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17 March 2015

Jez Says - 17th March

Football has changed so much over the last twenty years and the industry continues to evolve.  Cambridge United almost achieved the impossible at the start of the 1990's of becoming one of the inaugural members of a newly formed Premier League, after successive promotions from the fourth to second tier of English football.  Few would have realised then just how this competition, and in particular Sky Television, would change the face of English football.


Our scholars look perplexed if I ever reminisce about football when there was only one substitute, games finishing at 4.40pm, teams just ran out to start a game and Liverpool won everything!  It is also crazy to think that the biggest European Cup fixtures were covered only by second half commentary on the radio and there were less live games in a season than there is now on any given Sunday.  And that's what has changed football the most; money.  More specifically, TV money.  The new Sky deal for the Premier League, in excess of £5billion, is mind blowing.


Therefore, for any club to survive, prosper and have any ambition of progression, a really smart business plan, and facilities, are required.  Or a multi million pound backer.  For a sustainable, debt free and secure football club, it's the former.  The financial landscape has changed from when Cambridge United twice reached the second tier.  Now, with the 80/12/8 split for income within the Football League and parachute payments for club's relegated from the Premier League, there is a massive gap between the Championship and League One.  And look at the big club's in League One!  


You can attest to the fact that our facilities are not fit for purpose even to host football matches.  Maybe twenty years ago, but not any more.  To encourage more families, to provide our supporters with a proper match day experience, to grow our fan base and maximise match day revenue, we are miles away from what we need.  It is no surprise that all three clubs in the League Two automatic promotion places have facilities that allow them to generate revenue away from match days.  That is a must for us in the future.


Whilst bemoaning our lack of facilities, and working hard with Grosvenor to solve that issue, we also have to make the most if what we have now, identify our UPS's and maximise the benefit of the "Manchester United" effect.  To really progress, we must continue to grow the business that underpins our football operation.  That means creating businesses within the business, so that we are not completely reliant on gate receipts in making decisions about the level of investment each season into the playing squad.  Otherwise, that decision is such a difficult conundrum, balancing ambition with risk.  Obviously it is helped considerably by Football League status.  And this will become even more important as the central funding is now linked to the Premier League TV deal.  However, that does not give any club a competitive advantage against their rivals in League Two.  Fortunately, our club does have a couple of UPS's that can give us a real chance of punching above our weight.


Firstly, our youth development and community scheme.  This was borne in some ways through necessity, nine years ago, as a way to fund our academy while we were outside the Football League.  Now, having passed our EPPP audit, we receive a grant of £270,000/year provided that we contribute £135,000/year to our academy.  This two third for one third funding is the criteria for all category 3 clubs.  Our youth development and community scheme provides the club with a surplus way in excess of that figure though, such is the scale of our operation.  Therefore, we have created a competitive advantage of around £250,000/year against all our rivals.  Our motto is "never satisfied".  Therefore, we are building on this huge strength by expanding our work to another level through our Football Development Manager, James Cutting, and our Community Manager, Amy Ganderton.  This means initiatives such as National Citizen Service and Futsal as well as hugely expanding our girls development programme and the number of venues where we deliver Soccer Schools and Soccer Tots.  By the end of this year, Cambridge United will be providing a holiday provision of football in 15 venues throughout Cambridge and the surrounding area.  If you live in St Ives, Huntingdon, St Neots, Saffron Walden, Newmarket, Ely or Soham, boys and girls of all ages and abilities will have the opportunity to enjoy CUFC in every school holiday.  We are also running courses in and around Cambridge at Chesterton, Netherhall, Comberton, Bottisham, Linton, Melbourn, Swavesey and Cottenham. 


Danny Kerrigan, our Trust manager, will explain in his articles how this work compliments that of our charitable engagement with different cross sections of the community.  In simple terms though, our Community Trust provides activities that are free at the point of delivery to all participants.  These are supported financially by grants, companies via their Corporate Social Responsibility funds and money we raised last season through Mission676.


Our other major USP is the "Cambridge" factor.  And it is a USP that we've failed to exploit.  We live in a world renowned city, with thousands of tourists every year visiting an iconic institution.  The quality and wealth of businesses within the city is also immense and we are now just starting to engage at the right level with many of these institutions.  The Manchester United game at home created a huge interest amongst the business community of Cambridge and created a database that would otherwise have taken months if not years to compile.  We are now following up interest in the club from that night, by meeting and presenting to a number of companies about a potential future partnership with Cambridge United.  And the word "partnership" is the key.  It's not about trying to get a few quid as a one off, to sell a board or a programme advert.  It is to explore how we can truly partner and how they can become involved in one of our activities.  All successful deals will add value for both parties, so identifying those potential opportunities and convincing future business partners that we are credible players is our main task before the end of the season.  We could not have a better person to lead this process than Liz Slack, our Business Development Manager.


People drive businesses.  We are lucky that we have hard working, talented and committed people at every level.  It starts with the chairman and permeates throughout every level of the club.  It's how we kept our academy alive for eight years with no funding, it's how we passed our EPPP audit in so little time, it's how our first team won promotion.  It's also how we made the most out of "ball number 30".  It might have been luck that we drew Manchester United but it wasn't luck in how we organised ticket initiatives to create more season ticket holders and increased attendance's before and after the game, or how we maximised revenue from sponsorship and hospitality, or in gaining a replay.  It was about making the most of an opportunity.  It is a philosophy that we will continue to adopt as we strive to make the business foundation of the club strong enough to facilitate progression on the pitch.


You should know that a lot of work has already been achieved.  This season our turnover will be approx. £3.8million, without any FA Cup income.  We are also on course to post a small surplus, again without any FA Cup income.  That means a structural break even operational business.  We budget to go out of every cup competition in the first round and will continue to do so.  We will set our playing budget at the level our business allows, in line with the SCMP, so that everything we do on the pitch is sustainable.  We won't use the bonus revenue from this year.  That must be used for one off capital expenditure projects and future stadium improvement.  It has also corrected our cash-flow deficit.  That is why we must continue to grow the business so that we can continue to grow our investment in the playing squad.  As well as producing our own players and smart recruitment, this is imperative in order to bring future success.


And we all know that regardless of balance sheets, P&L's or any business model, every club is classified and judged by one thing only: what happens on the pitch.  We have made unbelievable strides on and off the pitch but let's be clear.  Everything we do off the pitch is to support what happens on the pitch.  And everything is about the players.  The people who really drive a club are the players.  So it's about giving them our full support in the last quarter of the season. 


Your support has been superb.  The players really appreciate it, especially when things have been difficult and everyone has been frustrated.  But that's sport.  And life.  You can't always have everything your own way and when you work together to get through difficult times, you grow stronger.


Let's get behind the team and hear the sound of coconuts ringing around the RCAS again!


Enjoy the game.



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