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Menno Geelen, Financial Director of Ajax, recently made an appearance on the Ajax Podcast and was willing to explain a thing or two about the club’s financial situation. He shed a light on the many different ways in which Ajax makes money, naming ticket sales, business seats and skyboxes, sponsors, merchandising, television licenses, and transfer income.
Especially the latter source, outgoing transfers, is responsible for the recent financial growth. Ajax earned over 150 million euro’s just last summer as Frenkie de Jong and Matthijs de Ligt waved goodbye, and many fans are wondering how much of that money will be invested in the signing of new players. A considerable amount, but not all of it, admits Geelen. The money that Ajax spends on incoming transfers is not specifically included in the annual budget. “We get that money directly out of the boys we sell.”
What is included in the budget, however, is the salary of those new signings. “And that budget is based entirely on commercial income”, says Geelen. “When you sell Frenkie, you can then use his fee to bring players like Promes, Marin and Martínez to the club. That creates an increasingly large wage bill, while we also invest eleven to twelve million euro’s in the academy every year. That money has to come from somewhere, and that is what most of my job is about: to make sufficient commercial income with which the club can invest.”
There are many indicators around Ajax that show its commercial success. The Johan Cruijff Arena is almost always entirely sold out, the waiting line for season tickets is extensive and growing, and the profits of merchandising rose from fourteen to twenty-one million euro’s in one year. In addition, Ajax makes more money from sponsors than competitors PSV and Feyenoord combined. It’s safe to say that Ajax is doing well on a national level. “But if we intend to start competing with the bigger clubs in Europe, we have to find different sources of income. The ones mentioned above will not be enough. You’d have to think internationally”, Menno Geelen refers to the recent expansions to the US, China, Japan and Australia.
Geelen also explains why Ajax is focussing on commercial income to a degree that is incomparable with, for instance, its English competitors. Chelsea receives around 160 million euro’s from television licenses. For a smaller club like Crystal Palace, this number shrinks to around 140 million. Ajax has to make do with eight million euro’s, simply because the Eredivisie is a lot less attractive to broadcasting companies. A difference of three or four million euro’s in commercial income is barely noticeable to a Premier League club. “But we live off of sponsors”, says Geelen.
Another option for Ajax would be to raise the prices of tickets and season passes. As of right now, the cheapest season pass at Ajax costs around 250 euro’s, while the cheapest option to a Chelsea fan is around 1000 euro’s. Geelen still does not believe in raising the prices. “If we were to double the prices of our season passes, we would still have no trouble selling out at all. But Ajax is Ajax and has to remain accessible to everyone. Of course, ticket prices fluctuate and are bound to go up every now and then, but we will always keep the increase to a reasonable maximum. We’re not looking to grow our income through ticket prices.”
Instead, Ajax has been working hard to find more commercial income across the borders. As mentioned earlier, the club has been very active on the American, Chinese, Japanese and Australian markets. “One of the biggest challenges we’re facing is the low visibility of the league. Our efforts to get noticed on a bigger scale started in China. We invested a lot of money in order to be broadcasted. For the first three years, China only cost the club money, the following three years we broke even, and now we’re finally seeing profits. Millions of euro’s are now streaming in from China.”
More recently, Ajax struck deals with ESPN and Bleacher Report in order to be broadcasted in the United States as well. “We’re already breaking even on the American market, and we’ll likely be making a profit soon.”