In April I was lucky enough through work, to be able to take part in a trip to Thailand and Cambodia for 15 days. Six of these days I spent in Bangkok, while I was there I thought it would be interesting to see what kind of presence (if any) we have in the city and see if Chang really are as big as the club make out.
When we were driving down the expressway through into Bangkok one of the first sights that greeted my eyes was a 10 storey (probably more) photo of Ryan Giggs with the United badge, Premier League badge and most importantly the Singha beer logo right at the top and bottom of the advertisment. This set the tone for the rest of my stay.
From my impressions the club are certainly right Chang is an absolutely huge brand and their logo is on every single bar/cafe/eaterie, you will even see hundreds of people per day wearing Chang t-shirts. But my biggest surprise was that bottled drinking water is the main Chang product not beer.
Singha seemed to be the most popular beer, everything that acompanies Singha; a beer mat, poster, billboard etc has a Manchester United attachment along side be it just the badge or a player. Even so I thought Chang are everywhere, we must have a quite a respectable following or at least a lot of people will know who we are! No. Not in the slightest. It is an utter waste of time trying to break into that market as it has already been saturated by Arsenal, Chelsea, United, Liverpool. The commercial nous and expert marketing by these clubs ensures that they are well liked and supported.
My disappointment was that while everything Singha advertised or sold had United with it, Chang had nothing. While there were images of the aforementioned teams all over the city the Blues were nowhere to be seen. You would expect who ever negotiated this sponsorship deal that any advertising, labels, packaging a certain percentage would have to feature Everton in some shape or form in order to push forward (I hate this word but the club have been using it a lot recently) our brand. This obviously is not the case.
Which brings me onto the deal itself which I believe expires at the end of next season, £4 million pound per season is a very poor return for a consistent top 8/6 side. We now have Newcastle, Sunderland, Aston Villa and Spurs earning more per season at an average of about 6 million. Apparently we run at a £5 million loss each financial year there is your difference straight away. When as a club we need to be stretching every possible avenue, it feels we are being left behind once more. I don’t need to go over the kitbag deal we all know how bad that is at £3 million a year. But by outsourcing all their controllable streams of revenue right down to match day catering and club shops, we have tied our hands behind our own backs as a club. And there lies the problem, Everton Football Club is ran as club not as a business or a PLC , but as a club. We have absolutely no scope to improve the business model to increase revenue streams to provide much needed transfer funds or to break even.
One option that is never really discussed or talked about by the various fan pressure groups is the idea of becoming a PLC and raising money instantly through a share rights issue. This is something Spurs have done time and again to great effect raising £15 million almost overnight to fund planning and infastructure for a new stadium in 2009. Manchester United most recently doing this on the New York stock exchange to raise £150 million. There are no doubt risks associated with becoming a PLC, however if you look at the structure of clubs unless they have a wealthy benefactor the main premier league clubs have been on the stock market at some point to attract investment. The initial share price will be higher than the true reflection of the clubs worth but it will allow fans and other potential serious investors to put much needed funds into the club.
With FPP coming into effect very soon I don’t see what other alternatives are out there. I think this is an issue which needs serious consideration from the well known fan groups to push as a policy and a viable solution to the desperate lack investment which is stopping us competing with the teams not only above but below us as well. As a football club we are currently standing still and have been for the past 4 years at the very least. Progression on the pitch has hit the maximum level it can without serious further investment. Which brings to me what is ‘holding us back’ as we are constantly told, Goodison Park as great as it is is an outdated stadium. We are told even most recently by our outgoing manager than we cannot compete on matchday revenue and ultimately that is leaving us trailing behind our rivals. Our lack of corporate hospitality is the main reason for needing a new stadium.
All true and fair points which have been stated many times down the years. So why hasn’t anyone at the club done anything about it? You do not need a new stadium for extra corporate hospitality. In the mid nineties all of the major premier league grounds received a renovation. Old Trafford, Highbury, White Hart Lane, Anfield, St James Park and Villa Park were all modernised. We were left behind once more. The Park End was knocked down and rebuilt. I propose we do the same again. It is clear that we are not moving in the near future it is hard to imagine us not still being at Goodison in 15 years time. You can then rebuild the stand two tier with extensive corporate hospitality. Wolves have just done this to the cost of £18 million pound their new stand holds 7,700. It has only taken them a year to do so. So we could also potentially increase the capacity by a good few thousand depending on our design allowing more fans to have a great view of the game and vastly improving our match day revenue, you could also incorporate better office space and a museum that the much vaunted Everton place was going to house.
But who will pay for all of this? We don’t have that kind of money? Well actually we will have with the new TV deal coming into force next season, a minimum of £14 million to be precise but with our solid league placing and a good percentage of our games televised I have no doubt our share will be higher than that. But what about using that money to invest in players? Good question, use the upcoming expiring sponsorship deal to renegotiate with a new commercial partner and offer the new stand as part of a naming rights deal included in the shirt sponsorship over the life of the new contract. So it would be entirely self-funded (I’ve heard that one before). If they are not interested put it out to tender on its own. I realise naming rights be it a stand or a stadium are a sensitive issue but this is the stark choice we are now faced with if we want to truly compete to elevate the club into the Champions League. So armed with a share rights issue and floatation on the stock market, new stand bringing the match day revenue to a respectably and competitive figure, new main sponsor deal, new TV rights deal we are well equipped to fully back the new manager who ever he may be. That is my vision for our great club. I’m hoping our board and CEO have the same foresight, I for one am not so sure.
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