It’s the £4 million question: why are we launching a brand-new 25-year season ticket – and why is it vital that it succeeds?
Yes, there are wonderfully emotional reasons for buying a ticket that lasts a quarter of a century. But there are also deep and profound financial reasons why this initiative must work. As owners of our club, you have the right to know what these are.
The DTB will be shortly releasing a financial update drafted by the finance committee, which will seek to update fans on the club’s finances. In advance of that, we would like fans to understand the main challenges, which are:
- The external debt
- The impact of COVID
These two elements are the reason why the finance committee has recommended to the club and DTB that we should offer a 25-year season ticket.
There is no doubt we are back at Plough Lane because you dug deep and helped raise the funds we needed to build our new £33 million stadium. The Plough Lane Bond and Seedrs crowdfunding campaign were inspirational successes, and vital revenue also came from the sale of Kingsmeadow.
As you’ll remember, we still needed to take a £4.1m bridging loan from external lender MSP Capital to guarantee our new stadium would be completed.
In a nutshell, that loan is the reason why we’ve now launched the 25-year season ticket.
“The bridging loan is secured against Plough Lane and we have to pay it back by next April,” explained Chair of the Dons Trust finance committee, David Rey.
“The 25-year season tickets are the best potential route to refinancing a very expensive loan - without jeopardising the ownership of the club and the stadium. Quite frankly, they are the best option to us right now.
"If the scheme is a success, it would give the club a solid financial foundation upon which to build for the future at Plough Lane.”
Some of you will understandably be asking why this is being raised now with a sense of urgency. We simply want to address the external loan well in advance of it becoming due and the time is right now because of the season ticket window opening.
The non-refundable season tickets and debentures bought by loyal supporters last year helped mitigate the fact that we had no match-day revenues all season long. But even then, we ended the campaign with an estimated cash loss of £1million – far better than we had feared. But it’s still a loss and there is no way of papering that over.
It’s not all doom and gloom, though. David continued: “The club has a business plan centred around maximising revenue from Plough Lane whereby we will aim to at least break even in 2021/22 and then be in profit.
“This, of course, assumes that we aren’t affected by Covid again, we retain our position in League One and most importantly, we successfully manage the loan.”
To break even - and then to mention the ‘profit’ word so soon after building our new stadium - would be an outstanding achievement. We can get there...if those fans that can buy our 25-year season tickets. 200 sales would let us repay a substantial part of the loan and 500 would be an incredible result, allowing us to repay it in full.
Below is everything you need to know about the initiative and why the 25-year season ticket is not only an outstanding investment for you as a loyal fan - but for the club you support and own:
How can I buy a 25-year season ticket?
The tickets will go on sale tomorrow, May 12th, at the same time as regular season tickets, and you will find them on our online ticketing system.
If you need additional help or have questions about buying a 25-year season ticket please email firstname.lastname@example.org or call 020 3988 7863.
Ticket office will be open Monday-Friday 10am-4pm.
For those of us who can’t afford 25-year season tickets, will there be an opportunity to buy 5-year or 10-year season tickets at a later date?
No. It is better for the club’s finances to sell a smaller number of 25-year season tickets than a larger number of 5-year or 10-year season tickets. We will raise more money and be much better off in our budgeting for next year and the following years.
For example, in order to pay off the loan with 5-year season tickets, we would need to sell 5 times as many – nearly 2,500. This would have a disastrous impact on next year’s budget.
Can I use credit from my 5-year season ticket towards a 25-year season ticket?
Why are there no concession price options available?
We think that holding ticket prices unchanged for 25 years is a very good deal for fans of all ages. And you will be helping the club repay an expensive debt that is secured on the stadium.
The 25-year season ticket can be transferred or left in your will and it isn’t possible to offer concession pricing for this. It would also dilute the funding that the tickets could raise towards repaying the external debt.
Could I transfer money from my Plough Lane Bond to buy a 25-year season ticket?
No. The bond money was raised to fund the stadium construction and is a separate financial instrument. The 25-year season ticket proceeds will be used to repay the bridging loan.
How will the price be calculated?
25 x the full adult season ticket price for your seat, less a 5% discount if you are a debenture holder.
Why does the club need this much money up front now?
To repay the external bridging loan that was taken out to complete the construction of Plough Lane. This loan is secured on the stadium and is expensive for the club, and we knew when borrowing the money that it was a short-term solution that would have to be refinanced.
How can I pay? Will direct debit or a longer payment period be available?
As the primary goal is to manage the club’s external debt, we do need payments up front.
What happens if we don’t sell 500 tickets
500 tickets would be a fantastic result for the club and would allow full repayment of the external loan.
But even 200 25-year season ticket sales will be very useful in managing the club’s external debt.
Will you use all of the LTST money to repay the external loan?
The club does need some flexibility and buffer in how it manages its cashflow over the next season, but yes, money raised from this will predominantly go to repaying the external loan.
Will you take loans out going forward?
We will look at all sources of finance to fund the activities of the club, especially where these provide a return to the club and make it stronger in the long term. We will consider the costs of loans in the context of the Club’s objectives and the use of the funds.
Can I pass the tickets on to others?
Yes, your 25-year season ticket can be passed on in your will or transferred to somebody else that you nominate if you are unable to come to games. The club will honour this for the term of the ticket.
I can’t afford one now but can I buy one next year if I am in a better financial position?
No, the club needs the money now to repay the external debt, and so we need people to purchase these tickets for the coming season.
Once we have spent the money this campaign generates, won’t that leave us short every year for the next quarter of a century?
It does mean we will have lower season ticket revenue, but we have modelled this and this is a lower cost for the club than paying interest on a loan, as well as providing better security and flexibility for financial planning.