I can’t believe it’s not a Big Buttery Audit Vat

25/07/2014

ITFC Academy

 

by Gavin Barber

Lots of people ask for money. Most of us – me included – conduct a kind of instantaneous, subconscious cost/benefit analysis of each request before giving a response. Context is important. Earlier today I was asked for a charitable donation and gave the full amount, without hesitation. The charity was a random teenager who was 10p short of his bus fare. I paid in full because a) I could afford it, and b) it would mean that he could end his long-running argument with the driver, meaning that I could finally get off the sweltering pavement, onto the bus, and on with the rest of my life. Philanthropy and self-interest, perfectly married in a moment.

Rightly or wrongly, if you’re prepared to ask people for money then you need to be ready to make them feel that they’re Doing Something Good or Getting Something Back, or, preferably, both. Which is why the decision to ask supporters for cash to fund ITFC’s bid for Category One Academy status was such a bold one. And, on the basis of today’s announcement that the bid has failed, a potentially ill-advised one too.

We are told that the bid for Category One status has failed to reach the required 75% standard by just 0.3%. Who knows what complex algorithms lie behind this outcome? “IF facilities.PITCH >64% AND coaching.YOUTHDEV >72% THEN value academy.LEVEL must = 01”. That sort of thing. Maybe. Myriad factors, we are told, are considered. Investment. Coaching. Facilities. It all gets churned into a big buttery Audit Vat, and for ITFC it apparently comes out at 74.7% proof.

One could speculate on the maturity of a process which allows for such fine margins of error in an area of such inexact science; one could speculate further on how the application of the audit process might vary between clubs of different levels and status – particularly given that this whole thing was begat by the Elite Player Performance Plan (EPPP), itself yet another downwards kick from the jackboot of the super-rich clubs into the faces of the rest.

And yet. You can only play the hand you’re dealt, and ITFC’s response to these challenges was, firstly, to opt rather defiantly for Category Two – like a spurned suitor petulantly de-friending the object of their affections on Facebook – only to decide that, actually, we did want to play with the big boys after all. But we needed someone else to pay for it.

That initial decision was important. ITFC weighed up the options available under EPPP and decided that Category Two was the least-worst of them. Or perhaps that Category One was not worth the risk. Not only was there a 5,000-strong petition raised in protest, but statistics provided by the Ipswich Town Supporters’ Trust proved that investment in Academies was more than likely to repay itself several times over in revenue from player sales, and transfer fee costs saved. Category Two, however, remained the preferred option at that time. It was a decision that now appears to have been costly, both in footballing and financial terms. Perhaps one that Marcus Evans now regrets.

And yet. When Town did decide to pursue Category One status – and let’s go right out on a limb here and suggest that the potentially beneficial effects of Category One on the overall balance sheet may have helped to prompt Marcus’s change of heart – it was the supporters who were asked to foot the bill. Not just a few quid for some fluorescent cones and training tops, but a sizeable chunk of the overall funding required for Category One.

Ipswich Town FC is part of the Marcus Evans Group, a multinational conglomeration of Stuff which employs squillions of people to make gazillions of dollars. It is not, perhaps, the most obvious cause when it comes to charitable giving, yet several supporters decided that it was worthy of donations. In issuing that appeal, ITFC sent out two distinct messages: firstly, that a Category One academy was a nice-to-have rather than a must-have, and supporters should therefore be expected to contribute to it. And secondly, if it was an enterprise inextricably attached to a cause, rather than a business decision about allocation of resources – as would presumably be the case in every other division of MEG – then supporters could arguably be seen to carry an implicit level of blame in any subsequent failure to achieve the desired outcome.

Like I said earlier, you can ask people for money any old time you want, but there’s an implied contract in any request for funding, particularly for a private organisation with an already-significant cashflow. And here we come back, rather cynically perhaps, to our two tests for charitable giving: am I Doing Something Good and will I Get Something Back?

The answer to those questions would both have been ‘yes’ if ITFC had found an extra 0.3% from somewhere. But we didn’t. We failed on the margins. And yet – as frustrating as it is to apparently miss out by such a tiny amount – it is always the case that, like a first serve in tennis, if you aim for the margins, you risk hitting the wrong side of them.

It’s easy, of course, to point the focus of attention towards those who carried out the audit. EPPP is a disastrously ill-thought-out initiative, so there’s no reason not to assume that the processes which underpin its implementation might also benefit from some improvement. But however flawed the process might be, the story to take from today’s announcement is surely not the fact that ITFC missed out on Category One by 0.3%, but that we put ourselves in a position whereby that might ever have become an issue. Why aim for the margins? Why look at the criteria and the processes, and decide that scraping around for 75% is the best approach to take – rather than determining to invest whatever is necessary to reach Category One, from the start? Why opt for Category Two, then spend time and effort recruiting a team capable of delivering Cat One, two years later?

