Aberdeen FC have announced their wages‐to‐turnover ratio rose from 68% to an alarming 85% after one of the toughest financial years in the club’s history.
Annual accounts published by the Dons for the year ended 30 June 2021 underline the profound financial impact of the coronavirus pandemic.
The wages-to-turnover ratio had previously jumped up from 58% in 2018/19 to 68% in 2019/20.
A wage-to-turnover of 60% or under is considered best practice for a football team.
Aberdeen also announced operating losses of £5.19m during the 2020/21 financial year.
However, chairman Dave Cormack has thanked supporters, staff and investors for their part in ensuring the club avoided making any redundancies or major permanent cuts in expenditure during a difficult year.
Supporters were prevented from attending Aberdeen games from the outbreak of the Covid-19 pandemic in March 2020 until the start of the current season in August this year.
With no fans through the turnstiles for more than a year and corporate hospitality lying dormant, the club’s finances suffered.
The accounts show a decrease in turnover of £3.26m from £14.33m to £11.07m, with an operating loss of £5.19m compared to £2.92m the previous year.
Wages reduced from £9.77m to £9.36m during the period.
US-based businessman Cormack said: “The overarching challenge for the club has been the coronavirus pandemic.
“When we compiled last year’s annual report, we still held out hope that we might see the return of fans to football matches and the restarting of matchday hospitality during the 2020/21 season, both of which are key income streams, but neither of these materialised.
“We had optimistically assumed that we might get a return to some degree of normality from the start of 2021.
“But, other than one trial match which 300 fans were allowed to attend (1-0 defeat of Kilmarnock, September 13, 2020) we had to wait until the start of the current season before fans were allowed back in a limited capacity.
“The exclusion of fans not only impacted on the atmosphere at matches but also decimated the club’s mainstream commercial revenues of match day gate receipts, hospitality, advertising, sponsorship, and retail sales.
“Supporters, sponsors, clients, staff, management and the board have all contributed to the club getting through the pandemic and navigating our way through a projected £10 million shortfall.”
Chairman thanks supporters
A combination of player sales, Business Interruption Insurance, fans buying more season tickets than anticipated, staff taking a temporary cut in pay, an injection of new cash from investors and an interest‐free loan from the Scottish Government, allowed Aberdeen to avoid making any redundancies.
Scotland international Scott McKenna was sold to Championship side Nottingham Forest in a club record fee for the Dons of £3m plus achievable add-ons in September 2020.
Striker Sam Cosgrove was sold to Championship Birmingham City in January this year in a £2m move.
Despite the uncertainty of when supporters would be allowed back into stadia, loyal Dons fans still purchased season tickets and AberDNA memberships.
Cormack thanked the Red Army.
He said: “We fully appreciate that many fans and families were facing their own challenges, so it was particularly heartening to see this contribution retained.”
Change in management team
Despite the unprecedented challenges during the pandemic, Aberdeen have continued to progress plans to build a new stadium.
In March this year, Aberdeen also appointed manager Stephen Glass and assistant Allan Russell as replacements for Derek McInnes and Tony Docherty, who had been axed.
In a restructure of the football operations, Steven Gunn was promoted to the role of Director of Football from his previous position as Director of Football Operations.
Cormack said: “Our long‐term management team of Derek McInnes and Tony Docherty left the club in March 2021.
“Having served the club admirably for almost eight years, including victory in the 2014 League Cup final, featuring in a number of cup semi‐finals and finals and regularly finishing in the top four of the league.
“They left with our best wishes for the future.
“In his new position, Steven Gunn is responsible for all the club’s football business, including the youth academy, professional men’s teams, and our women’s team.
“Furthermore, the new management team has been tasked with realising the club’s vision of playing attacking and entertaining football, including giving academy players their chance to develop and play in the first team.
“Young players are critical to the club’s success and it has been particularly encouraging to see academy graduates, such as Calvin Ramsay and Jack MacKenzie, get the opportunity to prove themselves in the first team in recent months.”
Season ticket number target
Chairman Cormack reiterated the club’s aspiration of reaching 15,000 season ticket members.
He said: “Growing our supporter base is vital to the on‐going sustainability of our club.
“This is why we are focused on fan engagement, improving the match day experience and nurturing the next generation of fans through the AberDNA Junior programme.”