Does the SFA subsidise or profit from the SSC?

Written by Smithy on July 6th, 2009

With all the controversy surrounding “expenses” I thought I’d look at the financing behind the Scotland Supporters Club.  Are the Scottish Football Association subsidising the club or are they profiting from the club?  At the start of writing I have no idea what’s way it’s going to go.

 

What income does the SSC receive?

SSC membership runs on a 2 year basis spanning a qualifying campaign.  Membership is currently £20 per year, so £40 every 2 years. 

We know the SSC membership is capped at 32,500 people and it's currently full, so that means an income of £1.2 million every 2 years (32,500 x £40).

 

What expenses does the club have?

We’ll assume 6 home games and 4 away games per year.

SSC co-ordinator

We’ll assume the SSC need one full time member of staff @ 25k per year.  Including pension, NI etc we’ll estimate a fully loaded cost of £50k per year.  Assume this person has to work overtime on match days – 10 match days, 7 hours, at £15 per hour.  We’ll assume that this person isn’t required full time, so can help out at the SFA.  We’ll also assume that the SFA can assign other staff at busy times to the SSC.  This would be cost free.

Office

Although the office space is provided by the SFA at Hampden, we’ll assume it costs £400 to rent an office per month, or £4800 per year.  This cost includes electricity, rates, maintenance, heating etc.

IT costs - Assume one PC @ £500 per 2 years, one printer at £500 per 2 years – £500 per year.   We’ll assume they have three Servers – file, email and a database server at £1k each per month (including associated services) - £36,000.  General IT support - £200 per month.

Internet Access - Business Broadband connection @ £50 per month - £600 per year.

SSC Website - Shared with SFA and to standard design.  Again we’ll be generous and say £1,000 per month, £12k per year

Stationery - say £200 per month to cover photocopier, paper, pens etc – £2,400 per year

Telephone Costs - Probably quite expensive for the SSC, so we’ll assume £400 per month, or £4800 per year.

Membership renewal process

Membership is currently running from January 2007 – December 2009, and will run from January 2009 to December 2011. No mater when you join, the membership always runs out at the same time as everyone else.  This means the SSC only needs extra staff for a brief period of time once every 2 years.

The membership renewals normally take place in January and February at the start of the 2 year period.  32,500 applications to be sent out by a third party – say 50p each - £16,500. 

Say it takes 3 minutes to process an application when they’re returned to the SSC, one person could process about 140 applications a day, so it would take 232 man days to process all the applications.  If it’s assumed all the applications are processed in 2 months, this will need 6 members of staff dedicated to this process.  6 Temps at £10 per hour for 40 days would be £16,800.

We’ll assume they need an additional large office @ £600 per month, so another £1,200.  They’ll each need a PC and a printer – rented at £100 per month each.

Membership Packs

For the actual cards well be generous and assume they cost 50p each to make - £16,250.  We’ll assume the rest of the membership pack costs £4 each including P&P, to be packaged and sent out by a third party – so £130k in total

So the total for the membership renewals – £180,100 every 2 years

Ticket Applications for Home and away Games

Ticket Applications – as most of these are now sent out by email we’ll need to make some assumptions.  The leaflet might cost about £1,000 to design no mater if it’s emailed or posted.  We’ll assume half of the members receive the applications by email, half by post.  For the members receiving by email we’ll assume no additional costs.  16,250 Applications to be sent out by a third party – say 50p each - £8,125.

Ticket sales – Ticket sales are now run by Ticketline.  We’ll assume they charge a fee per ticket sold, which is already included in the ticket price. We’ll be generous and say they charge £5k per event to the SFA for the website etc. (Information on Tiketline pricing here)

Ticket Postage – this is an added extra on the price of a ticket so we’ll assume it doesn’t cost the SSC any extra.

So total per match - £10k, £100k per year

Away games

Each time the team plays away, the SSC send at least one member of staff.  They normally travel with the team on a chartered plain, travel in the team buses and stay in the team hotels.  Although the travel is probably cheaper, we’ll assume a total cost on average per trip of £1,500.  This would cover flights, transfers, hotels, taxi’s, food etc.  The SSC member of staff is normally only there for 2 or 3 days so this figure is very over estimated.  They normally stay in plush hotels though!

Total cost of SSC travel per year (4 away games per year) – £6,000

 

What’s not included

Corporate liability insurance, legal fees and audit fees are not included as I have no idea what they cost or if they’re required.

Because the maths is too complicated and rate of spend is to variable, we’ll exclude bank interest.  It could be worth over £50k per year though.

The SSC now has a large database of names and addresses that they can sell on.  It’s unknown how many members didn’t tick the “Do not contact me or pass on my details” so this won’t be included in the calculations.  It might be possible to “rent” this list to 3rd parties at about 10 pence per member’s details.  We know Football Football Ltd use this database to email (spam) members with offers from the Official Scotland Shop (a private company).  This could be worth £10k per year depending on how many times the information was sold.

 

 

Summary

In the first year the SSC running costs would be about £402,675 (profit of £247,235).  Second year costs (no membership renewal process) £221,175 (profit £428,825). Every 2 years the SSC brings in £1.2 million and has expenses of about £623,850. 

This means the SFA makes £676k profit on the SSC membership every 2 years.

Rather than make this profit they could reduce the membership fees to about £10 per year.  Alternatively the SSC membership could fall to 16,000 members and still not make a loss.

 

Conclusion

The SFA do make a substantial profit of £676k from the SSC.

At this stage it’s worth pointing out that in the last year before the SSC was launched, the membership level of the former Scotland Travel Club was about 15,000 members – this would relate to the minimum number of members to prevent the SSC running at a loss.

If you notice something I've missed, or disagree with my findings, please leave a comment below.
 
The Spreadsheet:-

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2. Time to renew your SSC membership The Scotland Supporters club have announced details of the membership...
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