Dave Cormack

Aberdeen Announce Wage Cuts To Plug COVID-19 Funding Gap

Aberdeen have announced wage cuts in order to help plug a £10m shortfall due to the coronavirus pandemic.

The Club have agreed pay cuts averaging 20% for those earning more than £30,000 a year, which will raise a further £1m towards the funding gap as a result of the drop in income due to the impact on football as a result of the coronavirus pandemic.

This will contribute towards further measures that have been undertaken by the Club including:

  • £2million of a cash injection from AFC investors
  • £2million of savings from the Government job retention scheme and rates relief, as well as operational cost-cutting;
  • £1million from higher than expected season ticket and AberDNA membership sales;
  • £200,000 from less than expected 2019/20 season ticket and seasonal hospitality refunds;

Aberdeen Chairman, Dave Cormack said: “I’m humbled by the response of our hard‐working and dedicated executives, management, players and staff who have accepted these cuts and the reasons for them. They’ve demonstrated a willingness to do what needs to be done to help secure the Club’s future. As a result of our higher earners sharing in the financial pain inflicted by the coronavirus crisis, we’re able to safeguard jobs and protect the incomes of those on a lower wage.”

In recent weeks, there has been progress on several fronts which provided more clarity and a degree of certainty over the new season starting and real hope that we will see limited crowds in stadiums in the not too distant future.

With the full fixture list and schedule for league and cup games, including Europa League qualifiers, being issued, together with Sky agreeing we can include virtual RedTV access to all home games for season ticket holders, it has allowed the Club to better predict its cashflow needs.

“It was clear that our situation was becoming unsustainable,” explained Cormack. “These cuts help to further reduce our running costs to a more sustainable level against what income we can continue to generate through season ticket sales, AberDNA Memberships and broadcast revenues. We have made significant strides getting the gap down to under £4million.

“We’re not out of the woods, by any means, but everyone at the Club is buoyed by our supporters and corporate clients’ desire for us to work together to get through this. And I believe we will. Along with our goal of avoiding redundancies and looking after our lower paid staff, we must stay competitive as a team and continue our investment in our youth academy.

“Every first team squad player from last season is under contract for the 2020/21 season, putting a huge burden on our payroll, but it was something we planned 18 months ago to ensure continuity and consistency in the squad. We were investing in the future when the pandemic hit.

“The connection that AFC and the Community Trust have strengthened with our city region and our fans over the last four months has been heartening to see. The investment in our community and fan engagement programmes, including an expanded call‐centre team proactively reaching out to our community and responding directly to fans, is being positively received.”

Cormack added: “We’ve invested in a strong squad and have some exciting young players on the verge of breaking into the first team.

“Derek and everyone at the Club is excited for the new season to begin. Remember, we’re still in the semi‐final of the 2019/20 Scottish Cup, and the Europa League starts next month too.

“With over 7,500 season tickets sold and AberDNA memberships at 6,250, we still have a way to go, but it’s absolutely achievable. I’m encouraged by the fact that 15% of 20/21 season ticket holders are new. The Red Shed is almost 70% full, with new season ticket holders accounting for 40% of those.

“We remain hopeful of getting partial crowds back to Pittodrie sooner rather than later. Since we announced that one metre social distancing would allow 7,500 season ticket holders into Pittodrie, our ticket office and stadium planning team have now assessed that we could accommodate 9,000 season ticket holders based on the number of families that would be able to sit together.

“It is highly unlikely that we will go straight from limited crowds to full stadiums. We expect any limited crowd increase to be in increments and as such for season 20/21 there is a real possibility we will not be able to welcome walk‐up or away fans, so the only way to see a game could be as a season ticket holder.

“We hope this isn’t the case as we continue to work behind the scenes to maximise capacity and our commitment remains to provide full value for our 20/21 season ticket holders.

“Our promise is to continue our transparency and two‐way communication with our fans.”