LIQUIDITY AND FINANCING
Ajax' main financing needs are in the field of transfer and signing fees, personnel costs,
the youth training programme, direct match costs and housing costs. The cash flow is
mainly characterised by high income at the start of the season as a result of income from
season tickets, business and sky box seats and sponsor contracts. This income is fully
paid in advance by the cardholders and partially in advance by the sponsors at the start
of the season. Furthermore, during the summer period, as part of the preparations for the
new season, players' contracts normally expire while new contracts are closed. It is Ajax'
aim to finance the costs related to the closing of new players' contracts from the J
operational cash flow and the sale of players.
During the football season Ajax mainly receives income from TV rights, gate receipts and,
should Ajax qualify for the Champions League, the premiums from this competition.
Participation in the first round, until the quarter finals, has been secured for next year.
Ajax' spendings, except for the costs related to the signing of new players, have a
relatively stable character, depending less on successes in the field.
The development of the cash flow during the year is such that Ajax starts the season with
a relatively strong cash position, which reduces during the season. The extent to which
this takes place partly depends on the income which Ajax receives from TV rights, gate
receipts and Champions League premiums.
The main sources of financing are the operational cash flow and the Company's capital.
In 1994/1995 the cash flow from operational activities amounted to NLG 18.5 million
compared with NLG 30.9 million in 1995/1996. The increase in 1995/1996 was largely the
result of a restitution from the surrender of the long-term lease contract of 'De Meer.'
The increase of the cash flow from operational activities by NLG 30.5 million to NLG 61.4
million in 1996/1997 was largely the result of a strong decrease in the working capital.
Cash flow from operational activities during the period 1 July 1997 until 31 December 1997
amounted to NLG 5.7 million. The lower cash flow compared with 1996/1997 was mainly
caused by lower turnover from football activities as a result of Ajax not participating in the
Champions League and by a strong increase in the wages and social security costs which
resulted from investments in contracts of new players at the beginning of the season and
longer contracts or contracts lengthened at higher costs.
The investments in transfer and signing fees (players) and tangible fixed assets (De Toekomst
and the Amsterdam ArenA) in 1994/1995 up to and including 1996/1997, as well as the
participation in Stadion Amsterdam NV were wholly financed from the cash flow from
The investments in transfer and signing fees and tangible fixed assets in the first half-year
of 1997/1998 could only partially be financed from the cash flow from operational j
activities. These investments were also financed from available liquidities.