Dundee have revealed losses worth over £500,000, while warning “tough choices” must be made to protect the future of the club.
In a statement to Dark Blues supporters, managing director John Nelms addressed the ongoing financial impact of the coronavirus pandemic.
He sent out an ominous message about the “grim reality” facing the Dee, suggesting cost-cutting measures will be implemented in the near future.
Nelms’ words came in the wake of news the Championship season won’t begin until October, with league reconstruction plans having gone up in flames.
The American’s statement warned choppy waters lie ahead for the Dens Park outfit, who have suffered a colossal financial hit over the last three months, leaving them with costs far outstripping revenue.
It read: “We have been working diligently, doing all we can to sustain the club for future generations.
“It has not been easy negotiating our way through an unprecedented situation, but we were committed to keeping our staff fully paid throughout the brunt of the crisis, topping up their wages whilst furloughed.
“Since the start of the Covid-19 pandemic we have lost out on revenues equating to over a half-a-million pounds.
“Although we have a start date for the 2020/21 season, there is no clear indication of when we will be able to have you, the life blood of Dundee Football Club, back in your seats.
“Some optimists think the stands can be filled in October. Others say it is likely to be in 2021. Either way there has been, and there will continue to be, a significant and unsustainable stress on the club’s finances.
“Our latest budgets show that in addition to the half-million pound loss for the shortened 2019/20 season, our revenues for the upcoming season will be more than halved as a result of the measures taken to contain coronavirus.”
The Dens Park club believe they are in possession of an insurance policy that covers them for losses incurred during the ongoing global pandemic.
However, with insurance companies fighting in court against payout levels they claim will cripple the industry, the Dark Blues have no choice but to wait for a verdict.
“While we have the strongest possible bespoke resilience wording in our insurance policy, we do not expect to see any initial payment on our current insurance quantum until the Financial Conduct Authority obtains a ruling from the High Court,” explained the Dark Blues’ statement.
“This hearing will determine the extent of liability the individual insurers have and is scheduled for late July/early August.
“It is our sincere hope that the insurance comes through, and for the full amount claimed, but unfortunately there are no guarantees for any of it.
“In the event that our claim is successful, we will be in a stronger financial position, however, it will be months before we recover our loss of revenue from the past financial year, and it is likely we will not be able to collect on this financial year’s losses until well into the 20/21 season.
“This is the grim reality of what we are facing.”
With no certainty over their insurance cover, with no prospect of fans returning to Dens Park in the short-to-medium-term and with no matches scheduled until October at the earliest, the Dark Blues have now been left with no choice but to cut costs – a decision they admit will impact on staff, who could face redundancy, wage cuts or wage deferrals.
“The continued uncertainty, coupled with the restrictions on the club and on our other means of resource that bolster the club, has resulted in an unsustainable operating cost structure,” the statement said.
“We now have tough choices that must be considered to reduce these costs in order to protect the future of Dundee FC.
“With less than half our revenues anticipated to be received in the 20/21 season, our club’s operations are under review.
“The club may need to pause several functions until it is financially prudent to resume.
“Thus starts the difficult conversations, the results of which will have an impact on our people, those whom we have always tried to take care of over the past seven years.
“We will be entering into a period of consultation with them to discuss the consequentials as the club braces for the future.”
The club also announced season tickets for the shortened 2020/21 season are back on sale after previously being suspended.