Over the last week BN has published a number of articles from an interview conducted with Hereford FC chairman Ken Kinnersley. To conclude the series the conversation turned to the playing budget.
"The football budget is the starting point," said Kinnersley.
"In
some respects it's a bit like the stock market, it can go up as well as
down and you may not get back all your initial investment! Sometimes
there can be a readjustment in value that is good then again it can
equally go the other way!
"However,
we've put safeguards in place as with all our arrangements that if
attendances start to fall away and as a result the predicted level of
income that formed the original basis for the playing budget - then it
may be reduced accordingly.
"So
it's the fans who are definitely leading the way in terms of the funds
that are available to the manager. The supporters have already
demonstrated they will come out in force and support a reasonably
competitive team but if, for any reason, they stay away then the funding
may have to be reduced and the team may become less competitive as a
result. Clearly, we don't want that to happen but that is the reality of
the situation.
"Our
model is all about the fans, they are the ones that are keeping this
football club going and it will be the same fans, and, indeed hopefully
more, who will be the basis of any success the team enjoys.
"There
is no individual willing to provide additional funds at this time
unlike some of the clubs we visit in this league. We have already played
a couple of teams where wealthy local individuals are “investing” money
in the local football club. That's absolutely fine but only for as long
as it lasts! What happens if and when the novelty wears off or more
likely the investment proves to be too costly? A lot of clubs, and for
clubs read “fans” have found out the hard way that to depend on a single
investor or even more than one investor who looses interest, and more
likely than not they will, can signal an even greater disaster for the
club.
"It's
great while things are going well but we are intending for this club to
be here for the long term so we need to have a sustainable operating
position and then any other financial income from whatever source will
be a bonus but it won't be finance on which the HFC Board will rely.
"All
we are doing is operating a club and more specifically a team that
reflects the level of support through the turnstiles and this applies to
just about everything we do.
"At
this time something in the region of 70% of our income is through the
turnstiles with the balance generated by commercial activity.
"George
Webb is working hard to try to realign that 70/30 split so that we are
less dependant on the variables i.e. the size of the crowd. However, at
this level in the absence of any substantial annual league funding it is
going to be very difficult if not impossible to achieve if the well
qualified advice we have received proves to be correct – and I believe
it will.
"So this is why we promote seasons because one of the benefits to the
club of supporters buying season tickets is the fact that not only does
it help with the uncertainty of financial income each match day, it also
shows us roughly how accurate we are with our financial forecasting.
"Season
tickets are to be commended, they are nothing but good, fans who buy
early do so at a discount and as a club we have made it our policy to
assist “families” as much as possible. They are the social group who are
under the most financial pressure – at least that is the case
statistically but we all know about statistics! We are also told that
the “silver “ generation are now “the better off” but in my case I can't
agree with that!
"The
other “gain” from a season ticket is that holders receive priority for
any “all ticket” matches and also important is the fact that every
season ticket holder reduces the pressure on the staff in the ticket
office and they don't have to queue on match days. So, all in all, if you
are a regular at Edgar Street and you can afford it do please buy a
season ticket."
Currently the club has a 'war chest'.
"I
would not want to see that change. Financially, there is the known, by
which I mean the anticipated but there is also the unknown. For example,
we all know the Blackfriars End is a problem, we know it will be
redeveloped but we don't know precisely when or what the full cost
implications may be for the football club.
The
current ambition of Herefordshire Council is to identify a financial
model through which the commercial redevelopment funds or at least
provides the majority of funding for the new stand but that is, as yet,
far from signed and sealed.
"We
are looking after the family silver because it will be needed one day,
possibly to meet some of the stand costs. Of course, there is the
possibility of a financial grant from the Football Foundation.
"The
good news according to Martin Watson is that financial grants from the
Football Foundation for stadium redevelopment / improvements have just
been increased from a maximum of £500,000 to £750,000 but that's over a
25 or 30 year period.
" I'm very keen that it is understand and appreciated by the developers
that the Blackfriars is only one quarter of this ground. So if
Herefordshire Council want some of the cost subsidised by the Football
Foundation it will be no more than 25% of our “maximum entitlement” over
the 25 to 30 year period because we have three other sides of the
stadium to maintain and hopefully improve as well.
"It
is also common knowledge that the Meadow End will need to be attended
to within the next 5 to 7 years and similarly, that will require
financial investment as will other parts of the Stadium.
"Invariably
the annual structural inspection identifies a considerable number of
repairs, usually expensive, that have to be addressed to secure the
annual safety certificate.
"Taking
all the “doom and gloom” into account, that is not to say that the
Board would not invest in the future of the club if the terms and the
long term strategic benefits were advantageous. Each case is judged on
it's merit."
Is hospitality income still growing?
"Whilst it's early days yet, it looks as though this is going to be a very successful season in terms of hospitality.
"Last season, early on we did have a slight concern about the lack of advance bookings but it soon picked up.
"This
season we've got hundreds of bookings going forward. I'm not sure
what's brought that about but we must have been doing something right.
Terence and Emma have introduced their own brand to Edgar Street, so it
is true to say the overall standard has improved and, of course, we have
invested in the Hereford Suite again this past closed season. Add to
all that the wonderful “Edgar Street Experience” that Commercial Manager
Martin Brain devised and now delivers at hospitality events, then, yes
things are up a level.
"In
fact, during the recruiting process James Smith told us he thought
Reyas Catering would take us to the next level and I think he has been
proved correct."