FA Cup is still a game-changer for future of lower league clubs

It’s the third round this weekend and the tournament has lost none of its ‘magic’ for sides where 90 minutes of Cup football - and the money that goes with it - can be the difference between financial security and crisis

When Exeter City kick off their FA Cup tie against Liverpool, it will not only be one of the biggest nights in the players’ lives but a crucial payday for the League Two club.

The mismanagement of football clubs’ finances, and subsequent administrations, has been a constant theme in the modern game as the gap between the richest and poorest teams has widened. But this weekend’s games in the third round of the FA Cup – the point in the 145-year-old competition commonly associated with shock results as teams from the top two tiers join in – provide a chance to boost the coffers.

As the tournament has slipped down the pecking order for the largest clubs, the TV and sponsorship cash that the competition still draws means the value of 90 minutes of football can prove the difference between staying in business and crashing out of existence.

For Exeter, the home match against Liverpool provides a neat bookend to an eventful decade. In 2005, the Devon club achieved a remarkable 0-0 draw away in a third round tie at Old Trafford, before hosting Manchester United at St James Park in the replay (losing 2-0 to goals from Cristiano Ronaldo and Wayne Rooney). Many claimed the fixtures kept the heavily indebted City – controlled by a supporters’ trust since 2003 – in business, after making it around £1m in revenues.

“The club was in dire straits, with everyone attempting to raise money,” its chairman Julian Tagg told The Independent. “The draw was manna from heaven and the games certainly sped up our recovery.

“But it was an organisational nightmare, I remember [United midfielder Paul] Scholes winding up for a shot in the Old Trafford game and thinking, ‘we’ve got five working days to organise getting thousands of fans into our tiny ground’ – and half wanting him to score.”

This time, Mr Tagg believes, the club is well prepared to take full financial advantage of its marquee tie – bringing in electronic advertising hoardings and carefully allocating tickets. As the tie is to be screened on the BBC, the club will receive a standard £144,000 (clubs featuring on BT Sport get less, it is understood) ,which it intends to spend on its infrastructure and playing staff.

The ticketing for games between teams of vastly different stature can be controversial, whether it’s clubs with huge followings squeezing into small grounds or lower-league fans clamouring for one-off chances to visit prestigious venues. Unlike league matches, where clubs set ticket prices, the FA sets a maximum that can then be lowered. Between the third and sixth rounds, 45 per cent of gate receipts are divided between both teams, with 10 per cent heading into a central pot.

Premier League Everton has lowered adult tickets from around £40 to £15 for the tie with Dagenham and Redbridge on Saturday, to ensure Goodison Park’s 40,000 seats are filled.

For League Two Dagenham, the glamorous fixture is a double-edged sword. The club is expected to earn around £250,000 – but, if the tickets weren’t discounted, the ground full and the game on TV, it could be £500,000. By contrast, League One Sheffield United should earn over £1m from its televised match at the 75,000-seater Old Trafford.

Clubs have even taken to making money from ticketed live screenings of away games at their own grounds where they don’t have enough tickets for their fans; League One Scunthorpe United will screen Sunday’s trip to Chelsea.

But in recent years TV earnings – rather than gate receipts – have become the golden egg for clubs, as demonstrated by Sky and BT’s blockbuster £5bn deal for Premier League rights signed last year. The FA Cup is no different. The competition, famed for its “magic”, is screened in more than 100 countries (the Premier League reaches 200 nations) and draws millions of viewers; the second- round tie between Salford City and Hartlepool was watched by nearly 3 million, drawn by the added spice of a quintet of ex-Manchester United players co-owning Salford.

“Getting advertising access to the TV games remains very important,” said Andy Clilverd, commercial director at Stadia Solutions, which specialises in the digital hoardings that run along the sides of the pitch. “Advertisers don’t believe the magic of the cup has worn off – we have not seen a slackening off in rates.”

Mr Clilverd pointed out that although accommodating swanky advertising in tiny grounds can be tricky, the clubs are only too happy to surmount the obstacles. “Power and space by the pitch are often issues but the clubs love it as it makes them feel like they are in the big leagues.”

He added that opportunistic advertisers including sports betting companies enjoy swooping in when small teams progress in the tournament (for example, The Sun sponsored Kidderminster Harriers for its match against Sunderland in 2014). The official cup sponsor Emirates receives a guaranteed amount of ad space for each game.

For League Two Cambridge United, the impact of last season’s match with Manchester United has been long-lasting. It is estimated that the original 0-0 home draw made the club £500,000, and the replay earned it £1.2m – outstripping the business’s annual turnover. The money was invested in upgrading the club’s facilities (chairman Dave Doggett joked that the toilets and tea bar were the top priorities) and increasing staffing. The commercial director Liz Slack said: “Cambridge is not a natural football city, but it put us on the map globally. The cup basically means you can accelerate your existing business plan – it’s a bonus.”

The club sold a flood of half season tickets following the tie and has kept those extra 1,000 fans; it now regularly records attendances over 5,000. It also snared a string of local sponsors and community partners as a result, most notably the drug giant AstraZeneca.

The prize money for a giant killing is often overlooked when football’s minnows claim a big scalp. According to the FA, more than £5.5m has already been doled out to clubs (including broadcast earnings) over the first two rounds of this year’s competition – and for the lowest-ranked sides left in the tournament, a game-changing £67,500 is on offer for third-round victors. A win in the final is worth £1.8m.

The debate over the lasting romance of the cup, occasionally pitting teams of butchers and postmen against the world’s best, still rages. But for the accountants, the competition retains its allure.