FA Cup Countdown: The luck of the draw

Some of the old magic has gone but, for small clubs, being paired with a Premiership giant is the difference between a rosy future and extinction

Beyond the possibility of giving a Goliath a bloody nose and maybe even knocking him over, a good FA Cup run by a minnow from the non-League or lower divisions can bring substantial long-term benefits. The romance is all very well, but it is the readies that make a difference to clubs' futures.

A spanking new stadium with bonus extras, and fame in the Far East to boot. An economic platform for a surge up the divisions and a shot at the Premiership. Salvation from extinction. These, respectively, have been the remarkable outcomes for Burton Albion, Colchester United and Exeter City from high-earning Cup runs to the third round or further in the past two seasons alone.

At plenty of other clubs, unexpected FA Cup cash has funded progress or kept creditors at bay, while this season's tournament has already made a modest but important difference to balance sheets even at clubs that have already exited. Salisbury City, who went out after two second-round games against Nottingham Forest screened on live television, earned enough from those matches (£200,000-plus) to cover ongoing ground improvements and leave a surplus for their manager Nick Holmes' push for promotion from the Conference South.

Undoubtedly, it is the third round - when the giants of the Premiership enter the fray, as they do this weekend - that really sets the juices, not to mention the potential earnings, flowing. Two fixtures this weekend stand out in that respect. League Two strugglers Macclesfield's trip to the Premiership champions Chelsea on Saturday is not being televised live, but will guarantee the Silkmen a healthy six-figure sum from their share of the Stamford Bridge gate money, whatever the result.

While Tamworth's televised home game with Norwich City at lunchtime on Saturday is no clash of the Titans, the ailing Midlands side - second bottom of the Conference - stand to make up to £250,000 from broadcasting fees, tickets sales and spin-off income. Should they win, there is always the chance of a truly massive pay-day in the fourth round.

"The FA's stated objective is to use the Cup to redistribute funds throughout the game and together the prize fund and the television monies represent a £30m investment in the competition," a Football Association spokesman says.

Tamworth's near neighbours in the Conference, Burton, happily stand testament to the benefits of the FA's philosophy, having cashed in hugely from playing Manchester United twice in the third round last season.

"For small clubs, the FA Cup really is a marvellous opportunity," says the Burton chairman, Ben Robinson. "The United games, after costs, netted us something like £900,000. That enabled us to spend a lot more money on our new ground [the Pirelli Stadium, which opened in 2005] and the Cup run had other benefits too."

Burton originally planned to spend £6.4m on their new home (paid for mainly by the sale of the site of Eton Park, their old ground) but have been able to increase that to more than £7m. A function suite holding up to 300 people and nine executive boxes have been added. Foundations for a hotel, restaurant and pub are in place, which will all help earn non-football income.

"If and when we go up to the Football League, we're ready in many respects," Robinson says. "And it's been positive more than just for infrastructure. If you draw Man United, who are still the biggest club on the planet, you draw interest from around the world. We even had a South Korean company that came over and made a documentary about us, about the impact of the FA Cup. That's all good for the club's reputation. Closer to home, we've increased our youth support by 25 per cent, having attracted people in."

Burton have also been able to invest more heavily in community work, such as a diploma course for aspiring young players to give them educational back-up, and an IT centre for local children. These also attract new generations of fans. And a lot of that is down to playing United, as the most recent balance sheet, published in November, showed. Turnover up from £587,000 to £2.25m. Operating profit up to £835,228 from a loss the previous year of £191,000. And investment in players? "We continue to strengthen gradually, as we always have done," Robinson says. "The Cup money has stood us in good stead for years to come."

At Exeter, who also played Manchester United twice, in the third round two years ago, the money they earned effectively stopped the club from going bust. Chronic financial problems had left them £4.8m in debt and with a company voluntary arrangement hanging over their heads when they drew United. A supporters' trust was in control, and had been working for 18 months to scrape together enough money just to keep to club afloat, but the prospects of settling the debt were poor. "We were in a difficult predicament, even after 18 months of intense fund-raising," says Julian Tagg, Exeter's sporting director and vice-chairman.

"Manchester United came along and we could fix things up. It's hard to say for sure that without that money we would had gone into liquidation, but we were on the brink before the trust took over and, despite all our efforts, we were treading water. Certainly, the money accelerated our release from the CVA, probably by three years or more."

The CVA allowed creditors to be paid some £800,000 to settle a percentage of the total debts and clear the slate. Two years on, they are on a solid footing in the Conference. "We've gone from being a club who owed a lot of money to a club with no money," Tagg says. "But that is progress, and it shows the huge difference the Cup can make."

Colchester witnessed the power of the Cup last season when they beat Sheffield United away and Derby at home to earn a lucrative fifth-round trip to Chelsea. They lost, but the run made them £1m (£750,000 from TV and ticket money against Chelsea alone), which was enough to cover the whole season's wages. Significantly, it allowed them to keep their squad together to win promotion from League One and then build in the summer to launch a so far encouraging assault on the Championship play-offs.

"The Cup was a very important part in an already positive cycle for the club," says spokesman Matt Hudson. "When the draw for the fifth round was made [at the end of January], it meant we could keep important players who otherwise might have gone at the end of the transfer window."

