Imaginative sporting clubs and venues can thrive even in recessionary times, says Alex Turner

SPORT can sometimes appear to be a sector that exists outside the normal rules of economics. Real Madrid is offering its most expensive seat ever – £785, which is nearly £9 a minute – for the visit of Liverpool in the Champions League next month.

Manchester City tried to entice Brazilian footballer Kaka in a deal worth more than £100m, plus wages of £25m a year.

And it’s not just football – the bidding for former England cricket captain Kevin Pietersen is expected to go above £1m for his participation in the Indian Premier League. He could earn up to £500,000 for just three weeks’ work.

“People are still going for top-end quality,” said Geoff Durbin, Lancashire County Cricket Club’s commercial director. “Suddenly, there’s no recession.”

But he is not talking about elite sportsmen or Champions League matches, but the visit of four world-class homegrown stars who will be playing at cricket’s Old Trafford later this year and have the global pull to rival those who ply their trade less than a mile down the road at football’s Old Trafford.

Take That will play for five nights in June, and Coldplay will appear later in the summer, at the ground which has gained a reputation as one of the UK’s top outdoor concert venues.

Mr Durbin said: “Around 400,000 people will be watching concerts and cricket in 2009 at Old Trafford as we cement our position as one of the most popular multi-purpose outdoor stadia in the country.

“In what is a tough economic climate, and with missing out on a Test match this year, these concerts will provide Lancashire with vital revenues.”

Lancashire’s latest accounts, for the 15 months to December, 2007, showed its subscriptions and gate receipts from cricket only accounted for £4.1m of its £14.5m turnover while central money from the England Cricket Board was £1.9m.

“Cricket can’t pay for itself,” said Mr Durbin. “The majority of the competitions attract very small crowds.

“I think it is not necessarily a bad thing if you accept it. My job is to bring in alternative revenue streams, such as catering, conference and banqueting, we’ve had eight years of pop concerts which generate seven-figure sums, the lottery donates significant amounts to the club and to youth development, and the car parking brings in around £400,000. That’s what we are focused on doing.”

Commercial revenues through diversified activities will increase in the future with a major redevelopment plan. The first phase will create a £12m conference, event and banqueting facility while future work will make major changes to the ground with the aim of hosting an Ashes Test in 2013.

Mr Durbin said: “We have got unique things – we are only 800 yards from Manchester United, which gives us spin-off business. We are close to the city centre and we have our own Metro station.

“These are the cards we have been dealt and this is how we are going to play them.”

Gambling is also a key part of the activities at Aintree Racecourse, although managing director Julian Thick is keen to ensure that the Grand National weekend remains a safe bet for the company.

He said: “Our main focus is the John Smith’s Grand National meeting in April. The key barometers are ticket sales and hospitality sales. Demand was really strong in August and has kept reasonable pace since then.

“Pre-sales are where we were at this stage last year. They are marginally up on Saturday but down on Thursday. From now until the race meeting, we have got tickets to sell as well as hospitality.

“In the current marketplace, to be in the position we are is quite an achievement and reflects a demand for the race meeting. It’s one of the major iconic events. It’s a once-a-year event and it’s got a very loyal support group.”

However, he is worried about the effect the recession could have on sales, with the final weeks proving crucial for the event.

He said: “We are concerned at this stage, but we have built Aintree into a world-class event in a world-class venue. We are moving into a very important sales phase for us.

“Hospitality is not doing as well as ticket sales and we have taken the decision to reduce the amount of temporary space. We have got a large triple-decker space which will be reduced by 20m – but there is still strong demand.” It will not become clear until the end of Grand National Saturday, on April 4, how far short – if at all – the weekend’s attendance will fall below the 149,000 that attended last year.

However, the racecourse will be looking across anxiously at Goodison Park, where the average Premier League crowd is down 5,000 on last season, and more than one in five seats are left empty.

With a potentially-unappetising list of visitors ahead of them in the fixtures, the season’s average could prove to be the lowest since the 1993-94 season when the redevelopment of the Park End limited attendances.

AND it is not just Everton that is struggling, with the average Premier League attendance down by almost 1,000 at 35,095. This not only reduces gate receipts by more than £1m, but has a knock-on effect on the secondary spend, at the food kiosks, programme sales and merchandise.

Attendances are also falling at Tranmere Rovers, with the league game average of 5,704 – down 12% on last season and down 37% on the 2004-05 high of 9,044.

Increasingly, sponsors are reviewing their options rather than renewing their deals, although long-term deals will help to insulate some organisations, at least for now and assuming the companies stay in business – unlike West Ham’s main sponsor XL Airlines.

For example, John Smith’s are the main sponsor of the Grand National for this year and next, and Everton is in the first year of a three-year £8m deal with beer company Chang.

However, across the sector there are problems. Insurer AIG has confirmed it is not going to renew its £56.5m, four-year deal with Manchester United, although the club has more than one year to find a replacement and is unlikely to be short of suitors among its global network of sponsors.

And Manchester United’s former sponsors, Vodafone, is not going to renew its £4m-a-year association with the England cricket team when it ends in 2010.

Barclays, the Premier League’s title sponsors since 2001, has said it is reviewing its sports sponsorship portfolio, which also includes golf, rugby union and tennis, although they would be loath to lose such a high-profile and well-established association.

That is the case for Royal Bank of Scotland which has confirmed a £20m, four-year extension of its sponsorship of rugby union’s Six Nations. Even in the beleaguered banking sector, money can be found for the right product.

The sports industry will hope it remains the right product for sponsors and fans alike throughout the downturn.

alex.turner