Maidstone United owners blog: The costs involved running a full-time National League club
Maidstone United co-director Oliver Ash has posted the following article on his blog https://www.olivernjash.com about the challenges the Kent club face to compete in the fifth-tier of English football, the Vanarama National League.
Despite regular home crowds of over 2,000, the club are second from bottom in the table and are six points adrift of safety with 16 games left to play.
Mr Ash, who is also a director of the National League, published this piece as a question and answer article and opens up the club’s struggles and ambitions to complete with other full-time clubs in the top-flight of non-league football.
“Yes we do (have ambition), we want to be a successful, sustainable, stable and family-friendly club.
“We know we’ve made some questionable decisions this season: apologies but we’re only human and we always seek to do our best in the long-term interests of the club.
“We’re ambitious for the club to rise as high as it can in the football pyramid while respecting the above goals.
“After three difficult years in National League we now realise it will take longer than we thought to get into the EFL (English Football League) but so be it. With our financial structure – and unwillingness and inability to subsidise the club – that’s where we are for the moment.
“We’ve invested in a £5 million stadium fit for National League but not EFL League Two (another £1-2 million would be needed). No other club except Fylde in National League has had to build and finance a stadium from scratch in the last eight years.
“The business model means there is little spare cash to finance the business except that which is generated from the business itself.
“In good seasons we have managed to get promotions while earning enough revenue to keep building the stadium so we would comply with League rules. This means we have no cash reserves built up. It is all in the metal and concrete.
“In difficult seasons like this one, where we have extra costs from changing the playing squad and management and crowds have dropped significantly, the cash flow is under great pressure. It is a vicious circle.
“People don’t always realise that there is constant capital expenditure and maintenance needed to keep the show on the road.
“This season for example we have had to replace the floodlights and restructure the pylons at a cost of some £40,000. Last season we installed toilets under a stand (£60,000 if I remember correctly). In another season or two we will probably have to replace the pitch.
“We understand that (particularly the more recent) fans might deem the current situation of struggling in the National League for three seasons too awful to bear but every supporter who gives up on us reduces our revenues and impacts the budget. You need to know that.
“Right now the National League is so tough to survive in financially that we will struggle to break out unless we find a new source of funds.
“We are always open to consider new investors or partners who could have better financing and a sensible strategy going forward. However as we are at present, if we manage to recruit more wisely, we should be able to enjoy stable years in the National League and/or play-off years in National League South.
“We hope fans will buy into this reality as something to savour not to abandon. In due course we will find a way of moving on upwards but it will take time. It may be the same sort of ‘yo-yo’ situation as we experience with Brive rugby club at present; we just have to make the best of it.”
Mr Ash confirmed the club does not have an £800 per week wage cap for it’s full-time players.
“We set playing budgets where we believe we can afford them as part of the overall forecast for turnover and expenditure in the business.
“We have never set any individual player salary caps although we judge on a case by case basis if we think we should make a special effort or pay a fee for a particular player. I think it would be indiscrete to individual players to give more detail on this.
“I challenge you to find me any other club where the owners are so open with information about the club, regularly do Q & A sessions, publish blogs about the club, submit their accounts promptly, sometimes with additional comments and press releases and provide information whenever reasonably requested (without breaching confidentialities) on every aspect of the club.”
Co-owners Mr Ash and Terry Casey do not take any monies out from the club.
“None. No interest, no salaries, no expenses. We hope to recover some or all of our investment as and when we divest in due course but even then a principal goal will be to leave the club in good hands, otherwise all that has been built up will have been in vain.”
There are many loan players from EFL clubs playing in the National League and Maidstone United are no different.
“Sometimes you don’t want contract commitments to players. This season ironically we planned to put more players on contract and in the end this has slightly back-fired on us. Several players have gone out on loan during the season but only on reduced wages, so this is costing us significant amounts of money and impacting the current playing budget.
“We can’t afford to pay top striker’s wages right now, particularly if this means we have to relocate the player and put him up in a hotel or flat. We can’t really afford this sort of arrangement at the moment, we have to be more selective. But yes, we are looking for an affordable big centre forward who knows where the goal is…”
When asked about replacing the first 3G pitch after four years, Mr Ash replied:
“It was wearing out quicker than we planned because of the high usage. It had to meet demanding standards of the leagues (FIFA 2*) in terms of ball roll, bounce, shock absorption, etc, while at the same time being used extensively (50+ hours a week). It failed its test in 2016. We then had a panic to replace it as economically and fast as possible in Summer 2016, which disrupted our Summer and pre-season useage. This time around we hope to get five or six years out of it but we have to be ready to finance another one as from the end of next season just in case…this might cost around £100,000.”
His next question was whether Maidstone United will play on a grass playing surface.
“Not so fast please. Never say never. It’s not going to be easy but as I still believe in the massive benefits of 3G to smaller pro clubs I still believe it will be accepted sooner or later in EFL.
“One alternative proposal we are making at present to EFL is that League Two should accept a grace period of three years to allow National League 3G clubs a reasonable time to replace their pitch. So if a club were relegated after one or two seasons they would have been able to keep their 3G pitch and maintain their community structures.
“Also clubs might just install a better natural pitch after a season or two of planning and with the benefit of having enjoyed generous EFL funding for a couple of seasons. This would ultimately benefit all League Two clubs.
“Going back to grass is simply not an option for us at present. The 3G pitch does bring in significant revenues and it gets people coming down to the club and becoming involved. It’s part of our DNA. Replacing it next time will not be cheap but it won’t be ridiculous either.
“In 2016 we invested in a new engineered sub-structure which should last 20 years. This means only the actual carpet needs relaying.
