Several people have been in touch asking how I can state that Sevco defrauded the Rangers Charity Foundation out of £275,000 from the recent Legends game against Manchester United when I have not allowed for any costs.
As I have made clear on a number of occasions, I do not have accurate figures (despite requesting these from Sevco’s Andrew Dickson) and have called for an independent audit of the match to establish the true figures. I have also made clear int he past that I am not averse to Sevco making a reasonable charge to the charity to recover costs legitimately incurred (although I would also expect a fair amount of in-kind donation).
Nevertheless, I have reviewed income and costs based upon the Duff & Phelps Interim Report to Creditors (10 July 2012) and upon figures released by Rangers Football Club and Sevco.
Income
Last year’s AC Milan Glorie match saw a crowd of 47,000 turn up, generating an income of £450,000. That’s an average of £9.57 per head (tickets actually cost £12 for adults and £6 for concessions).
This year’s Legends game against Manchester United attracted a crowd of 23,177.
We do not have an income figure for this game, however, based upon the ticket prices (£17 adults, £5 kids, £13 concessions and £40 families) and the average price achieved against AC Milan, I do not think it would be wildly inaccurate to put the average income per head at £13.
That gives us a ticket sales income of £301,301. Given that the average price achieved against AC Milan was nearer to the full adult price, it is more likely that my estimation of £13 per head is an underestimation if anything.
On top of that I only allowed for a further £50,000 in sponsorship and hospitality income as well as funds raised from the gala dinner (to be fair; it is unclear if the latter was run by the club or the Foundation or someone else although, given the resources available to the Foundation, I would be surprised if they organised this).
Following prompting, I decided to review the hospitality income (it would be impossible to look at sponsorship without further details from Sevco or the Foundation).
The Duff & Phelps interim report covers the period 14 February 2012 – 29 June 2012 which included 6 home matches (Kilmarnock, Hearts, Celtic, St Mirren, Dundee United, Motherwell) and shows income from Hospitality Sales as £267,728 and income from Food & Beverage as £388,973.
That’s a total income of £656,701 spread over 6 games, ie. an average of £109,450. In those heady days, of course, Ibrox regularly saw crowds of 47,000 whereas the MUFC Legends game only drew a crowd of 23,177. On that basis, I have halved the potential hospitality & catering income for the MUFC game to £54,725.
So, in summary, we have allowed for:
Ticket Sales – £301,301
Hospitality, Food & Beverage Sales – £54,725
Sub-total = £356,026
We have not allowed any income for sponsorship or the gala dinner nor have I allowed for sundry items such as the souvenir programme which sold for £5 or any merchandise sales.
This is an assumption (as I do not have the benefit of a list of attendees or programme) but I would have anticipated that at least 200 people would have attended the dinner, raising a further £20,000 in sales. If there had been a raffle and/or auction, then I would have been disappointed not to bring total income from the dinner to at least £75,000. But, as I say, this may have been organised separately and therefore I have not included it in my calculations.
Expenditure
According to Duff & Phelps (and who would doubt their word, eh?) direct match days costs during Administration were £102,609. That’s £17,101 per match.
On top of that there would be additional costs such as policing and security. Duff & Phelps set these out at £515,157 but this includes a home match against Celtic for which the taxpayer-funded Strathclyde Police (as was) charged a rather hefty amount. In any case, I would have thought that security and policing for a charity game would have been much, much more low-key and would allow for £15,000 (as I recall this is roughly the amount paid by clubs outwith Celtic and Rangers for a regular match).
So that’s a grand total so far of £32,101 to which one might add an allowance for marketing costs, etc. Bearing in mind that the match was raising £75,000 for charity and based upon the 10% principle which is applied across the sector and is, indeed, enshrined in good practice, that would allow a further £7,500 in administration and marketing costs.
On top of this, we should allow for the costs of food & beverage. Without having access to contracts, I am advised by industry figures to allow a margin of at least 65% which means food & beverage costs would be £54,725 x 0.35 = £19,153.
So, in summary, we have allowed for:
Match day costs – £17,101
Policing & Security – £15,000
Marketing & administration – £7,500
Food & Beverage costs – £19,153
Sub-total = £58,754
At this point in my review, I stopped. Because I suddenly noticed a separate line in the Duff & Phelps report: “Charity Match Costs – £153,512” which I had never spotted before. Taking that at its face value that gives us concrete evidence that Rangers Football Club (In Administration) made a profit of £126,488 from the AC Milan Glorie match. In other words, not only did the Administrators cover their costs but they managed to purloin – after costs – the largest “donation” for themselves from a “charity” football match.
Now, I don’t care if you are Sevconian, Dundonian, Aberdonian or a Celtic fan; that is just plain wrong and an abuse of charity. I wonder what Lord Hodge’s view is of official administrators behaving in such a fashion?
Getting back to the subject at hand, this creates a problem because I cannot reconcile in any way, shape or form that “charity match costs” figure of £153,512 with the costs listed elsewhere in the Duff & Phelps report. If direct match day costs are £17,101 how do they arrive at match day costs for a charity game of £153,512 even allowing for things such as security, policing, etc?
Some people have mentioned VAT (let’s ignore the irony of Sevconians demanding that VAT is accounted for) completely ignoring my earlier point that, as a charity event, this could easily have been structured so as to avoid VAT.
Surplus/Profit
Bear in mind that we have made no allowance of the gala dinner or sponsorship income which should add considerably to income. Nor have we made allowance for any merchandise sales. Nor have we made any allowance for any costs which might have been paid for by Sevco as a corporate or in-kind donation (I can find absolutely no evidence whatsoever that they have donated a single penny themselves towards the match).
So we have a realistically estimated minimum income of £356,026 against an expenditure of £58,754 at the lower end and an expenditure of £153,512 at the upper end. Either way, Sevco have covered their costs leaving a surplus of either £297,272 or £202,514 less, in both cases, the £75,000 that was allocated to charity.
Best case scenario: Sevco have only purloined £127,514.
Worst case scenario: Sevco have purloined £222,272
That’s profit to you and me. It is wrong, indefensible and a disgrace. FACT!
alzipratu 