Thomas Sandgaard: “break even scenario would not be achieved by cost cutting.”

Members of the CAST board held a meeting with Thomas Sandgaard via Teams on Wednesday evening to raise with him the issues and concerns of fans that we had outlined in our letter of October 13th

The meeting was attended by Heather McKinlay (Chair), Heather Alderson (Vice Chair), Paul Breen and Richard Wiseman (Secretary) from CAST, Thomas, Raelynn Maloney and Tom Rubashow from CAFC, and the CAFC Fan Advisors Lucy Bishop and Lewis Catt.

Change of Ambition

We described how the adjustment of Thomas’s ambition (from Premier League in 5 years to cash-flow neutral next season) had been perceived as a lack of ambition and perhaps a desire on his part to sell the club. We said that we were sceptical about opportunities for significant increase in revenue and therefore envisaged cuts to the playing budget and more player sales. We feared this could lead to a vicious circle of growing supporter apathy, declining attendances and decreased revenue.

Thomas stressed that his ambition was still the same as when he became owner. He conceded that the time line might be longer and that there were no guarantees of promotion, however much money was invested.  He said that it might take a couple of seasons to get the playing style right and consistent. He noted that we have the fourth highest playing budget (and higher than last season) and that, if we had beaten MKD, we would not be far off fourth position.

He said that, even in League One, there is “the possibility of increasing revenue significantly” but that “we are not blessed with an organisation that has been able to do that for many years”. He believes that there is a lot of potential for growing revenue and that, although he didn’t want to go into detail, there are areas showing good progress. He is confident that losses can be halved in one more season and break even achieved in another season and a half after that.

He stressed that “the break even scenario would not be achieved by cost cutting.” However, he thinks the cost base is a “little too much for where we are at” and he has taken some steps to reduce costs where he felt it was appropriate (eg reducing men’s first team travel costs). He now approves all expenses and he thinks that there are “a thousand more business principles which need to be applied throughout the club so it can run more agile”.

He discounted the idea of imminent sales of young players to balance the books - using Miles Leaburn as an example. He strongly believes we should encourage young players to develop their potential and value at Charlton and he is pleased that Miles, for example, is on a long contract.

He conceded that, when results are not going well and he is “making another wire transfer", he does sometimes ask himself “where is this going?” but overall he emphasised his optimism and continued ambition. He could understand where the perception of a declining vicious circle came from but he stressed that “I’m much more optimistic than you from outside”.

He reiterated that he is still enjoying being the owner of CAFC but the enjoyment has changed in nature. The energy and excitement of being part of saving the club has been replaced by being close to the football action and by the satisfaction of gradually turning the business side round. He said that “unfortunately we have a very tight labour market to find good employees and that makes it go a little slower than I expected”.

Sometimes he feels he is “borderline being treated like Roland Duchatelet” but he recognises that “that is not uncommon in English football”.

He is not interested in inviting external investment to share the financial burden. He has “other sources of income that he could leverage”.

He summed up by saying: “The right thing to do is to spend most of the money on the men’s first team because that is what will create the future for all of us."

The Academy

We noted that the Academy is a major source of pride for Charlton fans and is also great business. Nevertheless we look over our shoulders at Palace’s new Academy and Millwall’s plans to expand into Kent. We expressed our concerns about recent cuts. We asked Thomas for his vision for the Academy now that the Category One application had been turned down.

Thomas said that funding of the Academy had been “pretty constant, maybe going up a little bit” for a number of years and that, after conversations with Academy staff, he felt that the money could be distributed “a little smarter”.

He said the Academy had grown “organically and very successfully” without a great deal of scrutiny from above. He said there were two key factors:

  • The catchment area is a huge advantage but most importantly it is “really good coaching that gets the fundamental principles of the football game into those young kids as early as possible”.
  • He said that he thinks we are becoming "a lot more professional in how we leverage our investment into the Academy.” He noted that “there are many examples in the past where we have not leveraged that the right way” in terms of realising income from the development of young players but that we are now focussing on “ensuring that we don’t do deals that are less than optimal”. The Academy has been “marginally profitable but not to the tune that it really could have been”.

He was very pleased that the playing style in the Academy is now close to that of the first team so the transition is easier. “They much more naturally fit in now.”

He is determined to continue to push for Academy One status but he “would not be surprised if we wait with another bid until our men’s first team is in the Championship”. In the meantime he hopes that we will continue to belie our League One status by outperforming the Academies of many higher placed clubs.

January Transfer Window

We asked what we could expect of the window to build on some of the good things we had seen this season.

Thomas said he would be meeting with Ben Garner probably later this week to concentrate on “getting the bigger framework right”. The plan will certainly be to try to get deals done early so it doesn’t all come down to deadline day. He said “We have learned a few things throughout the season and we are going to try to strengthen.”

One of the things is that “we don’t have a whole lot of loan players so it makes that equation a little different”. He is confident that Sessegnon and Rak-Sakyi will not be recalled by their clubs.

