The buzz around Home Park Last Friday was, understandably, all about the forthcoming Sunderland clash. But an event of greater long-term significance for Argyle occurred that afternoon with the launch of a new website and accompanying social media accounts under the ‘Home Park Stadium’ moniker.

This is obviously the first step in promoting the banqueting and conference facilities in the revamped Mayflower Stand, scheduled to open in the last quarter of 2019. Since the redevelopment plans have been well publicised this isn’t news in itself and, to any red-blooded football fan, it’s certainly not as exciting as a trip to the Stadium of Light.

But to those with an eye on Argyle’s long-term prospects it’s extremely significant as a reminder that financial sustainability is at the heart of the club’s philosophy. Given the current state of the game’s finances, this is only achievable by developing revenue streams beyond the cash generated by ticket sales and the central payments doled out by the EFL and EPL. Somewhat bafflingly though, some people still appear to believe that Argyle is a giant cash machine, secretly enriching the greedy owners. If only they would show some ‘ambition’ by spending these riches on new players, so the story goes, all would be well.

This isn’t the place to go over the whole argument about football club finances. But it’s worth revisiting the main myth, namely that since Argyle has one of the highest average gates in the league there must be boatloads of cash swilling around. As I wrote in a previous piece, Argyle’s gate receipts over a season are probably between £3.0 – £3.7m. When a squad on average League One wages costs in excess of £3m a season, there’s precious little surplus for any potential unscrupulous owner to siphon off.

Having said all that, as the manager helpfully reminds us on a regular basis, Argyle is certainly one of the lowest spending clubs in the division. Leaving aside exceptions like Sunderland, who can afford to break League One transfer records thanks to Premier League relegation parachute payments, clubs that spend more than Argyle do so with money invested by sugar-daddy owners. I say ‘invested’, but in the vast majority of cases there is little or no chance of that money ever being repaid.

This is the key. Both the previous and the current majority shareholders at Home Park have stated clearly that they won’t take on unsustainable debts or build a club supported only by the willingness of a plutocrat to keep throwing good money after bad. Fans can rage against this all they like, but that’s not going to change a thing.

Now, if you want to know where Argyle is actually heading, rather than where you’d like it to go, take a look at what’s happening up at the Exeter Chiefs. A quick history lesson for those not familiar with the game played by men with oddly shaped balls. In 2002, the Chiefs decided to move from their old ground, where they had played for almost 100 years, to a site on the outskirts of Exeter. The new Sandy Park facility was designed from the outset to maximise commercial opportunities, as the club’s Chairman and CEO, Tony Rowe, realised that was the only way to support a competitive rugby team. The Chiefs moved to the new ground in 2006, were promoted to the Premiership in 2009/10 and won the league title for the first time in 2016/17.

Success on the field was unquestionably driven by success off it. Sandy Park was built essentially as a conference and banqueting facility with an attached sports ground, and the Chiefs’ owners were clear that sporting ambition had to be matched by their ability to generate funds. And so far, so good. Rowe said that of the £16m total income in 2016, non-rugby revenue from Sandy Park probably contributed a substantial £6m. With income rising to £20.4 for 2018, it’s likely that non-rugby revenue has also continued to increase.

This matters to those of us of a round ball persuasion because the Chiefs’ model is the one that Argyle wants to emulate. This was made very clear in September 2017 when then-Chairman and main shareholder, James Brent went on a fact-finding mission to Sandy Park. As Tony Rowe commented to the Herald, “From the meeting I had with James when he came up to have a look, I think he probably wants to approach whatever he is doing down in Plymouth from a similar sort of angle.”

Can Argyle hope to repeat the Chiefs’ success? There are a couple of potential barriers.

First, Sandy Park was an entirely new stadium, allowing the Chiefs to plan the conference and banqueting facilities with few constraints. That’s not an option for Argyle with an existing ground to work around. We haven’t seen specific numbers as yet, but it’s very unlikely that Home Park will come close to matching Sandy Park’s five conference suites and eighteen seminar suites. And on match days, the Chiefs have around 1,000 people sitting down to eat in the hospitality area, numbers that will be tough to replicate in Plymouth.

