Director's report
Football
Football developments
Football-related activities
AFC Ajax NV (AFC Ajax, Ajax) produced a negative net result in the sum
of NLG 5.4 million for the financial year 1997/1998. Net turnover
dropped from NLG 90.7 million in 1996/1997 to NLG 85.6 million.
The decrease in net turnover can be attributed to a lower turnover from
football activities. These include turnover from gate receipts national
league, Amstel Cup (national cup competition) and friendly games, gate
receipts European competitions, premiums European competitions, season
ticket sales, business seats and sky.box seats and indirect match income.
Turnover from these activities dropped from NLG 67.8 million to NLG 50.4
million. However, if we disregard the gate receipts European competitions
and premiums European competitions, the other turnover from football
activities shows aslight increase from NLG 39.6 million to NLG 42.5 million.
This increase can primarily be attributed to higher income from Amstel Cup
gate receipts. Turnover from gate receipts European competitions and
premiums European competitions dropped from NLG 28.2 million to
NLG 7.9 million, the principal reason for which is that AFC Ajax competed
in the UEFA Cup in the 1997/1998 season, rather than in the Champions
League. This shows that competing in the Champions League is a major
contributing factor in net turnover, as well as in the net result.
Football-related income from sponsoring, television and merchandising rose
from NLG 22.9 million in 1996/1997 to NLG 35.2 million in the
1997/1998 season. It was especially the increase in sponsor income from
NLG 14.0 million to NLG 22.4 million that could be termed substantial.
This increase in sponsor income can chiefly be attributed to the conclusion
of a new sponsor contract with our main sponsor ABN AMRO and with
our partner Canal+.
Costs increased sharply in the 1997/1998 season. We observed an especially
striking increase in the wages, salaries and social security contributions item,
which rose by NLG 12.4 million to NLG 46.2 million. This increase can
partly be attributed to the increase in workforce from 98 to 117 staff (in FTE's)
In addition, the players' average wage bill was up. This trend can be observed
in the entire sector. AFC Ajax NV saw its wage bill increase sharply on
account of the expansion of the first team squad to 25 players by recruiting
new players who were ready to compete at the highest level from the onset.
The club had some catching up to do in this respect because of the
departure of a large number of players in the 1995/1996 and 1996/1997
seasons as a result of the Bosman ruling. We were unable to compensate for
this exodus from the club by bringing in players from our own youth
programme. Ever since the Bosman ruling, contracts with players are
concluded for longer terms, so that they can only leave without a transfer fee
after a longer period with the club. This also affects the players' average wage
bill as longer-term contracts usually involve higher salaries.
Capital expenditure was recovered in 1997/1998 by winning the national
championship and finishing first in the national cup tournament. At this
time, Ajax is again in the position that it employs skilled, high-quality
players. We aim to maintain this high-quality level by an annual influx of
Ajax-trained talents. This development should ultimately lead to a reduced
growth in the wages, salaries and social security contributions item.
Training and development of Ajax-trained youthful players is and will
remain an important cornerstone of Ajax' policy. In addition, having
players of our youth training programme compete in the first team, will
have a positive effect on the relationship with the supporters.
From a sports perspective, the 1997/1998 season was successful. In the
second season of playing in the Amsterdam ArenA, Ajax won the national
championship for the twenty-seventh time, seventeen points ahead of PSV,
which came in second. Another highpoint was winning the cup final in the
Kuip stadium in Rotterdam. This victory made Ajax the winner of the
national cup for the fourteenth time in. the club's history. It was the first time
Ajax won the 'double' in fifteen seasons. Ajax reached the quarter finals in the
UEFA Cup. Ajax was unable to win both the home and the away matches
against Spartak Moscow and was knocked out.
The teams of the youth training programme, one of our policy spearheads,
had a successful season in their own competitions. The second team, the
bridge between the youth training programme and the first team, won the
championship, as did the Al, A2, BI, Cl, C2 and D2 teams.
The A1 juniors and the B1 juniors won their respective championships for
the seventh time in a row.
The talent days were a great success. We had a record number of registrations:
4,500 players registered. Of these, 2,800 boys were ultimately allowed to
show off their talents to the Ajax scouts.
In 1997/1998, AFC Ajax NV initiated a number of projects abroad, inclu
ding a study of close co-operation with a number of foreign clubs. We hope
to definitively launch these projects in Belgium, South Africa and Ghana in
the 1998/1999 season. One of the objectives of these projects is to create a
better international supporting base for scouting and the youth training
programme.
Ajax' call for more high-quality European matches was also heard by other
parties. Media Partners, an independent sports and media agency, has deve
loped a concept for an European league. League matches are to be played on
weekday evenings. The concept, in principle, does not get in the way of
domestic leagues. In response to the Media Partners concept, the UEFA
developed its own plans. The UEFA also invited a number of clubs, including
Ajax, to exchange ideas about the future of European football. During these
meetings, the clubs asked the UEFA to provide access to all sorts of infor
mation, particularly financial information.
The UEFA plans are based on participation of various clubs from major
football countries. The Champions League will be made up of eight groups
of four teams, the best two of which advance to four groups of four.
This phase is followed by a knock-out system. The finalists will play a total
of seventeen matches in one European season. The UEFA proposed to
divide a larger part of the income over the participating clubs. Total prize
money will also be increased. In addition, the aim is to combine the
UEFA Cup and the European Cup Winners Cup into one tournament.
The conclusion is justified that, whatever shape the final plans will take, the
new structure will allow football clubs to compete in more European
matches and there will be more prize money to be earned. As far as Ajax is
concerned, this is a desirable and logical development, which, we believe,
cannot be stopped.
Sponsoring
Ajax maintains close relations with its sponsors, evidenced by the fact that
most sponsors have been associated with the company for several years
already. In the financial year 1997/1998, only Opel decided to terminate its
relations with Ajax after the end of the financial year.
Agreement has now been reached with Mitsubishi Motors Europe, which
has undertaken to commit itself to the company for four years with effect
from the 1998/1999 season. We have already made agreements with
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