The bulldozers have been poised and ready for 20 years. When they finally get the…
Tuesday marked a momentous day for Aberdeen when the club were officially granted planning permission by the city council for their new stadium. Work will now begin on the new 20,000-seater Kingsford Stadium and accompanying training facility in June which will cost the club around £50 million.
To say this new stadium will be a boost to the northeast club is something of an understatement. As we noted in our mini-documentary about the limitations of the club’s historical Pittodrie home, Aberdeen’s future undoubtedly lies somewhere else where they can grow into a larger club and finally fulfil their potential.
Yet the new Kingsford Stadium and the training complex that comes up with it won’t be a stepladder for Aberdeen to catch Rangers or even Celtic’s financial gains. Instead, this new future for the club should help battle the very real threat to Derek McInnes’ side and their spot in the Scottish football hierarchy: Hearts and Hibernian.
The number one priority of any football club is to make money. It should be winning games of football but by and large, a football club that is run properly and makes enough money tends to then do quite well on the pitch too. While, on the other hand, very few clubs have played well enough to make up for losses off the pitch.
In this regard, Aberdeen are in a superb position. According to their last financial results from 2017, the Pittodrie side are currently bringing in £15.2 million in revenue each year. A figure that not only offers a healthy increase on 2016’s £13.4 million but also completely outweighs the £11.2 million and £7.7 million Hearts and Hibs respectively made in 2017.
So Aberdeen are making twice as much as Hibs and about one third more than Hearts. What’s the problem? Well, while the Dons may be ahead of both Edinburgh clubs at the moment, there’s plenty of reason to believe competition between the three clubs may get far tighter in the coming years.
If we go back to 2013 we’d find that it was, in fact, Hibs that made more money out of the three clubs with a turnover of £8 million a year, while Aberdeen and Hearts were right behind with turnovers of £7.85 million and £7.3 million respectively.
This proves to be a rather vital moment in all three clubs’ timelines. Hibs and Hearts were relegated through different circumstances in 2014, while Aberdeen were slowly but surely coming to the realisation that they had struck gold with the recent appointment of McInnes. As such, Aberdeen’s revenue went one way while both Hearts and Hibs’ declined whilst in the Championship.
As the graph above shows, Aberdeen’s revenue blossomed as the club began picking up regular spots at the top of the Scottish Premiership, while Hearts and Hibs were notably hamstrung by playing in the second tier. Yet that has quickly changed in recent years.
In their first season in the Premiership Hearts’ revenue bounced up from £7 million to £9.9 million and then on to £11.2 million. Furthermore, with additional revenue streams aplenty due to the club’s new Tynecastle stand we can expect turnover to only increase over the next few years too.
Similarly, we anticipate what Hibs’ first full season in the Premiership and a potential finish within the top four could do for Neil Lennon and his club. While a turnover of £7.7 million may not be causing too many around the Pittodrie boardroom to sweat just yet, Milne & Co. will be well aware of just how quickly Hearts have expanded since their return to the top flight and how eager Leann Dempster is to follow suit at Easter Road.
If Hearts and Hibs’ increasing revenue doesn’t point out just how much Aberdeen should be looking over their shoulder then a quick look at the wage bills of each club certainly should.
While Aberdeen may currently be making twice as much money as Hibs they certainly aren’t paying twice as much in wages, with their wage bill of £7.7 million certainly standing tall compared to £4.5 million at Easter Road but not by a particularly huge margin.
Similarly, despite making £3 million less last season, Hearts managed to make up the differences elsewhere and spent £5.88 million on their staffing costs. A mere £900,000 less than what McInnes currently has to play with.
When we take a step back and once again look at the financial health of all three clubs since 2013 we can once again see just how close both Edinburgh clubs were to Aberdeen’s own financial capacity before they were relegated.
While Hibs were still lagging with a wage bill of £3.9 million in 2013, Hearts were actually prepared to pay more towards their playing budget than the Pittodrie side. At this point one should expect to hear the administration jokes – which aren’t entirely unfair – but when coupled with the revenue graph from before it’s not hard to see that Hearts certainly have the capacity to match Aberdeen’s financial muscle.
Indeed, as the graph above highlights, Aberdeen clearly felt an obligation to invest more in their squad upon the return of Hearts (and Rangers) and will most likely have increased it once more this season with Hibs back in the top flight. Yet as we can see from the current Premiership table there’s still very little in it.
Sure, Hearts may end up finishing sixth and being forced to rebuild their squad this summer, but a Tynecastle outfit that is watching its revenue and therefore its wage bill shoot up every season is a serious threat to Aberdeen. Even if Levein is in charge. And while Hibs may still be lagging behind it’s clear that any team guided by Lennon will always be a threat to Aberdeen’s hopes of finishing second or third each season.
This all brings us back to the here and now. The new Kingsford Stadium won’t be designed to cram as many fans in as possible – in fact, it’ll be smaller than Pittodrie – but like Celtic Park, Ibrox and most likely Tynecastle next season, Aberdeen’s new home will be a purpose-built cash machine that can allow the club to expand their revenue streams to keep ahead of their rivals.
Last season Celtic made £90.6 million but only £37.5 million of that came from gate receipts. And while the Glasgow club enjoy a level of Champions League TV money and merchandising that Aberdeen could never achieve, they also made £36.5 million from “multimedia and other commercial activities” – that means corporate boxes, live events at the stadium and a whole host of add-ons to the “matchday experience” that Aberdeen could and should emulate.
The new training facility will also be a huge step up from what Aberdeen have right now: absolutely nothing. Although it may be harder to quantify than revenue streams or points on the league table, there’s no doubt that the club will find it much easier to attract players to the northeast with state-of-the-art training pitches and gyms. And the young players that will benefit from the improved facilities will surely bolster Aberdeen’s first team options in the future. Although, whether McInnes would be willing to give them a shot is another matter entirely.
Aberdeen aren’t throwing caution to the wind to try and keep up with Celtic or Rangers. It would be foolish for them to do so, but with the Kingsford Stadium now on track the club finally have a means to expand their revenue, continue to grow in size and scope and most importantly keep a healthy distance between themselves and the ambitious duo in Edinburgh.