Town facing £10m black hole due to coronavirus pandemic
PUBLISHED: 06:00 04 July 2020 | UPDATED: 10:25 04 July 2020
The coronavirus crisis could cost Ipswich Town as much as £10million as football continues to be hit hard by the global pandemic.
The Blues have not played a game since March 7 due to the virus, with the League One season ended early last month and still no certainty over when the 2020/21 campaign will begin.
That meant the final five home games of Town’s season were cancelled, with the Blues having already offered refunds on the 2,500 individual tickets bought for those matches and news on season ticket refunds expected early next week.
A range of refund or credit options are likely to be offered but, should all supporters ask for their money back, that would cost the club north of £800,000.
Close to £1million in matchday revenue – including ticket sales, merchandise, hospitality, concessions and sponsorships – has already been lost due to the cancellation of those five home games.
But by far the biggest threat of loss relates to season tickets for the 2020/21 campaign.
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Close to 9,000 supporters have renewed their seats for next season despite not knowing when play will begin or if they will be allowed in the stadium to watch, representing a drop of 3,000 from last season’s total of 12,000 season ticket holders. The drop equates to a £1million revenue decrease for the club.
In a worst-case scenario, in which the entire 2020/21 season is played behind-closed-doors, Ipswich would be in a position where they would need to refund supporters to the tune of £3million, while also losing close to £4million in matchday income from tickets, hospitality, sponsorship, advertising and concourse takings. Matchday income from the club’s Planet Blue shop totals around £250,000 over the course of a season.
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Those losses could be mitigated in part if reduced capacities are allowed to return, as has been suggested for September, but, even with a phased return, not being able to operate at full capacity will hit the club financially given the costs of staging games at Portman Road.
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Away from games the club are understood to be expecting losses of £600,000 in terms of commercial revenue, usually brought in from the hiring of the Portman Road executive suites and bars, as well as the fieldturf.
The club had also planned on hosting a fanzone on the fieldturf at Portman Road during Euro 2020, following the success of the events held around the 2018 World Cup, with the cancellation denying the club another potential income stream.
There is also expected to be a deficit in sponsorship and advertising which would usually come from the EFL, though the size of those losses are not yet known.
The newly relaunched ITFC Community Trust is also expecting losses in the region of £100,000 which, though a stand alone charity, is also likely to impact the club itself.
Some money has been saved given the majority of the club’s off-field staff have been placed on the government’s furlough scheme, which covers 80% of employees’ wages, with owner Marcus Evans topping up wages to ensure all staff receive a full monthly salary.
While the pandemic has had and will continue to have a major impact on the club, the Blues are thought to be in a better situation than the majority of those in League One, given it is understood Evans will continue to cover the club’s losses.
The Town owner’s global conferencing and hospitality businesses are likely to have been severely impacted by the pandemic but, again, he is understood to be better equipped than most given he does not rely on large bank loans.
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