These are business decisions and it’s not for me to say which is the right one and which is the wrong one. But as a supporter, it is for me to say something about asking fans to subsidise the shortfall left by some of those business decisions. And that is this: if you are going to ask fans for money to provide a Category One Academy, over and above the investment that fans already make via season tickets etc., and in the full understanding that Category One brings financial benefits to the club and its owner as well as sporting benefits to the team and its supporters, then you had better make damn sure you get it right. We are told that financial investment is only one of the criteria used to determine Academy status. In that case, if fans have contributed to the financial side of things, then it is down to the club to make sure that everything else is in order, to the extent where a margin of 0.3% in an audit score shouldn’t ever have become an issue.

Having put supporters in an arguably invidious position by asking for contributions in the first place, only to let them down by failing to deliver the aim that they were being asked to contribute to achieving, the Club and its owner once again have questions to answer. What will happen to those contributions? Why, with supporters’ contributions behind them, does it appear to be the case that ITFC aimed for being ‘just good enough’ to achieve Category One – and turned out to be not quite up to it – rather than reducing the risk by aiming higher than that? What happens next? Will there be a new approach or will supporters be asked for yet more money? As ever, we eagerly anticipate answers.

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Fair Play at the ITFC Academy?

01/08/2013

MINOLTA DIGITAL CAMERA

The Turnstile Blues’ view of recent developments at the ITFC Academy and how supporters helped change the club’s mind by Gavin Barber

Funny how things change. It wasn’t much more than a year ago – March 2012 to be precise – when Town announced that, despite pressure from supporters, the Club’s Academy would be aiming for Category Two status in the brave new world of the Elite Player Performance Programme. A 5,000-signature petition from the Supporters’ Trust was dismissed as the idealism of people who didn’t understand the intricacies of the system: to pursue Category One status, we were told at the time, would risk returning the club to administration.

Turns out that we, the fans, were right after all. This week Town have launched the Academy Association, a new initiative designed to raise the standards of the Academy to reach Category One. In the publicity surrounding the launch, Simon Milton even made specific mention of the Trust’s petition as he urged supporters to back the fundraising drive associated with the initiative.

For Ipswich Town to be pursuing Category One status for its Academy is in all ways A Good Thing. All of the things that supporters said at the time of the original deliberation – that it’s the best investment to make in the long-term future of the club, and that it’s at the heart of what ITFC is about – are now part of the club’s own pronouncements.

It’s also A Good Thing because, just maybe, it signifies that the club is starting to respect the views and wisdom of its supporters, and that’s testament to the determination of those supporters in continuing to ask questions, and to knock at what previously seemed to be a firmly-locked door.

So it’s an opportune moment to recognise this new-found spirit of what appears to be a more honest dialogue with supporters, and ask some more questions.

Firstly, whilst we all applaud increased investment in the Academy, it’s not immediately obvious why supporters are being asked to stump up one-third of the cost of upgrading, and the ongoing running costs. It seems that Marcus Evans has – very wisely though not before time – decided that money spent on the Academy is a better focus for his investment than chucking £18,000-per-week wage packets at underachieving “professionals”. Financial Fair Play places no limit on the amount of money that can be invested in Academies, so at a time when ticket prices are being increased and cutbacks made which affect the quality of customer service that the club provides to supporters, and at a time when many supporters are struggling to meet the cost of the investments that they already make in the club through season tickets, it’s not clear why fans are being asked to provide an additional subsidy.

It’s worth bearing in mind that the business case which the Supporters Trust put forward for pursuing a Category One Academy in the first place, noted that over 10 years the club had made over £35m in transfer fees from the sales of Academy graduates. Should ITFC’s Category One Academy produce the next Gareth Bale, who gets sold for £90m, it’ll be ITFC’s primary creditor – that’d be Marcus Evans then – who’ll benefit financially: another reason why the “you wanted it, now you need to pay for it” approach sits uncomfortably with some. An alternative idea, for which my fellow Turnstile Blues contributor Alistair Rattray takes the credit, would be to run Academy investment as a co-operative, whereby supporters who contribute get a return on their investment when Academy products are sold on for big fees. Supporters could then choose whether to invest that back into the Academy or not.

Secondly, there’s a wider context which I find it impossible to ignore. As has been written about extensively on these pages and elsewhere, Ipswich Town is a club carrying massive debt, whose ownership structure, and in particular its relationship with other parts of the Marcus Evans Group, is distinctly unclear. I have enough internal struggles, frankly, in deciding whether or not to part with £400+ for a season ticket – but at least I know that I get something out of that, i.e. admission to home games. As mentioned above, it was only last year that ITFC were telling us that Category One status could risk putting the Club back into administration. That, plainly, was complete nonsense. I struggle with the idea of donating money to an organisation which so recently tried to scaremonger and deceive supporters about exactly the same entity as it’s now asking for financial help with. An acknowledgement of this, as the start of a genuinely open dialogue with supporters and genuine transparency about the running of the club, would be a more meaningful step towards regaining the trust of this potential investor – and really would be a sign that things have changed.