“Don’t think natural pitches come cheap either! High cost and high maintenance. For a top hybrid pitch we’d need not far short of £1 million to install one and you can’t play more than roughly 10 hours a week on it depending on the weather so it won’t allow any significant community use. 3G, hybrid and natural pitch technology is all changing fast so we have to try and keep our eye on the ball here and be creative and reactive.”
When asked why the National League is such an impossible one to survive in, Mr Ash replied:
“The fact is that the five professional divisions in English football are administered by three separate leagues, The Premier League, The Football League (EFL) and the National League.
“These are not administered in a uniform, structured way. Rules are different between the leagues and there are rich and poor divisions.
“When you go from National League South to the National League you find the average playing budget for the National League is £500,000 higher than in the South division below; you cannot by law drink alcohol while watching a match, which probably costs us £80,000 in lost revenues ; the travel and accomodation costs are far higher as the league is truly national; to compete you may have to convert to full-time employment contracts and add various layers of playing and non-playing staff to your operation.
“If after all this your club is still standing well I’ve got more bad news for you, you may also have to fund considerable additional stewarding services to segregate matches. That all adds up to a hit of about £800,000.
“All this is in addition to any one-off costs of extending stadia to comply with strict rules on capacity, seating, dressing rooms, floodlighting, etc. After absorbing all these costs you might find you cannot increase your playing budget very much so you then find yourself battling relegation at the bottom of the table, resulting in crowds dwindling and reduction of ancillary revenues, cup income, etc.
“So the National League could be said to be the graveyard of the pyramid. This explains why clubs are so desperate to get out of it and spend obscene amounts of money in owner subsidies to do so.
“Forest Green Rovers were rumoured to be subsidising at £2 million a season while in National League and Ebbsfleet the same amount until recently. My guess is that today many National League clubs are still choosing/having to inject £500K-£1 million per season into their clubs. Leyton Orient’s new owners are rumoured to have already ‘invested’ £10 million since taking over in June 2017 as they try and make the leap into the promised land of the Football League (EFL).
“The bottom line is that annual handouts to clubs from the EFL from commercial and TV surplusses total around £1 million today for League Two clubs while they are less than £100,000 for National League clubs.
“There is of course a parallel with clubs in The Championship busting a gut to try and reach the Premier League, As an example take AFC Bournemouth in season 2016-17 in the Premier League. Their reported turnover was £139 million. Of this amount £124 million came from Premier League TV and commercial rights.* That’s 90% of turnover. Staggering. By comparison the money is considerably lower in the Championship. In 2015-16 season club turnovers were between £10–40 million and total losses in the division were over £200 million. ** Some clubs will risk everything to try and get to The Premier League. It is a similar story (albeit on a far smaller scale) with the gulf between the National League and EFL League Two.”
When asked what can be done to change this imperfection in the League structures?
“Now that’s a really good question. The answer is lots but football administration changes very slowly in England so don’t wait up for it to happen.
“40 years ago the Conference was created and populated with the top semi-pro clubs. Today the National League is predominantly populated with fully professional clubs in their diverse forms.
“When you look at some of the clubs playing in The National League today (or who have recently been in it) you could be forgiven for thinking this was a brother division to League 2. Here are twenty of them – Chesterfield, Tranmere, Leyton Orient, Hartlepool, York, Torquay, Wrexham, Chester, Stockport, Southport, Aldershot, Dagenham, Barrow, Macclesfield, Barnet, Luton, Halifax, Cambridge, Lincoln, Grimsby…
“One argument I find appealing is that this division should now be incorporated into the EFL as League Three. There could be renegotiation with the TV companies and other EFL sponsors for extra rights and fees, as EFL would have extra matches to screen and more product to sell. There would need to be a negotiation with The FA for additional financial support for the new division, integration of the division into the EFL rules, reorganisation of EFL competitions, etc.
“However, all this should lead to extra revenues being generated to provide League Three clubs with a financial support of, say, £300,000-400,000 per season, which would be a decent, gradual step-up between National League and League Two and which would be welcomed by all National League clubs and especially those clubs pressing to join EFL at present and risking a fortune to do so.
“The question of increasing promotion places up into League Two, the “three up three down’ campaign upon which the National League focusses so much attention today, would be resolved in one fell swoop : there would even be four up and four down as in the rest of EFL. Relegation from League Three would be as it is at present in National League.
“National League clubs playing on 3G pitches would also have their difficulties resolved by being members of EFL League Three and being entitled to three years in which to remove their pitch in the event of promotion to League Two.
“Clubs in League Three would be less likely to risk everything for promotion because the financial gap between League Two and League Three would be smaller than the current gulf between the National League and League Two.
“In terms of administration EFL would need additional resources to run an extra division but after the restructuring period these would not be significant and higher costs would effectively be compensated by economies as the National League would effectively disappear.
“The administration of National League South and National League North, now the highest non-league divisions, could be handed to one of the three leagues currently running Steps three and four of the national game. In due course sponsorship and rights sales would enable these two top non-league divisions to create new revenues, identities and prestige.
“Wouldn’t it make sense for the professional National League clubs of today to be incorporated into the EFL? Wouldn’t it make sense for non-league football to be regional with semi-pro clubs at its pinnacle?”
Maidstone United appointed John Still as their manager last night and when asked whether the club will survive relegation, Mr Ash replied:
“We still have a chance to survive but it will take a minor miracle. We’ll be doing everything we reasonably can on and off the field. If we do go down it will be a blow of course but we’ll recover, go again and bounce back stronger and better prepared next time.”