Our new £25 million catering contract - who earns out of it?!!

[BensGrandad]

I should add 500k per season not match.

How did you come to that figure using what basic maths

 

[Herr Tubthumper]

It still amazes me how the club manage to lose money at just about everything they do.

This is not the case as the club were paid some profit from the Azure contract. It was in the press.

 

[AZ Gull]

I'm not convinced that 25million is being paid from one party to the other. Is it possible that that figure is, in fact, the estimated revenue that will be generated by the catering function over the 5 year period? If so, the actual profit (that will be shared by the club/Sodexo) will be significantly less (ie after all costs). I have no idea how the contract is set up, who pays for what, and how any profit is shared between the parties.

When Azure (Elior) won the original contract, it was reported as an 18million contract over 5 years. In Albion's accounts for 2011-12 (the first year of the contract), there was a figure of 1.25million for "Catering Commission" within turnover. We have no idea whether there were any catering costs, as the costs were not detailed at all.

Can anyone on here who works in this field provide an explanation of how these contracts are typically structured?

 

[Herr Tubthumper]

Wow if we pay them £5m a year.

No wonder why they don't care about the service with £5m locked up.

This is what I am thinking.

 

[Hippo25]

Total sales will be estimated at 25m, but profit margins will be low after staff, food and other operating costs. The catering contractor will either be paid a fixed management fee (club keep all profit) or will share profit with the club. If no profit is generated then obviously costs are too high and the contract is being mismanaged.

 

[Silverhatch]

There is no way that the caterer will not be paying some sort of minimum revenue guarantee (MRG) to the club. Azure's problem was that they could not make any money out of the contract because the MRG was too high! As mad as it might seem, given the moans about catering, there will be 'service level requirements' to meet and if the caterer consistently buggers up there will be remedies in the contract.

 

[somerset]

There is no way that the caterer will not be paying some sort of minimum revenue guarantee (MRG) to the club. Azure's problem was that they could not make any money out of the contract because the MRG was too high! As mad as it might seem, given the moans about catering, there will be 'service level requirements' to meet and if the caterer consistently buggers up there will be remedies in the contract.

Actually I am led to believe it was the other way round.....Azure was making more money than the club, hence the change......