He said that in the summer we strengthened the squad on the wings and in the midfield and we did as much as we could – we lost out on a few deals - to strengthen our defence. We could potentially strengthen our central defence even more and at left back but January is not the easiest time and it will depend on who is available.

He said he was surprised how well Scott Fraser was performing “in a more defensive role than he expected he would be playing in”. He said he wouldn’t be surprised if we see Conor McGrandles playing more once he is fully fit. He said it is good to see Charlie Kirk finally getting some confidence back.

He agreed that we “are very thin on the striker position”. Jayden Stockley “is the captain and he is a great personality. We have switched to a playing style that is a little less in the air where he has strengths and maybe being able to call on him for the right sort of games would be a better position to be in”. He agreed that we do need more options up front although “we do finally have Chuks Aneke back and we do feel that we have Chuks’s injury problems (and Ryan Inniss’s) finally figured out” so that they can have more impact. He agreed that “an alternative who can run in behind” would be good. He said that some people appreciate a player like Conor Washington but he felt that he wasn’t a natural goal scorer and that he didn’t press as effectively as it might have appeared.

He stressed that he wants to strengthen the squad and some of it “might cost money” but he added that “We will see what is available”.

He said it was usually Steve Gallen and Martin Sandgaard who come up with names because they are out scouting, but that no-one would be signed if Ben was against it. He confirmed that Ben “had a major role – 25% - into decisions”. He said that in 80%-90% cases all four agree for or against and that no-one would be signed unless all four agree. He said that Ben Garner was happy with this process. It was important to ensure that the right personalities were being recruited and that they fit in to the playing style.

Although the performance against Milton Keynes was one of the worst he’d watched he feels that the squad has improved over the transfer windows and we have now gone through another season of “slowly improving on the player qualities”. He described the calibre of players signed as much higher than those released overall. We have “better players than we had last season”. He added that they “had dramatically improved the atmosphere and professionalism in the dressing room over the summer”.

Non-Football Management

We asked Thomas about his long-term plans for the structure of the organisation in the light of his continuing role as CEO and the upcoming departure of Finance Director, Emma Parker.

Thomas said his aim was to continue to build a strong organisation. He said that we do have some very strong employees but that the labour market was tight and it wasn’t easy to find good quality employees. There is “quite a way to go to get the organisation to where I’d like it to be”. He wants to do better on the hospitality side, ticket sales and in a few other areas. “Sponsorship is doing well and has pretty much trebled in the last few seasons."

He said that the job title of Emma Parker’s replacement was not yet decided but that the role in a club in our current position did probably not justify a Chief Financial Officer level recruitment. He said Emma had done a tremendous job and he wished her well in her new job.

In terms of the reports that the culture inside the club was aggressive he said that it was “deliberate to challenge staff and in the name of change [in culture]”. He said we need something different either through the people already employed or by new people coming in.  A “whole different culture” is needed or “nothing will ever change”. He regretted that “initiatives that are well meant are viewed as offensive and aggressive by employees or people who are outside of the organisation”.

We outlined how in general salaries for non-football staff tend to be lower when compared to other industries so the rewards must come in other ways such as working in a fun and pleasant environment. He said he had been through the same process in the company he runs in the U.S. and eventually it turns into a great place to work.

We suggested that two years into his ownership there is not a clear shape to the structure of the organisation on the non-football side. Thomas said that “we’ll figure it out” and that “you don’t need to worry about that – just turn up and cheer on the team”. He was clear that he did not need any business input from CAST.

Additional Points

  1. Thomas said that he was hoping to develop and strengthen the role of the Fan Advisors so that they were as well informed as possible and that fans could go through them for information and comment from the ownership.
  2. Thomas agreed to look at his schedule to see if a Q&A with supporters in late November / early December was feasible. We stressed that the chance for fans to have unfiltered access to Thomas from time to time was important – for example to nip in the bud the issues that arose from the tweets from Leo Rifkind and people purporting to be family members.
  3. Raelynn said that she, Tom Rubashow and Lewis had been in regular contact with Castore and that they anticipated positive changes in the club shop stock in the next few weeks. Lewis said that he was confident that more “affordable accessories” would be available soon. Tom confirmed that the white second kit had been used in the game at Walsall and would probably be used in upcoming games.
  4. We welcomed the reduction in some match day ticket prices for the rest of 2022 and urged Thomas to maintain this for the rest of the season. We said that few conclusions should be drawn from attendance figures as there were so many other variables in play. Thomas agreed with this. We again requested that the £3 surcharge be reviewed, at least returning it to the immediate hours before kick off rather than 24 hours beforehand.
  5. We brought to Thomas’s attention the successful event last week to celebrate the club’s return to The Valley. In particular we stressed that all the good things about the club we support were on display – there was warmth and optimism and a sense of unity between fans and directors.
  6. We asked when Thomas would next be present in person at a match and he replied that he is flying over for the Ipswich match.


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