Personnel and Organisation
ABN AMRO, UMBRO, Canal+ and Mitsubishi about more international
co-operation. The contract with Active Roever Travel was extended, which
leaves the total number of sponsors at a constant fourteen.
Advertising income was up. This can primarily be attributed to the fact that
Ajax competed in the UEFA Cup in the 1997/1998 season. Contrary to the
Champions League, the UEFA Cup allows clubs to use advertising oppor
tunities offered by matches themselves.
Total sponsoring and advertising income was NLG 22.4 million in the
financial year as compared with NLG 14.0 million in 1996/1997.
Television
Income from exploitation of television rights was NLG 6.4 million in
1997/1998. The so-called KNVB Professional Football Meeting made
agreements about the distribution of television income for matches played
within the framework of the KPN-Telecompetitie (the Dutch Premier
League) and the Amstel Cup (national cup competition). This distribution
according to KNVB standards will be applied until the end of the 1998/1999
season. A more performance-related distribution will be applied later.
Television income for the Ajax matches played in the scope of the
KPN-Telecompetitie and the Amstel Cup totalled NLG 2.4 million.
In addition, television income was generated by friendly matches and
matches played for the UEFA Cup. Ajax has offered thé television rights for
UEFA Cup matches to broadcasting companies itself, which was effected
through the current European broadcasting contract with NOS (a Dutch
broadcasting company).
Merchandising
Merchandising includes income from:
merchandising activities;
exploitation of image rights of players;
direct sales of merchandising to consumers;
the museum.
These activities have been placed in the. following group companies:
Football Merchandising Promotion Zuid Oost BV
(Ajax Merchandising);
Tekmessa BV (Ajax Images);
Eurysakes BV (Ajax Direct);
Exekias BV (Ajax Museum).
Moreover, merchandising includes income from licence fees originating
from the sponsor contracts between AFC Ajax NV and some of its partners.
Ajax Merchandising
In the financial year, Ajax Merchandising focused on improving its product
range. In addition, the first steps towards better product distribution were
taken. Results were subject to some pressure on account of poorer sporting
achievements in the 1996/1997 season. This resulted in excess stock at
many sales outlets (licencees). It also proved necessary to expand the Ajax
Merchandising organisation. Nevertheless, merchandising turnover, inclu
ding licence fees ensuing from sponsor contracts, was satisfactory at nearly
NLG 3.5 million, whereby Ajax Merchandising made a positive contribu
tion to the results. Moreover, this created a solid foundation for further
growth.
Ajax Images
From a quantitative perspective, Ajax Images has not attained the goals set.
Although new projects were initiated, turnover and results fell short of
expectations, one of the reasons being that the commercial exploitation of
image rights of players is still relatively unknown in the Netherlands. As a
result, the initial stages of this activity are characterised by high start-up
costs. Although Ajax Images is a marketing and service organisation whose
key objective is to generate additional income for the players, the target for
the coming seasons will be to achieve a break-even result.
Ajax Direct
The establishment of Ajax Direct is a first step towards better distribution
of the Ajax merchandising products. Ajax Direct focuses on sales of these
products through the Internet and mail ordering. Mail ordering offers the
opportunity to order Ajax products using a catalogue.
The mail order activities were launched in May 1998 and have, therefore,
only contributed to the results for the duration of two months. In addition,
the initial phase of Ajax Direct was characterised by start-up costs. As a
result, Ajax Direct has been unable as yet to make a positive contribution to
the result.
Nevertheless, the division was off to a promising start, as it realised a turn
over of NLG 0.8 million over a short period. An important side-effect of
Ajax Direct is that it allows for better insight into the customers profile, which
may benefit Ajax in executing other activities.
Ajax Museum
The Ajax Museum opened its doors to the public on October 15, 1997.
It welcomed more than 85,000 visitors in its first year, whereby it lived up to
expectations. An image such as Ajax's warrants a suitable museum. Therefore,
we opted for a luxurious design. The resulting depreciation, charges and
relatively high accommodation expenses result in only a modest result despite
a financial contribution by the company. Minor results are also expected in
the coming years.
The 1997/1998 season saw substantial investments in reinforcement of the
internal organisation, both from a quantitative and a qualitative perspective.
This led to an increase in workforce, particularly in the commercial and
financial departments and automation department. In addition, the
Customer Service department was set up. This department specialises in
season-ticket sales, which was largely contracted out in thé past.
The company implemented a staff appraisal system, i.e. staff are periodically
expected to attend performance and appraisal interviews. In line with these
interviews with staff, we drew up individual and collective training plans.
Specific courses were organised for the Customer Service department.
In addition, staff began taking automation courses and a number of staff are
now taking commercial and financial courses.
Staff commitment and motivation are a decisive factor in the company's
success. The company has the possibility to grant staff options on AFC Ajax
NV shares in order to promote commitment and motivation, as well to
reward staff members for their efforts.
A total of 204,800 options were granted in 1998. These option rights are
granted unconditionally over a five-year period.
AFC Ajax NV is a dual-board company, by virtue of which it is liable to
institute a works council. The works council, which will be made up of seven
members, will have been elected and taken up its duties on December 1, 1998.
Amsterdam, November 24, 1998
Executive Board
M.P. Oldenhof
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