Below are questions asked specifically related to Finance. If you have any enquiries not covered please make contact using the dedicated page – HERE
There is no guarantee of success. The figures supplied were the most likely estimate based on actual out-turn to date where possible and on other information available. The assumptions were disclosed in the plan, further detail is being disclosed in this document, and it is perfectly reasonable to challenge them and carry out your own calculations based on your own assumptions. Different scenarios were run considering initial promotions then stagnation, failure to progress from the outset and regular promotion. The conclusion was that if all other parts of the club perform as expected the ‘minimum occupancy rate’ is an average gate of 1400 adults at £8 per single adult ticket and £143 per adult season ticket a head. Admittedly other revenue such as sponsorship would suffer in the event of a more permanent stagnation/decline to Step 5 levels, and it does not allow for any reserves to be built up so is not a particularly healthy situation if that persisted from outset but it does give us a break-even point which is also the pricing structure used by Bury AFC next season.
We plan to have two Community Asset Managers, a Community Liaison Officer, a Groundsperson and an Apprentice. The Staff Wages line includes National insurance and Pension Payments
Volunteers have played a massive part in the huge progress made by both organisations to date and they will continue to be an invaluable part of all future success, but in order to optimise income streams, the facility needs to be actively and continuously managed and promoted. This means that full time staff are required.
Running a stadium is a very different prospect to a groundshare. We believe that the posts identified are the minimum staffing requirements for an efficient operation and we will still need volunteer support. The Community Liaison Officer will ensure that we meet our commitments to deliver a community benefit to the wider Bury community, cementing our club at the heart of our town. This person is not primarily focused on the football team, their responsibility is maximising the usage and management of the community asset, especially beyond the football team. Effectively their salary is offset by the revenue they generate. This role could be performed by skilled volunteers; however it will be full time and the prudent assumption is to assume a paid employee.
The Asset managers and grounds person are again intensive roles and whilst volunteers will be crucial, to manage a large community asset with many functions beyond football, 7 days a week does require some paid employees, likely people with Bury FC close to their heart.
– Can there please be detail provided from both parties perspective as to the opportunities and threats that are in play dependent on the direction of the vote?
This is a very open question and the statements and business plans have covered much of this. Those advocating a no vote should present an alternative business plan which shows how the funding gaps will be closed. In the event of a yes vote the key risks are:
• A lack of attendance and volunteer support due to an inability of supporters to unite and work together
• A disruptive environmental event such as Covid, or similar
• Inflation/major economic downturn putting pressure on supporter spend and sponsorship revenue and increasing costs
The first is the one in our collective control, requiring calm heads and a focus on the big picture.
The second two require agile management of budgets, and the maintenance of a capital reserve which Bury AFC bring to the project.
These risks are real, but none are reasons to walk away without trying.
– The P&L. It concerns me projections are based on successive promotions across the five-year period. This is clearly unrealistic. Can we please be provided with a worst-case model- I.e based on relegation to NWCFL Div 1 and stagnation?
The P&L demonstrates the differing cost structures at each level. As the Business Plan states, promotion each year is ‘unlikely’ to happen. The match day revenues and playing costs are the main variables. So, if for example it was assumed that we remain at Step 3 for 3 seasons, please use the match day revenues and player costs for Year 3 for the following 2 years to assess the impact. The data can be used to model your own assumptions. We have tried to keep this information reasonably simple as clearly numerous scenarios are entirely possible.
It is also important to stress that the Board will be charged with running the Club, and reacting appropriately to changing circumstances as they occur.
– Benefactor make up. Given there is a proviso that the benefactors can private sell their shares- can the make-up of said benefactors please be provided including financial contribution to date?
Total contributions to date have been £730k. It is personal data to share what individual have contributed, however Peter Alexander is the largest benefactor and the only “person with significant control”, and there are seven other individuals to date. These include Matt Barker, David Manchester, Ian Harrop, Derek Calrow OBE, Ian Pickup. Two individuals do not wish to have their name put into the public domain and attract undue attention. They have had their names passed on to the relevant people at both societies boards to ensure they are not individuals who would bring any reputational risks. The Government has also vetted the benefactors to confirm there is no one of undue concern.
We will work to produce a policy around future share purchases as we want to encourage further contributions and we also need to agree a pragmatic way for people to do so where the amounts are comparatively small but very much welcomed.