One was the right-back Greg Halford, another was the midfielder Neil Danns, who helped win promotion before moving to Birmingham. The finances also allowed Colchester to strengthen, bringing in the striker Jamie Cureton, currently joint top scorer for the Us. "The Chelsea game brought in pretty decent money," Hudson says. "The TV fee was £265,000, tickets around £400,000, replica shirt sales went up. And you don't budget for that. It all meant when we got promoted, although wages went up, we could handle it all better."

The wider implications include a new owner, the businessman Robbie Cowling, arriving in September, attracted not only by the success but wanting to accelerate plans for a new 10,000-seat stadium at Cuckoo Farm

A virtuous cycle indeed, although some clubs' situation is so dire even a Cup windfall cannot solve everything. When Scarborough drew Chelsea in the fourth round three years ago, they were already in administration and £2.5m in debt. "The game [a 1-0 defeat] made us about £500,000," says the club secretary, Derek Megginson. "It paid part of the debt but couldn't do everything. We still owe £1.7m."

Worse, financial problems meant relegation from the Conference and a points deductions and they currently sit second bottom of the Conference North. "We were in an enormous, awful mess before playing Chelsea," Megginson says. "Now we're just in a horrendous mess."

Tamworth's general manager, Russell Moore, says whatever happens against Norwich on Saturday, "any earnings won't be squandered. We don't live hand-to-mouth here. We're very frugal. Even £24,000 [from the FA for reaching the third round] makes a difference." The club's annual budget is around £350,000, so the Norwich game will cover 70 per cent. And if we win," Moore says, "we could do something really enormous."

Quite what remains to be seen, if and when the Cup weaves its magic this weekend.

Hitting the January jackpot: Three recent FA Cup 'winners' who filled their boots

CASE STUDY ONE: BURTON ALBION v Manchester Utd

GAMES Pirelli Stadium, 8/1/06, drew 0-0. Replay: Old Trafford, 18/1/06, lost 0-5

EARNINGS Burton of the Conference held United to a 0-0 home draw, in front of a record crowd of 6,191 at their Pirelli Stadium. They also earned £150,000 from live Sky coverage. The replay at Old Trafford made them another £150,000 from live television coverage on the BBC, plus 45 per cent of net gate receipts from a crowd of 53,564 (around £600,000 for Burton). Extra merchandise sales, hoarding advertisement income and FA prize-money took Burton's total earnings from the tie to more than £1m.

AND NOW? One year on, they are thriving, financially and on the pitch, lie fourth in the Conference and are chasing promotion to the Football League with excellent facilities ready if they manage to get there.

CASE STUDY TWO: COLCHESTER UNITED v Chelsea

GAME Stamford Bridge, 19/2/06, lost 1-3

EARNINGS Colchester, then chasing promotion out of League One, won 2-1 at Sheffield United in the third round and beat Derby 3-1 in the fourth to earn a trip to Stamford Bridge in the fifth round. The game was shown live on Sky, earning Colchester a £265,000 broadcast fee, plus 45 per cent of net gate receipts from a crowd of 41,810. Ticket prices were kept low (by Chelsea standards) but Colchester's share was still around £400,000. They also saw a rise in merchandise sales, and earned £60,000 in FA prize-money for reaching the fifth round. The windfall for one game was £750,000, and for their Cup run, £1m.

AND NOW? Their FA Cup earnings underpinned the rest of Colchester's season, which ended in promotion to the Championship. They currently lie in the play-off places for the Premiership.

CASE STUDY THREE: EXETER CITY v Man United

GAMES Old Trafford, 8/1/05, drew 0-0

Replay: St James Park, 19/1/05, lost 0-2

EARNINGS Relegation from the Football League to the Conference in 2003 sent Exeter's spiral of financial decline into free fall. They were taken over by the Exeter City Supporters' Trust, but the prior mismanagement had been so extensive that extinction seemed possible, even after a 2004 company voluntary arrangement to try to reduce £4.8m debts. Then City were drawn at Manchester United in the third round of the FA Cup. It was not televised but they took £653,511 as their share of a capacity crowd of 67,551. Their 0-0 draw brought them a home replay. It was televised and earned another £150,000 from live BBC coverage. They lost 2-0, but their total net income from the Cup was £834,690.

AND NOW? Much of their Cup earnings was used to agree settlement of all their debts in December 2005. Currently eighth in the Conference.

Cashing in on the Cup: Ways clubs earn money from the FA Cup

Prize-money from the FA

Prize-money starts with 129 winners of extra preliminary round games receiving £500 each. This increases for the preliminary round and four qualifying rounds (to £10,000), before the first round proper starts.

1st Rd winners (40) £16,000

2nd Rd winners (20) £24,000

3rd Rd winners (32) £40,000

4th Rd winners (16) £60,000

5th Rd winners (8) £120,000

QF winners (4) £300,000

SF winners (2) £900,000

Winners (1) £1m

TV money for FA Cup games per team (from BBC or Sky)

Live fee/Highlights fee

1R £75,000/£13,000

2R £75,000/£13,000

3R £150,000/£18,000

4R £150,000/£18,000

5R £265,000/£18,000

QF £265,000/£18,000

Radio fees (Five Live)

Full match (90 mins) £9,000

Half match (45 mins) £4,500

Quarter match (24 mins) £2,250

Ticket sales

45 per cent of net gate receipts to each team, 10 per cent to central FA pot.

Advertising hoarding extra income from home TV games

£10,000 to £100,000+

Other

Increase in merchandise sales, for example, replica kits, FA Cup, T-shirts, flags, etc; sponsors' bonuses.