|[Blog] Spin and Statistics|
Written by SanityBlue on Sunday, 12th Dec 2010 11:52
One of the most alarming features of what has happened to our club since the Marcus Evans takeover has been the slide in attendances. But if you were to believe the main spin doctor, CEO Simon Clegg, Ipswich Town’s attendances are holding up relatively well by Championship standards .
This is what he had to say at the club’s AGM on 7 December: “Numbers this season are 5% down to date on where they were last season and we have fared better than most with our numbers only 2% down.”
Really? The Football League’s website shows that in the 2009/10 season the average Championship crowd was 17,935 and in the current season up to the time of the AGM the figure was 17,110. This indeed is a decline of 5%. However, Ipswich Town’s corresponding numbers were 20,840 and 19,465 which translates to a fall of 7%, not 2%.
If this was just a statistical blip there would be no cause for concern but attendance data over recent seasons shows a definite downward trend. In 2005/06 average attendances at Portman Road were 24,253. Our current season average of 19,465 means the decline is a disturbing 20%.
But perhaps the 2005/06 season should not be the basis for comparison. Although we finished 15th in the league in 2005/06, expectations had been high as we had almost achieved automatic promotion the previous season. Therefore, this would have been reflected in high season ticket sales.
The season 2006/07 would be a better basis for comparison because pre-season expectations were not high and this was borne out. The team with Jim Magilton as its rookie manager finished a modest 14th attracting average crowds of 22,445. Therefore, even with 2006/07 as the base, the decline is still a worrying 13%.
How has the Championship in general performed over the corresponding period? In 2006/07 average crowds were 18,189 and, as previously stated, in the current season up to the time of the AGM the figure was 17,110. Therefore, the fall in Championship crowds as a whole has been only 6%.
It is clear then that in recent seasons we have been losing fans at a significantly higher rate than our rivals and our claim to be one of the Championship’s bigger clubs now looks questionable. On current numbers we are only the ninth best supported club.
Another of Marcus Evans’s minions, the finance director, Martin Pitcher, had this to say at the AGM:
“In terms of what goes in and out of the bank account, which is more important than the notional accounting charges, it’s in the order of £5 million to £6 million a year, the difference between the cash income – tickets, money from the league, any commercial income – less the cash costs of running the club – salaries, any payments to any suppliers, police charges etc. That £5 million to £6 million is what Marcus funds per year and in addition he will fund any capital expenditure on player purchases.”
This doesn’t add up. A business that is operating at a loss can keep going only by obtaining new equity or debt funding. There is no indication Marcus Evans has injected additional equity into the club therefore any funding that he provides would have to show up in the year by year movement of the intra group loan. Let’s do some simple arithmetic.
The accounts as at 30 June 2009 reveal the club owed £33.7 million to the Marcus Evans group. We were informed that in the last year interest of £3.1 million accrued on the debt. If on the basis of Martin Pitcher’s statement we added a further say, £5 million, for the funding of operating losses, the intra group debt as at 30 June 2010 would come to £41.8 million. However, the information sent to the minority shareholders shows the debt to be only £36 million. The discrepancy would be even bigger if we included the net expenditure on player transfers that is said to be entirely funded by Marcus Evans.
Martin Pitcher pointed to operating losses of £5 million to £6 million per year but omitted to mention they have blown out under the current regime. My calculations indicate that in the last three seasons before the takeover these losses only averaged around £1.4 million.
Whatever the actual size of the contribution of Marcus Evans to the club’s coffers, it is a bit rich to trumpet this funding when it is the current regime’s own mismanagement of the club that is mainly responsible for the operating losses being as large as they are. There are five obvious reasons for the blowout:
1. The decline in attendances 2. Lower commercial revenue 3. Excessive player wages 4. Over-reliance on loan players 5. Generous salaries to Messrs Clegg and Keane
All of the unfavourable factors listed above can be sheeted home to the current regime. Each one deserves a detailed discussion but I will leave that for another time.
My views on the Marcus Evans takeover are well known. I believe the club should not have been sold. It would have done better to seek to negotiate a reduction of the debt with Norwich Union and if that failed it should have taken its medicine in the form of a second administration and then lived within its means. Its prospects of Premiership football in the foreseeable future would have been extinguished but at least it would have been independent.
As a stand-alone entity we would have enjoyed a higher reputation in the football world. Those entrusted with running the club would have had a greater respect for the club’s culture, traditions and fans. There would have been greater transparency and we would not be fed with information that is spin at best and distortions at worst.
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