– What will be protected from an AFC perspective? I appreciate that the direction of travel will be dependent on whoever the new board may be if a merger is voted through- however- we have to date built a club that is successful based on its ethos, management team, playing staff and volunteer reliance. Is there a possibility for a framework to be agreed pre vote as to the strategy (potentially for year 1 post merge). For example- guaranteed protection of management teams across the footballing sides dependent on success in 2022/2023?
Andy Welsh’s contract has been extended into the 23/24 season and he is the key decision maker on all men’s player recruitment. There are no other staff contracted on a longer-term basis but the future of the club will be governed by the elected board of the new Community Benefit Society under the direction of the membership. There may be concerns at this moment in time but the longer-term threat in a fan owned club comes from an inability to recruit high quality volunteers into the club over the years, so contested elections are to be encouraged.
– To follow up- can you please also advise which of the three crowd number scenarios in appendix 2 match the revenue projections in the P&L. This seems to have been missed off unless I’ve missed it?
They are shown as the base projections, copied below.
Year 1 1,600
Year 2 1,750
Year 3 2,200
Year 4 2,400
Year 5 2,500
Gigg Lane is and will continue to be owned by The Bury Football Club Company Limited (13907755) as this was the organisation to which the grant funding was provided and the use of a company limited by guarantee with an asset lock to protect it in future. There are absolutely no future plans to raise debt using Gigg Lane as collateral and the articles of The Bury Football Club Company Limited prevent it from taking on any debt.
To be prudent, this has not been included and is therefore a potential upside.
Ultimately the amount spent on wages will be the decision of the Board based on affordability at the time. It is possible that these numbers are low in the upper reaches of non-league football but the background to the calculation is outlined in the Business Plan and copied below. (Note that certain revenues such as season tickets are charged at 20% VAT, and the formula is based on gross income, rather than net income shown in the published P+L)
As stated in the proposal document:
‘The current business plan automatically allocates 25% of the revenue generated to the football club playing budget (which includes manager and coaching staff). This creates a budget which should allow the team to compete at each level, although from Step 3 upwards additional budget would probably need to be allocated to the playing budget to gain promotion. This is most evident in Step 1 where significant sums can be spent on playing budgets to get into the EFL’
The success of the project as a whole is much more likely in the event of a merger. Should the proposal to merge be rejected, then the planned level of investment simply will not materialise.
The figures supplied were the most likely estimate based on actual out-turn to date where possible and on other information available. The assumptions were disclosed in the plan, further detail is being disclosed in this document, and it is perfectly reasonable to challenge them and carry out your own calculations based on your own assumptions. They are not based on the best-case scenario.
We plan to have two Community Asset Managers, a Community Liaison Officer, a Groundsperson and an Apprentice. The Staff Wages line includes National insurance and Pension Payments.
Volunteers have played a massive part in the huge progress made by both organisations to date and they will continue to be an invaluable part of all future success, but in order to optimise income streams and maintain the facility infrastructure, the facility needs to be actively and continuously managed and promoted. We also have a commitment to deliver a benefit to the wider Bury community. The Community Liaison Officer is critical to ensuring Gigg Lane and Bury Football Club is delivering that benefit.
This means that full time staff are required.
These figures are based on gross admission prices, the number of matches and projected attendances. The admission prices are then calculated net of VAT for the purposes of disclosure in a P+L account . As clearly stated in the Business Plan the wages are based on a % of revenues, see Question 5.
Ultimately, the Plan demonstrates what is needed to permit the Club to progress. Stagnant or steadily declining support will impact on the Club’s ability to gain promotion, particularly from Step 3 onwards. Bury AFC attracted an around 1,400 on weekend fixtures in our first full season at Step 6, when there was a split in the fan base, away from our usual location. Bury FC’s average attendance for the past 20 years of our existence in League 1 and 2 was around 3,200. In general terms, a prospective average attendance at Step 1 of around 2,500 feels feasible and sensible, especially if community engagement is strong, pricing is competitive, and people support the venture.
We have conducted a sensitivity analysis around attendances and notwithstanding the obvious difficulty in making predictions where there are many variables, we are comfortable with the average attendances being used.
The example of FC United is not that useful a comparison as they were a club formed in very specific circumstances. There is research available which shows that clubs who collapse but rebuild using their old stadium retain the vast majority of their standard fan base. The evidence in Step 1, and to some extent Step 2, is that attendances for some games can be higher than many EFL clubs as those leagues are populated by a large number of professional, well supported, former EFL clubs.
It is also important to stress that the Board will be charged with running the Club, and reacting appropriately to changing circumstances as they occur.