Secondly, Exeter is a more affluent area, with average wages about 10% higher than in Plymouth, and there is the fact that rugby crowd tends to have higher disposable incomes than those that watch football. So while the Chiefs are able to charge £120-£170 a head for pre-match corporate dining packages, that doesn’t look realistic at Home Park (for comparison, Argyle currently charges £55 for match day dining). It will be a long time before the Pilgrims can think about reaching the Chief’s £500,000 average match day income. Exeter also wins out over Plymouth as a conference location, with Sandy Park right on the M5 and close to a regional airport.

However, there is every reason to be positive about Argyle’s future financial outlook. With current conferencing and other income presumably at minimal levels, and match day hospitality revenue this season severely constrained by the closure of the Mayflower, the only way is up from here. The recent recruitment of Andrew Parkinson as Home Park’s Head of Conferencing, Hospitality & Events was a real statement of intent. In his six-and-a-half years as Head of Operations at Liverpool, Parkinson oversaw the £100m redevelopment of Anfield’s ‘Main Stand’, which earned the club an additional £12m in match day income in its first season in operation. Attracting that kind of talent to Home Park is a major coup for the club.

The other potential financial boost is, of course, through the 50% increase in Home Park’s capacity to almost 18,000 next season. And the majority of the revenue from additional supporters coming through the turnstiles drops straight down to the bottom line since the marginal costs – mainly additional stewards to cope with bigger crowds – are minimal. There’s no magic formula for upping attendances and it’s slightly concerning that we haven’t yet seen any details on initiatives to fill those empty seats (8,500 of them based on the average 9,500 attendance at Home Park so far this season). It’s a pretty safe bet though that this is one of the club’s top priorities as the end of the season looms.

The good news then is that the Exeter Chiefs’ approach has worked as they are now one of the few profitable Premiership rugby clubs and have achieved success at the highest level on the field. That makes it a pretty good template for Argyle who are putting the pieces in place to follow their lead.

The bad news is that this strategy takes time to bear fruit. Which means that Argyle is now in that awkward limbo where a significant level of spending is required to keep the team competitive, but the commercial side has not yet kicked in sufficiently to generate the kind of investment in the squad that fans want. Which means that we are likely to see three things in the next couple of years.

First, more tricky end-of-season negotiations with out-of-contract players. Last year it was Sonny Bradley who was tempted away to Luton Town with an attractive package and this time Graham Carey and Ruben Lameiras will be in the spotlight. The club will doubtless be anxious to keep them, but it won’t break the bank to do so.

Secondly, Derek Adams will be at Argyle for a while yet as, despite regular comments on the amount (or lack) of money available to spend on players, he has shown himself willing to work within a limited budget. The club will not be anxious to take any chances by bringing in a new manager who might not be so understanding.

Finally, the focus on bringing undervalued talent into Home Park will intensify. That could mean players whose abilities are as yet unrecognised or whose careers have gone off the rails as a result of injury or other factors. This approach had ‘mixed’ success last summer with some of the signings making just a handful of, or even no, appearances in the starting eleven so far. But last week’s announcement that Argyle are recruiting a Head of First Team and Reserve Recruitment to ‘Identify players…within the club’s budget’ and to report to Derek Adams signals a renewed drive to build a squad based on value-for-money rather than big name signings.

In other words, fans are going to have to be patient because, like it or not, the owners have signalled that a financially sustainable football club is the only realistic path if Argyle is to be around for the long term. Whether you agree with them or not – and I’ll put my cards on the table and say that I do – is irrelevant. Unless, of course, you have the spare £20 million or so to shovel into the financial black hole that is EFL football in 2019. In which case I suggest you drop the Chairman an email. I’m sure he’d be delighted to tell you who to make the cheque out to.

Author: Colin Bradbury