Administrator
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This is taken from Ariel, w/c 9/1/06:
CLUB SELLS PRIME ASSETS TO AVERT CASH CRISIS
Albert Hall box brings in £500,000 and Brighton flat will have to go by Clare Bolt
Eighteen months of financial pressure have forced the BBC Club in London to sell its box at the Albert Hall for half a million pounds to stay in business. The sale by auction of the prized asset with a 900 year lease was completed at the end of 2005.
With the sale of the club's flat in Brighton also expected to go through soon, some members have complained that the 'family silver' is being sold off.
Despite the unpopularity of the sales, club chairman Andy Baker insists that without the disposals the outlook for the club would have been 'bleak'.
Income dropped 13 percent from 2004 to 2005 as job cuts helped push membership down.
'It is a case of doing the best we can, however unpalatable, to make sure that the club continues,' he says.
'We got to a situation where expenditure exceeded the income. We worked out that if we did nothing the cash flow would go into the negative and the club would be forced to cease trading.'
Each year the clubs in London and in the nations receive a total of £3m from the BBC, much of which is spent on charges such as rent and IT.
According to Paul Fiander, who is heading the Timeout survey into leisure provision at the BBC, a number of clubs outside London are also facing financial difficulties.
So how did a once flourishing set-up come to this? It seems that a combination of factors is to blame. Baker admits that the London club was not quick enough to act when BBC Technology was sold, and subs were no longer deducted from the payroll. This meant Siemens staff had to pay to rejoin and, unsurprisingly, most did not. Overnight the club lost most of its previous BBCT members.
It's a mistake that club executives were careful not to repeat when BBC Broadcast became Red Bee Media: they made a deal so that membership fees continue to be collected from the payroll. The closure of the Western House premises for two years during reconstruction also hit income badly.
In an upbeat interview with Ariel, Baker said the club is introducing a simplified booking and enrollment system online. Managers are also arranging deals for discounted West End theatre tickets to compensate for the loss of the Albert Hall box.
Restructuring started in 2004 and the club increased membership fees for the first time in three years (it now stands at £5 a year plus 0.3 percent of salary). Baker says the increase was a risk because 'the club is supposed to cater for everyone, from runners to managers'.
The ethos is to allow members to experience things that would be otherwise prohibitively expensive: the club still owns two yachts and has 40 sections in total. There are 16,336 members throughout the UK, including Siemens, LST and Red Bee.
Despite getting back on financial track, there are big challenges ahead, not least the 3700 staff post closures that will take effect between 2005 and 2007 are bound to hit membership.
Says Paul Fiander of the Timeout survey: 'We're not opposed to the club, but people may want something different from what is currently on offer.'
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