Why Aberdeen's loss-making business model can give them edge on rivals

The Herald Scotland

6 hours ago

Whether Aberdeen can build upon their historic Scottish Gas Scottish Cup triumph over their Parkhead rivals at Hampden back in May and add more silverware to their trophy cabinet has, despite the arrival of no fewer than four new players at Pittodrie in recent weeks, scarcely merited a mention.
The announcement this week that chairman and majority shareholder Dave Cormack and director Tom Crotty have promised to plough in £8m of fresh investment has hardly given those who occupy boardrooms across the land palpitations either.
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That is, even on these shores, a trifling amount in the modern game. Plus, the vast majority of it will be spent building an indoor pitch at their training ground.
The hour-long Red TV interview with Aberdeen-born, United States-based software entrepreneur Cormack that was posted on You Tube on Wednesday, however, was fascinating and suggested that more good times may well lie ahead for the north-east outfit in the forthcoming campaigns. Even if he did say, 'We're making a decision to lose £3m or £4m operationally a year as a club'.
Much has been made about how data analytics will drive Hearts' recruitment efforts now that Bloom, who has enjoyed great joy with Brighton down in England and Royal Union Saint-Gilloise over in Belgium using such methods, is a major player behind the scenes.
Hopes are high among the Jambos support that Jamestown Analytics, the company owned by the mathematics whizz who is known as The Lizard on the poker circuit, will be able to unearth a few outstanding players for affordable fees in the transfer market who can enable them to compete with larger and richer rivals.
It was a route which Rangers decided to go down back in 2023 when they overhauled their scouting department, brought in a raft of new personnel to key positions and moved to a data-led operation which relied more heavily on video analysis than had previously been the case.
But Cormack, who stated that he expected Swedish manager Jimmy Thelin to bring in around eight new recruits in total before the summer window closes on August 31, pointed out that is exactly the approach which Aberdeen have been taking for some time now.
It is a strategy which has enabled them to turn a profit on their incomings and outgoings and to spend far more money on transfer fees and player wages than they would be able to if they relied on gate receipts, sponsorship money and television income alone because they are confident they will recoup their outlay and more further down the line.
(Image: Craig Foy - SNS Group) They made in excess of £8m from the departures of Bojan Miovski (Giron), Duk (Leganes) and Connor Barron (Rangers) last season. The year before that they banked over £3m from Ylber Ramadani (Lecce) and Ross McCrorie (Bristol City) being offloaded. Three years ago, the sales of Calvin Ramsay (Liverpool) and Lewis Ferguson (Bologna) swelled their bank balance by over £7m. A couple of seasons before that, Scott McKenna (Nottingham Forest) and Sam Cosgrove (Birmingham City) exited for over £5m.
'We have got a squad planning and recruitment team in place now which I think will stand us in good stead,' said Cormack. 'Everyone is talking about these analytics and algorithms which everybody is using. But we have been using those for five or six years now. Miovski, Ramadani, a number of players, have come through that. We have tapped in to that.'
The Aberdeen chairman expects winger Topi Keskinen, who featured prominently for Finland at the European Under-21 Championship finals in Slovakia this summer and scored goals in draws with the Netherlands and Denmark, to be the next recruit to bring in a sizeable return on their investment.
'There is a reason we have paid £1m for Topi,' he said. 'Listen, in the last five years we have managed to sell just over £20m worth of players. That is significant income for us. The trick is balancing that with being competitive.
'Our scouting needs to be excellent so we can unearth and get value from players. But people want to come to Aberdeen now because they know they will get an opportunity to move on to a bigger club.'
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Cormack has come in for fierce criticism from supporters and media commentators – including from this correspondent – during the six years that he has been chairman despite the huge sums of money which he has personally ploughed in to his boyhood heroes.
Before Thelin was brought in last summer, he had a poor track record when it came to appointing managers. The team's results at home and abroad had often left a great deal to be desired because of his bad choices.
But he is hopeful that Graeme Shinnie and his team mates can improve further despite having to deal with European group stage football once again next term – something which they struggled badly with when they got into the Conference League two years ago – and play against revitalised Hearts and Rangers teams.
'It's always good to have competition,' he said. 'It's never a worry, it's a challenge. This multi-club environment is an approach other clubs (Hearts, Hibernian and Rangers) are taking is new. But I think it is important we focus on what Aberdeen are doing. You will never get all of your recruitment right. The industry average is 50 per cent. We need to be at 70 to 80 per cent.
'Listen, if I fall under a bus tomorrow I don't want to leave the club in a poor financial position. It has to stand on its own two feet. But we're making a decision to lose £3m or £4m operationally a year as a club. What we have got today is a player trading environment which is allowing us to punch above our weight in terms of recruiting and player wages.'