Surviving COVID-19: Part Two – Repairing the revenue

With clubs seeking new ways to make revenue, South Shields have allowed fans to invest as stakeholders, with their new innovative way to make up for lost money.

Clubs in the National League structure have been left in confusion between grant extensions and loans leaving clubs like Blyth Spartans in trouble.

Due to next season’s finances now in mind, clubs like Whickham FC will have to set up with a lot of financial unknowns and potential sponsorships on the line.

The future of non-league football depends on financial support, with clubs actively seeking ways to keep making money without matches being played.

An ambitious move by South Shields has saw stakes in the club sold to supporters in an attempt to bring finances into the club for further investment.

South Shields’ business development manager, Colin Doherty said: “It was a really make or break decision if we don’t do it now, we may never do it so we thought the clubs struggling we might as well give it a try and touch wood, we’ve been very successful with it.”

Geoff Thompson’s club have lost approximately £10,000-£15,000 per matchday on ticket sales alone.

He added: “Obviously we lose the full revenue of the food and drink sales from every home game, so that’s 21 matches not including cups, so it is a huge dint in our turnover.”

Despite the main objective of raising funds for the club that may have been lost due to COVID-19, Doherty commented on the owner’s future plan with selling shares.

He said: “Looking at the share issue, it is something that will progress because the owner would at some point want the fans to own the club and basically manage the club as a supporters trust type of thing.”

The club used a site called Seedrs who held and controlled all of the external shares bought by the investors.

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He said: “All of the shares are held by Seedrs on behalf of the investors so its fully externally done now, yes we had to pay a premium for that but what that gave us was confidence in Seedrs experience, so every target for the investors would be hit correctly and that has already been surpassed with the amount invested.”

The Mariners made a gross of around £370,000 through the sale of shares, with the club using the funds towards ground maintenance and smashing their initial target of £250,000.

South Shields may have some clubs copy their method, with clubs in the National League divisions left with barely any income due to the cut off of grants.

Sport England then offered loans to cover the loss of grants, but due to a miscommunication it was found out that these loans broke National League laws.

Blyth Spartans chairman, Tony Platten, was one of many chairmen in a National League division who was worried about where the clubs would raise finance from.

He said: “It was a real mess the situation with sports England because we weren't given the correct information right at the start of the procedures and those would have been loans that were repayable over 10 years."

Dr Robert Wilson, football finance expert at Sheffield Hallam University, thinks most clubs should survive but believes not all clubs will survive.

He said: “Particularly those that have committed to overspending and budgeted to make a loss. Their failure to provide a plan that is resilient to a downturn in trade is of their own making.”

However, Steven Wade the chief executive of North Riding FA revealed where the clubs are losing some of their money.

He said: “Potentially some clubs are employing staff so there are issues around furlough, so they are paying staff whilst they have seriously reduced income streams.”

Wade spoke about how much of a task this has been for non-league clubs.

He said: “Clearly it has produced huge challenges for clubs, primarily those in step six and above in the National League system which is Northern League Division Two upwards at that level spectator are paying to attend games there are a lot of secondary spending grounds through spending money on food and drink in clubhouses.”

The North Riding chief executive then voiced his opinion on the season being declared null and void.

He said: “It has had a massive impact on the clubs, that’s the dealings that we’ve had, it’s not financially viable that clubs play without spectators, certainly in the lower echelons of the National League system pyramid.”

Clubs in the Northern League divisions may have more support from their governing body, but they were still hit by the devastation of the pandemic.

Whickham FC’s chairman Ben Riley, spoke about his expectations of suffering financially after last season was abruptly ended by the virus.

He said: “Our finances would and should have been hit hard due to the previous season ending prematurely, this meant our existing sponsors did not get value for their contribution, so the decision was made not to approach and re-ask them for further contributions for the new season."

In spite of the fact, they were in limbo about their long-time sponsors and expected a backlash, Riley spoke about their tactic moving forward with finances.

He said: “What we did is approach many new sponsors and actually managed to achieve our best result ever in terms of commercial revenue.”

Our new sponsorship packages are out for the 20/21 season. We've already had a fantastic response from our local...

Wade explained the objective of county FAs throughout the pandemic and the support they helped clubs receive.

He said: “From the county FA’s point of view, two key things we have to do, make sure the clubs have the correct guidance and make sure that where there is support available to them financially that we have been able to provide them with that information.”

Through these available grants, Whickham FC received £4,500 to ensure their ground was COVID safe for when football returns.

With many clubs now having to plan for next season already, Platten and the Spartans have prepared a proposition based on many unknowns.

He said: “We've taken one small step forward and as much as we now know the league has been terminated what we've now got to try and do is put together a budget based on a lot of unknowns, if we can't play games with a crowd, we will not start playing football again, unless grants like the ones we received up to December were made available again.”

One club that have certainly taken the approach to build for next season is South Shields FC, with chairman Geoff Thompson commenting on his future ambitions.

He said: “We continue to invest in the club, and we see ourselves as the important part of our community, we’ve got our own charitable foundation we set up about three years ago now that is also an important element of what the club is trying to achieve and what it represents.”