Following on from the Prime Minister’s announcement earlier this month that fans will only be let back into stadiums by October at the earliest, Aberdeen Football Club has announced that wage cuts of £1m have been made to mitigate ‘the widening funding gap’.
The SPFL side has been in talks with staff earning more than £30,000 a year to reduce their wages by an average of 20%. Aberdeen has explained that the reasoning for the cuts is because of ‘a collapse in income due to the coronavirus‐imposed suspension of football, the subsequent early end to the 2019/20 season, and the assumption that we will be playing in front of limited crowds for most, if not all of the 20/21 season’.
Aberdeen Football Club Chairman, Dave Cormack, stated: “I’m humbled by the response of our hard‐working and dedicated executives, management, players and staff who have accepted these cuts and the reasons for them. They’ve demonstrated a willingness to do what needs to be done to help secure the club’s future. As a result of our higher earners sharing in the financial pain inflicted by the coronavirus crisis, we’re able to safeguard jobs and protect the incomes of those on a lower wage.”
The club has initially prepared for a £5m funding gap due to a lack of revenues, however, based on new information such as fans likely not to return to grounds in September, the estimated financial impact has increased to around £10m.
In an attempt to mitigate the potential loss, Aberdeen have also introduced a range of other measures such as getting a cash injection of £2m from investors and saving £2m via the government’s job retention scheme, rates relief, along with operational cost‐cutting.
Additionally, due to higher than expected season ticket and membership sales, as well as less than expected 2019/20 season ticket and seasonal hospitality refunds the funding gap has been reduced by £1.2. With all of these calculations in place, the side is hoping to reduce the funding gap from £10m to £3.8m.
Cormack added: “It was clear that our situation was becoming unsustainable.”
“These cuts help to further reduce our running costs to a more sustainable level against what income we can continue to generate through season ticket sales, AberDNA Memberships and broadcast revenues. We have made significant strides getting the gap down to under £4m.
“We’re not out of the woods, by any means, but everyone at the club is buoyed by our supporters and corporate clients’ desire for us to work together to get through this. And I believe we will. Along with our goal of avoiding redundancies and looking after our lower paid staff, we must stay competitive as a team and continue our investment in our youth academy.”