As stated in the proposal document:
‘The current business plan automatically allocates 25% of the revenue generated to the football club playing budget (which includes manager and coaching staff). This creates a budget which should allow the team to compete at each level, although from Step 3 upwards additional budget would probably need to be allocated to the playing budget to gain promotion. This is most evident in Step 1 where significant sums can be spent on playing budgets to get into the EFL.’
Ultimately the amount spent on Wages will be the decision of the Board based on affordability at the time. It is possible that these numbers are low but the background to the calculation is outlined in the Business Plan. (Note that certain revenues such as season tickets are charged at 20% VAT, and the formula is based on gross income, rather than net income shown in the published P+L). As you can see from the P&L and cash movement there is a surplus which can be allocated by the board each season to increase it beyond 25% default amount. Clearly the National League is an extremely competitive league with a number of high-profile clubs and expensive wage bills. We know this would be a difficult league to get out of, but this is some way off yet.
We are close to signing an agreement with a 3rd Party provider for the Gym at the revenue stated. We believe that the Community Room is attractively located for local community groups to use for meetings, and that the projection is reasonable.
The current deal, which expires in 2024, brings in minimal revenue to teams (£6k facility fee for home teams, and £2k for away teams). We do not know whether the deal will be renewed, especially with the recent BT/Discovery deal, so have acted prudently to exclude TV revenues from the Plan.
Year 5 predicts a higher league which has more games meaning the 3G Pitch is slightly less available for 3rd party rental.
This is linked to the number of games in the forecast league the club will be in for each year. On match days we assume we cannot also rent the room out for community use as it will be used for supporters.
Note that ‘Shirt Sales and Merchandise’ includes shirt and merchandise sales, programmes and kiosk/café income In Year 5, the £83,292 is broken down as follows:
Shirt Sales and Merchandise 33,708
Programmes 19,167
Café 30,417
They are included in Ground and Match Costs at £1,750 per match. Bury AFC currently use Taurus, a reputable security group who are used by a number of EFL clubs. All of their staff are DBS checked and have appropriate qualifications for the roles that they conduct.
None of our volunteers are performing that role. Their roles are solely customer service based, with the objective to observe any issues and inform the stewarding team from Taurus.
Yes
We plan to have two Community Asset Managers, a Community Liaison Officer, a Groundsperson and an Apprentice. The Staff Wages line includes National insurance and Pension Payments
Our supporter ownership model is different to that of other clubs at our level. We also have a commitment to deliver a benefit to the wider Bury community. The Community Liaison Officer is critical to ensuring Gigg Lane and Bury Football Club is delivering that benefit.
Volunteers have played a massive part in the huge progress made by both organisations to date and they will continue to be an invaluable part of all future success, but in order to optimise income streams, the facility needs to be actively and continuously managed and promoted. This means that full time staff are required.
This would ultimately be a decision of the Board at the time but we assume that the use of the 3G, Gym, Community Café will remain relatively constant, and not be impacted by the team’s progress.
Inflation is not included in the business plan for costs or revenue. In practice they should broadly track each other. The football teams’ budget does increase, but the operation of the stadium should not materially change whilst still in non-league.
Using the Year 5 Figures
Ground and Match Costs
Security £52,250 (includes match day and during the week)
Catering £21,233
Travelling and coach hire £12,700
Football kit (Players & Coaching Staff) £8,021
Players Drinks/Food £7,360
Matchday officials £6,900
Medical expenses £6,000
Total £114,464
Maintenance and Repairs
Maintenance and Repairs is all captured in “Pitch Maintenance, Community Room and Gym Maintenance”. On reflection this was not clear when we converted the numbers to the Bury AFC format. Having spent a considerable amount on the stadium the general maintenance will be light and more material capex projects would need new capital from either reinvested profits, grants or benefactors (most likely a combination).
Under Football Staff Wages
Ultimately the amount spent on Wages will be the decision of the Board based on affordability at the time. It is possible that these numbers are low but the background to the calculation is outlined in the Business Plan. Note that certain revenues such as season tickets are charged at 20% VAT, and the formula is based on gross income, rather than net income shown in the published P+L
The current business plan automatically allocates 25% of the revenue generated to the football club playing budget (which includes manager and coaching staff). This creates a
budget which should allow the team to compete at each level, although from Step 3 upwards additional budget would probably need to be allocated to the playing budget to gain promotion. This is most evident in Step 1 where significant sums can be spent on playing budgets to get into the EFL
The FSA have vetted the budgets and confirmed they are broadly comparable with other clubs over time and across the various levels of the pyramid. Of course, certain clubs have spent far more in certain circumstances backed by wealthy owners but we are reassured these budgets provide a good manager with a competitive squad at each level.
