The financial position of the Club is something which may not interest all supporters. But it is something which affects all supporters, especially since the Trust owns a 10% shareholding in the the Club on behalf of its members.
In the following paragraphs we try to explain as clearly as we can the current financial position and prospects of the Club and the future implications for the Trust, its members and all supporters. A lot of what follows will have been previously discussed, but it will do no harm to set it out again. We’ve rounded a few figures to make things easier to follow.
We’ll start with a couple of points by way of clarification, since they often come up in discussions about the Club’s finances.
The first is the reference to the “£ 1 million” that the Club is “given” for being in the EFL. The actual figure is just over £900k and comes in the form of broadcasting rights plus a solidarity payment from the Premier League. In the case of Barrow AFC, more than half that sum is expended on things that arise from EFL membership, such as increased wages, higher match-day outgoings, ground compliance etc. That’s much the same as happens at other clubs. In Barrow’s case, the remainder of that money ( and much more ) has to be spent in bringing the ground and the pitch up to modern standards. Despite the efforts of past owners and volunteers, Holker Street suffers badly from a half-century of neglect and under-investment. For this season alone, the Club has spent over £1million on the ground. Some of that is supported by grants, but it would take at least three seasons of EFL income to do much of the work which ought to be done.
The second point is about the Club being in a strong position because it’s “debt-free”. That’s true, but only up to a point. The Club is only debt-free because the owners ( Tony Shearer : 40% ; Paul Hornby : 20% ; Kris Wilkes : 20%, TBC (formally Mark Hetherington) : 10% ; and the Trust itself at 10% ) have agreed to put money in to support the Club by buying new shares, instead of as loans to the Club. The Club is only financially sustainable as long as the owners are prepared to put in the amounts of new money which the Club needs to keep going or the Club starts to break even, or better.
Against that background, since taking over the Club a couple of years ago, the owners have put about £ 1.35 million of their own money into the Club. As you’ll know, through the two share contribution schemes and other fundraising, such as the 1901 Club, the Trust has put in £ 135k. That gives you an idea of how far the Club’s outgoings have exceeded its income and how much we rely on the owners.
That’s history ; what about the present and the future ?
For this financial year ( which roughly is aligned with the season) the basic forecast is for a cash flow requirement of £700k. Just to avoid any doubt, this already takes into account about £275k in “covid grants” received from the EFL.
The Trust must contribute its 10% ; in other words £ 70k of “new money”, to meeting that need for cash. We have already paid in £44k. This will help cover the Club’s needs until the end of March. By the way, the majority of that money is needed to pay for ground expenditure such as the media gantry, toilets, steelwork, fireproofing, pitch lights etc etc. Running costs, such as wages, represent a smaller proportion of cash needs. The club runs a very tight ship in terms of its day to day operations, with staffing levels well below those of other clubs.
Around March the figure for this year’s cash requirements can be firmed up. That depends on factors such as the status of covid spectator restrictions and any investment in players to stay in the EFL. The aim is still to keep the need for funding to within a total of £ 700k. On that basis, the Trust would need to chip in a further £ 26k some time between March and June. It will also mean that, all together, the owners will have injected over £2million into the Club in about three years.
The good news is that, thanks to all the efforts of members and other supporters, in particular through the 1901 Club and Russ’ Raffle, the Trust expects to be able to pay its contribution of £ 70k from its existing reserves and regular fundraising activities in the next few months. We are not planning to go back to the members this season with a “ Play Your Part 3 “ share contribution scheme. Even so, we will need to continue our fundraising efforts to rebuild our cash reserves and to be in a position to help meet the Club’s future needs.
Those future needs are uncertain. In football every year is different and brings its own uncertainties and challenges. In the case of Barrow AFC, these include the course of the Covid pandemic and whether we remain in the EFL. If we do not, then the Club’s budget and finances will have to be substantially recalibrated. Assuming that we do stay in League 2, which is the outcome everyone is working their socks off to bring about, then the Club would aim to at least halve the losses for the 2021/22 season. That’s an ambitious target, but we must bring those losses down to a level which is manageable for all the owners long-term.
That includes from the perspective of the Trust and our members. Looking at the support and generosity of members and other supporters over the past year, we think we might be able to meet our share of losses in the region of, say, £ 350k ( i.e. £35k) from regular fundraising activities without the need to undertake a third formal share contribution scheme.
We’ll aim, if we can, to report further on this after March as the financial position for this year becomes more certain.
We would like to extend our thanks to Mark Hetherington for all he did.
The Bluebirds Trust would like to put on record our thanks to Mark Hetherington for his incredible contribution to the history of Barrow AFC.
Mark will be forever remembered as a driving force in our achievement of ‘the impossible dream.
His knowledge, passion and effort were second to none. We wish Mark all the very best in the future and look forward to seeing him down at Holker Street, enjoying the fruits of his labours.