Now we’re back. We feel we need TransferRoom and, most importantly, we use it. If we wouldn’t use it then we wouldn’t spend the money, of course. With the Covid situation it’s still really tough in Holland because no fans are allowed in the stadium, so finances are difficult. But we feel this tool is something that can help us. It fits our sustainable model to work smarter.
‘Financial sustainability’ and ‘football clubs’ do not always go hand in hand, but at Go Ahead Eagles it is the number one priority for Owner Alex Kroes.
The Eredivisie has been one of the European league’s most impacted by the coronavirus pandemic since early 2020, with clubs currently dealing with a second shut out of fans.
Empty stadiums mean dwindling financial resources and, therefore, difficult decisions for team owners.
Or it should.
Kroes, co-Founder of the SEG International agency, who bought Go Ahead Eagles in early 2019, cannot understand why it’s not a sentiment shared by all clubs.
“For me the main thing is financial sustainability over sporting results. That is my number one rule, which is very uncommon in football,” he tells TransferRoom. “I honestly believe every club in the world should start with that sentence. Then leagues will be much more competitive and there will be a level playing field.
“At the moment there are so many clubs that are not run properly, that do not care about the long term and sustainability. There are just too many people gambling with their clubs.”
De Adelaarshorst: Eredivisie clubs' finances have been constrained by a second shut out of fans
Churn and return
When the pandemic first struck in the second quarter of 2020, Kroes was forced to act to keep Go Ahead on track. No department at the Deventer-based club escaped unscathed.
He explains: “With Covid I literally was forced to kill a couple of the tools we were taking. It was a case of ‘do we 100% need it now or can we afford to leave it a little bit?’ We decided with TransferRoom to leave it a bit because as a club we went down from €5.2m turnover to €4m turnover. We had to reduce €1.2m in expenses. Where do you start? We reduced our player budget from €1.8m to €1.4m, so that was €400,000 less but then you have to find other ways to save money. I’m still behind those hard decisions I made back then.”
Go Ahead finished second in the Eerste Divisie in 2020-21, earning promotion back to the Eredivisie after four seasons in the second tier.
The subsequent increased revenue has enabled Kroes to increase - while still prioritising - spending, with a return to TransferRoom in January 2022.
“Now we’re back,” he says. “We feel we need it and, most importantly, we use it. If we wouldn’t use it then we wouldn’t spend the money of course. With the Covid situation it’s still really tough in Holland because no fans are allowed in the stadium so finances are difficult. But we feel this tool is something that can help us. It fits our sustainable model to work smarter.”
Go Ahead have accustomed well to life back in the top flight, finishing in 13th position to secure safety.
Being smarter in recruitment can help the club to fulfil Kroes’ aim of becoming a permanent fixture in the Eredivisie.
Kroes continues: “The main reason for us to rejoin TransferRoom is sometimes you want to get rid of a player. It’s an excellent tool for our network but also to make our players available for a transfer or a loan. I try to use it as a tool for trying to get rid of players. It makes the market bigger for you.
“I do have my network but sometimes you feel like you’re depending too much on agents in a way, and this makes life better. I'm delighted to be able to use it again.
“If you don’t have too much money to spend you have to be careful and make proper decisions… the fewer mistakes we are making in picking the right players, the more chances we have to stay in this league.”
Economics 101: don't spend more than you earn
Having success on the field versus being sustainable off it is, the owner admits, “a constant battle”.
He says: “More and more people are thinking like I am thinking in football now. Maybe it’s a silent majority, who knows.
“It’s not difficult if you start with how much money can you honestly, realistically predict will come in. What is your turnover, what are your expenses and then what is left is your player budget? In our situation that is €3.5m all in. With that amount we are number 17 or 18 in the league, out of 18 teams. It’s not easy to stay in the league with that kind of money, but at least it’s realistic. I can’t spend €5m on players if I only have a turnover of €9m and then all my expenses. It’s a realistic forecast.
“If we grow as a club and make our income higher, if our turnover goes to €10m, for example, then I hope I can have a player budget of €4.5m because every new euro I get in I try to spend on the team. But it has to be realistic and sustainable, and that is the biggest mistake many clubs are making.”
Alex Kroes is 'Eredivisie-proofing' Go Ahead Eagles for life in the top- light
Go Ahead Eagles are actually ahead of schedule - Kroes had a three-to-five-year plan to get into the Eredivisie when he bought the club - and work is being done now to boost finances for the future, with four new VIP hospitality boxes to be installed at De Adelaarshorst to increase commercial revenue and a longer-term focus to improve the academy as an additional revenue stream.
For Kroes, it’s a matter of “maximising and optimising” resources and, most importantly, controlling costs.
“Our operating model is breakeven before tax and before transfers. We are one of the few in Holland actually that do that.
“I accept relegation. If we cannot stay in the league then I accept it so long as we run the business in the right way. At least I know that if we go down, our club will stay alive. It’s terrible when you hear these stories about clubs that get relegated and then relegated again.
“Of course I would prefer to be playing in the Eredivisie, that goes without saying, but not at any cost.
“We just have to work hard in all areas to make sure we are Eredivisie-proof. Then we can play in the top league in the long run.”