Utilities is linked to the pitch rental as floodlight costs will be the primary cost item. It drops slightly as we will have extra matches, therefore less 3G pitch rental higher in the league pyramid. The forecast difference year on year is minimal. Yes, this includes internet and telephony.
This is a general contingency line and we do not believe that it will be materially impacted by potential progress up the Leagues.
The club may grow and we hope it does. If revenues grow then expenses may do also, however we must maintain budgetary discipline.
Yes – we allocate 20% of the Pitch revenue to the Sinking Fund
Year One is an extended period as it includes costs from before the proposed merger. Year 2 is the normalised level. Utilities rises sharply in Year 2 as it is linked to pitch rental and the required floodlighting.
The P&L demonstrates the differing cost structures at each level. As the Business Plan states, promotion each year is ‘unlikely’ to happen. The match day revenues and playing costs are the main variables. So if for example it was assumed that we remain at Step 3 for 3 seasons, please use the match day revenues and player costs for Year 3 for the following 2 years to assess the impact. The data can be used to model your own assumptions.
Reduced income would be balanced by a reduced investment in the playing squad.
It is also important to stress that the Board will be charged with running the Club, and reacting appropriately to changing circumstances as they occur.
Ultimately, the Plan demonstrates what is needed to permit the Club to progress. Stagnant or steadily declining support will impact on the Club’s ability to gain promotion, particularly from Step 3 onwards. Bury AFC attracted an average of 1,400 in our first full season at Step 6, when there was a split in the fan base, away from our usual location . Bury FC’s average attendance for the past 20 years of our existence in League 1 and 2 was around 3,200. In general terms, an average attendance at Step 1 of around 2,500 feels feasible and realistic, especially if community engagement is strong, pricing is competitive, and people choose to support the venture.
Despite the crowd reductions, there is nothing to indicate that the clubs cited above are teetering on the edge of extinction. Football is a complex, emotive and unpredictable business and to the onlooker, those clubs have been reasonably successful, which shows that with good management, organisations can adapt to changing circumstances and move forward.
It is also important to stress that the Board will be charged with running the Club, and reacting appropriately to changing circumstances as they occur.
Research has shown over a number of years that use of the same ground by a resurrected football club results in the retention of a high percentage of supporters.
These are estimates based on a detailed knowledge of Bury FC’s and Bury AFC’s attendances over the past decades. An estimate that the average attendance will be somewhere between 1,000 and 3,000 over the coming 5 year period would appear to be based on historic performance.
It was the base figures
Year 1 1,600
Year 2 1,750
Year 3 2,200
Year 4 2,400
Year 5 2,500
Higher crowds means more funds in the clubs to support the aspirations of the team. Lower crowds/revenue means the budgets have to be reduced and the team will be less competitive. With no cash able to leak out of the club our fortunes are entirely linked to how we manage, promote and support the team. But at a baseline with 1,400 regular supporters the club is sustainable, assuming all other elements of the plan perform as expected.
• A lack of attendance and volunteer support due to an inability of supporters to unite and work together
• A disruptive environmental event such as Covid, or similar
• Inflation/major economic downturn putting pressure on supporter spend and sponsorship revenue and increasing costs
The first is the one in our collective control, requiring calm heads and a focus on the big picture.
The second two require agile management of budgets, and the maintenance of a capital reserve which Bury AFC bring to the project.
These risks are real, but none are reasons to walk away without trying.
The Board will be charged with running the Club, and Operating Company. Appropriate, transparent tendering processes will be followed, and all individuals with decision making powers will be required to make declarations of interest. Opco will be run by appointments from the board, which is fan led. The people will be the permanent employees selected through a normal recruitment process. Opco will not be outsourced to a 3rd party, though the Gym operations may involve a specialist on a licence/lease/franchise basis.
We are confident that there will be substantial demand for the facility and being based near colleges, schools and a large local population is an advantage. There is a huge undersupply of artificial pitches in the area which will continue even if artificial pitches are built in Ramsbottom and Radcliffe. It should be noted that these are for their football club stadiums, just at local facilities. Bury Council has a paper in the public domain confirming an 8-9 pitch shortfall in the borough and limited options on where to locate new pitches even if the budget is available. Goshen is fully booked for the coming year and effectively not available to the general public. Radcliffe and Ramsbottom will help, but there is ample demand versus supply. We are very confident in the demand for the pitch, particularly given its unique environment.
