Dundee United chief executive Luigi Capuano has estimated that relegation to the Championship will cost the Tangerines up to £4 million in lost revenue.
The Tannadice chief has been candid in his assessment of the financial challenges ahead, noting that the £300,000 parachute payment is a comparative drop in the ocean.
Fixtures against Dundee, Celtic and Rangers would have been guaranteed money-spinners, while securing sponsorship and hospitality income becomes a more challenging proposition in the second tier.
As such, United have slashed their wage bill, with the likes of Steven Fletcher, captain Ryan Edwards and Dylan Levitt (pictured below) among an exodus of senior players.
That has afforded “breathing space”, according to Capuano, as they recalibrate for the realities of life in the Championship.
Chapping on the door
While confident the club are on the road to sustainability — United’s main creditor is owner Mark Ogren so there is no existential threat — Capuano has sought to be transparent regarding the cost of last season’s failure.
“The parachute payment is £300,000,” he told Courier Sport. “If you take that and put it beside the drop in revenue, which is going to be between £3 million and £4 million, then it just doesn’t equate.
“We’ve had to make difficult decisions across the club to make sure — for this season AND beyond — this club is in a sustainable position. Mark (Ogren) was very clear that the club had to be self-sustainable.
“I know the supporters have seen players leave and some may be unhappy at seeing their favourites move on. There were many different factors as to why that happened, including players chapping on the door wanting to play at a higher level.
“But, being honest, a lot of these players leaving does help the club financially and creates a bit of breathing space in the wage bill, which was that of a Premiership club.”
Support
Impressive season ticket sales of 5,100 have also provided a welcome boost, with the Arabs backing their side in numbers despite the trials and travails of last season.
“Am I surprised by that? No,” continued Capuano. “In the last two years at this football club, I’ve come to understand what our supporters are like.
“Throughout last season there were plenty of opportunities for fans to say, “you know what, I can’t do this any more”.
“Even at the very end — look at the reaction of our fans after the team had just been relegated at Fir Park. They were there in good numbers and applauded the players. That shows what this fanbase is about.
“And when you are part of a club like this, the last thing you want to be part of a failure. That’s what it (last season) was: we failed. That really hurt.”
Budget
When United launched their 2023/24 season ticket push, a 10% rebate was included in the event of relegation, redeemable across the club in the form of a voucher.
While cognisant of the scale of the request, Capuano is hopeful some fans will choose to “donate” that rebate — drawing parallels with the 2020/21 campaign, which saw many fans pay for season tickets despite the enforced lockout.
“If I think back to season 20/21 when supporters donated their season ticket money to help us through Covid, I’m not sure it’s been fully appreciated just how big that was,” said Capuano.
“The financial situation was very difficult and for our fans to keep their money in the club was huge. To an extent, we are in that position again.
“The fans will be given the opportunity to donate the rebate — and I know that is a big ask, given what happened last season.”
He added: “When we were piecing together a playing budget, we factored in that rebate because “Amount X” was going to come out of that budget. Ultimately, it will have an effect on the playing squad and what we can bring in.”
To the bone
Ogren will inevitably be forced to plug gaps on occasion, but Capuano notes, “the biggest expense for any squad is the players. That needs to be addressed, which has happened to an extent.”
And the Tangerines are determined to retain a Premiership level structure if they do return to the top-flight.
“Mark has used the phrase “we won’t cut things to the bone” because that just presents other challenges down the line,” added Capuano.
“We are making sensible decisions in terms of expenditure across the club to manage things, while staying at a level that — in 10 months time — if we are promoted, means we just need to build in a couple of areas to be a Premiership club again.”
