Football clubs operate with wildly fluctuating income streams. In May, June and July, whilst there are no games being played, the season tickets are sold and this stocks up the coffers for the forthcoming season. Once the games start to be played, then there is still some income, although much less than in the season tickets sale time.
Most football clubs operate with some form of credit facility, or take advantage make use of companies such as Ticketus, who buy tickets in advance, smoothing out the ups and downs of annual income.
What is vital therefore is to ensure that season tickets are sold! Football clubs do their best to talk up the coming season, no matter how bad the previous one might have been.
Teams promise new signings … maybe Wayne Rooney will be signed by Falkirk … how about Messi for Cowdenbeath … could David Beckham be tempted to Cliftonhill?
Conveniently the transfer window closes after most of the season ticket sales will have taken place.
One can usually identify season ticket time even without knowing the time of year – the signing stories spread thick over the papers, like a May snowfall in Hamilton.
And so yesterday we saw the proud announcement from Rangers of its season ticket sales strategy. (And all credit to that master of the “inky trades”, David Leggat, who predicted this a couple of weeks ago.)
RANGERS Football Club has announced a price freeze to reward season ticket holders for their unrivaled and unwavering commitment to the Club.
Last season the Club took the unprecedented decision to slash adult season tickets by one third and juveniles by 50%.
This strategy has been reinforced by the record attendances at Ibrox this season making Rangers the fifth most attended club in the UK. The Board has decided to continue this affordability strategy in recognition of the fans and their unquestionable loyalty and support.
Prices for season tickets, which include all 18 league games, start from £258 for Adults, £65 for Kids and £179 for Concessions.
Rangers Interim Chief Executive Craig Mather commented: “The Board is delighted to confirm season ticket prices for next season will be frozen. More than 38,000 fans bought season tickets in 2012/13 and in recognition of their tremendous support and loyalty we have taken the decision to keep prices for the forthcoming campaign as low as possible.
“We cannot thank Rangers fans enough. They have followed the team in huge numbers at all games this season and I am sure they will back Ally McCoist and his players again in 2013/14.”
I have been accused of paying too much attention to what official statements on the Rangers site say, especially where they emanate from Mr McCoist, and there is a certain “Barnum and Bailey” quality to what they have to say, but it is still worth a comment, I think.
The announcement ticks many of the expected boxes – there is a “price freeze” to reward the loyal fans; the fans are praised for their backing this season; there is a call on them to back their manager and team in the coming year.
However the statement is, to say the least, a little disingenuous, especially this sentence.
“Last season the Club took the unprecedented decision to slash adult season tickets by one third and juveniles by 50%.”
Maybe the decision to do so was based on the team plying its trade in 2012-2013 in SFL3, whereas “Rangers” played 2011-2012 in the SPL? It might have been an unprecedented cut in price, but for an equally unprecedented drop in quality of competition and product?
At the super and “unprecedented” low price this season, the cheapest season ticket for Ibrox was still more costly than the cheapest season ticket at every single SFL team, with the exception of Partick Thistle, whose cheapest was £260.
Rangers season tickets were more expensive (at the cheapest) than two SPL teams – Inverness and Aberdeen!
Now, for a team with, as we have been assured, double figures of millions in the bank, and being the “most financially stable football club in the UK” (© Imran Ahmad), the necessity for large season ticket sales is clearly much less than if it was a company running out of cash with a “burn rate” of £1 million over month or more. All that would be needed to ensure a smooth path would be a credit facility … but Rangers do not have one.
I am sure that it is entirely coincidental that the papers are full of stories about Rangers being set to sign Cammy Bell, Nicky Clark, John Daly and Nicky Law, and a further four players too.
The key to season ticket sales last year, which started very late due to the uncertainty of Rangers very existence, was Mr McCoist’s support of Mr Green.
I suspect that Craig Mather, the new CEO, will be using all his skills on Mr McCoist to get his endorsement of season ticket sales for this season too. (And as a holder of £1 million pounds worth of shares, Mr McCoist has an interest in keeping the sales going well and the ticket price up!)
How acute is the need for a matching sale of season tickets this summer?
In the half yearly results issued by Rangers in March, covering the period to 31st December 2012, which can be read here, the Directors stated that the Group had:-
Cash of £21.2m as at 31 December 2012.
The first 7 months’ trading resulted in a loss before non-recurring items and finance costs of £7.0m. The second half of this season is likely to have seen increased losses, although in accordance with the business plan, as the season ticket income for 2012-2013 is presumably recognised in the first 7 months results. Even if not, and it is spread over the year, the company is still looking at a £1 million per month deficit.
If the £22.2 million which the share issue generated was all in cash, then it arrived just in time, as the bank balance just over two weeks later was less than the sums raised.
If however much of the sums raised were in the form of loan notes etc from corporate or institutional investors, then this makes the position rosier for the Ibrox team. That would suggest that they had the cash AND other funds which were not cash.
All that being said, it is clearly vital for Rangers (as for any business which has such a seasonally affected income stream) to generate the maximum possible at “harvest time”. Let’s see quite how many times Rangers and Mr McCoist manage to get their transfer targets and “we are looking to add ten players” in the papers till the season ticket rush is over.
It will also be very interesting to see how Mr Mather and the Board deal with the alleged board room fights. How will they approach selling tickets at such a time of uncertainty about the control of the football club?
On the basis of the first statement released, the approach seems to be to ignore it, and hope the fans do too! These are very wise businessmen and I am sure they know exactly what they are doing.
Posted by Paul McConville