for £60.
Royalties due to club about £3 per shirt.

We’ll sell about 100k shirts this season.
So £300k royalties plus £400k annual fee. Total £700k.

Now… imagine we made the kit ourselves!!

Using the same figures as above we would make £4.5m vs £700k.

Yes it would cost us about £0.5m to set up a team to do it etc. but that would be offset with the additional revenue you make by doing other merch like training wear, generic stuff like cotton tees, polos, baby grows etc etc.

You’d made another couple of million in profit doing that sort of stuff.

There is a very strong argument to make in the club doing it themselves in my opinion.

An argument to the tune of about £6m / £7m additional profit.
BaconButty said:
Would imagine that deal had promotion factored in with it being over the 5 years but it’s not uncommon for clubs to cancel kit contacts for a better offer
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Clubs can buy themselves out of the contract. Hummel won’t let this go mind easily. It’s a great deal for them. They might be persuaded next year once the novelty has worn off. You always see a decline in sales in years 4 and 5 of a 5 year deal.
 
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im not roland rat said:
We will get an annual fee from Hummel. Will be about £400k a year. We will have received a promotion bonus. I reckon it will have been about £800k / £1m and then we’ll probably get an additional £100k a year being in premier league so this summer we’ll probably get about £500k.

This is about 10% of what a top 6 team will get.

Shirt sales will be peanuts due to the deal we have. Fanatics own the result therefore they take the margin. We will get a royalty payment. Probably around 5%.

I’d estimate the following structure roughly.

Costs Hummel £15 landed into UK.
Sells to Fanatics for £30.
Fanatics sells it’s for £60.
Royalties due to club about £3 per shirt.

We’ll sell about 100k shirts this season.
So £300k royalties plus £400k annual fee. Total £700k.

Now… imagine we made the kit ourselves!!

Using the same figures as above we would make £4.5m vs £700k.

Yes it would cost us about £0.5m to set up a team to do it etc. but that would be offset with the additional revenue you make by doing other merch like training wear, generic stuff like cotton tees, polos, baby grows etc etc.

You’d made another couple of million in profit doing that sort of stuff.

There is a very strong argument to make in the club doing it themselves in my opinion.

An argument to the tune of about £6m / £7m additional profit.


Clubs can buy themselves out of the contract. Hummel won’t let this go mind easily. It’s a great deal for them. They might be persuaded next year once the novelty has worn off. You always see a decline in sales in years 4 and 5 of a 5 year deal.
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It can’t be too difficult and expensive to run one shop with a website you’d have thought
 
DonaldDownTheWing said:
Listened to the whole thing now. He speaks really well, I’ve no doubt he’ll help to grown our revenue and make us more competitive on the pitch.

However the whole thing is tinged a bit for me, given what’s going on with season tickets. I worry he’s being disingenuous.
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I agree in a sense but like @Cack Stottie said, alot of decisions and changes needed to maximise revenue aren't going to go down well with fans ever really. Whether its ticket increases, more corporate offerings or catering to foreign fans, its not what match going average fan wants. But that is how we grow.
 
DonaldDownTheWing said:
I think the effects of the Hummel deal are a bit more intangible than just the numbers though, the feel good factor it created can’t be pointed to on a balance sheet.
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Hummel had an open goal. Brought back a few classics in time time ‘retro’ was fashionable.
Plus we’ve had two of our best seasons in living memory from a fans perspective. I’ll be interested to see how well they perform over the next two seasons. We’ll see a huge dip in sales I think.

On the flip side …. How long would the feel good factor last if you knew the club was getting all of the profit. Every single penny?

I think it would see a significant and permanent upturn in sales if fans knew all the money was going back into the club.
 
Mowgli said:
I agree in a sense but like @Cack Stottie said, alot of decisions and changes needed to maximise revenue aren't going to go down well with fans ever really. Whether its ticket increases, more corporate offerings or catering to foreign fans, its not what match going average fan wants. But that is how we grow.
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No you dont need to make any of the recent decisions to grow. Infact they are the opposite. Stop bootlicking
 
I'll listen to it later.

From reading the comments, I do worry about the impact all of this has on us, the supporters. I get that we want to be as successful as possible but, for me anyway, going to the match is as much about a sense of belonging, being there through thick and thin, bringing the next generation of supporters through etc. I'd like to get my son a season ticket but couldn't this year. He's still young enough that it'd be more for me than him at this age but if things keep going this way in a few years then I can see me giving mine up and just going to non league games with him. The club might say who cares? But it does feel like the club and fans are drifting a bit
 
BaconButty said:
It can’t be too difficult and expensive to run one shop with a website you’d have thought
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It’s not difficult but it can be expensive if it’s only used for retail. We need to make the club shop somewhere that makes revenue every day. Monday to Friday when no midweek games it will do two fifth of fcuk all. But what it can become with some clever thinking is a bit of an event centre. Somewhere business can hire out for the day to hold conferences etc. Most decent sized businesses like to hold meetings offsite and want to do it somewhere different. The club shop could be a cracking venue.
 
Mowgli said:
I agree in a sense but like @Cack Stottie said, alot of decisions and changes needed to maximise revenue aren't going to go down well with fans ever really. Whether its ticket increases, more corporate offerings or catering to foreign fans, its not what match going average fan wants. But that is how we grow.
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I don’t think stopping long serving season ticket holders moving price brackets is the going to make a drop in the ocean of difference when talking about £300m revenue.
 
It's a decent listen - all the corporate buzz words mind.

With the new PSR rules homing in on revenue, we need to maximise as much as possible.

On expansion, some have got carried away saying it would be hospitality focused. He actually says they'd look at a 7k GA /3k hospitality. I don't think that is a bad thing.

Other thing that was interesting was he says the best directors come from out of football, so would not surprise me to see us appoint a CEO from another sport.
 
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