The Dons, who have published their annual accounts for the year ended June 30 2020, have suffered a £1.59m decrease in turnover from £15.928m to £14.335m, along with an operating loss of nearly £3m – close to three times the previous year’s figures.
At the same time, wages have risen from £9.24m to £9.77m, increasing the wages-to-turnover ratio from 58 per cent to 68 per cent. That figure could reach 90 per cent if supporters continue to be locked out of matches, with Cormack braced for turnover to plummet to just £10m and an operating loss of £5m.
Stressing that the club’s main dilemma is remaining competitive on the park while at the same time “facing a total collapse in income from gate receipts, corporate hospitality, and sponsorship on matchdays”, the Aberdeen chairman branded the club’s position “unsustainable”.
Cormack continued: “We were planning for an operating loss of around £2million in the 30 June 2020 accounts due to our strategy of continued investment in a competitive team on the pitch and in fan engagement to increase support in the future.
"This was with a view to building a long-term, more sustainable future based on investing in young talent and developing players through our academy to sell on at the right time to balance the books.
“The unforeseen but devastating impact of the coronavirus crisis on the latter part of the 2019/20 season increased that planned loss to £2.9m with projections for the current financial year showing an even more significant loss of £5m due to the effect of COVID-19 on the full season.”
Cormack believes that “further, painful measures” are a distinct possibility to safeguard the future of the club
Cormack added: “Despite a further £1.1m cash injection from our investors last month and a record player sale [Scott McKenna to Nottingham Forest for a reported £3m that could rise to £6m], our financial gap, due to the ongoing pandemic crisis, is widening.
"We are sustaining losses for every home game we play without fans.”
Hailing the players and backroom staff who have already taken wage cuts and deferrals as well as fans who have snapped up season tickets and taken out AberDNA memberships to help the club's football operation, Cormack warned that the lack of a clear pathway for spectators returning to football grounds could be “catastrophic” for some teams.
He explained: “The knock-on impact of no clear plan for the return of fans to our national sport, as we enter the second half of this season, will be catastrophic for many Scottish clubs as they look to generate significant cash from season ticket sales for next season, starting in March 2021.
"At Aberdeen this could require us being forced to scale back our operations, which would have an impact on the supply chain which depends on our matchday operations."
Cormack is also fearful about the impact the continued situation will have on the club’s work in the community, adding: “As a family club, at the heart of our community, we positively touch the lives of so many people of all ages and backgrounds, through programmes around education, health and well-being.
"It would be devastating if we had to pull out of these activities to reduce our outgoings. The Trust’s income has been drastically hit by not being able to fund raise at home games or make use of the community facilities at Cormack Park.”
Addressing top-flight teams bringing in new players, Cormack continued: “There may be a perception that Premiership clubs are coping because we recruited new players. The reality is that clubs which fail to invest in the product on the pitch become less competitive, jeopardising vital prize money and undermining revenues due to a drop in support.
“Investing in players is crucial to ensure a solid succession plan to get ahead of changes to the squad. We’ve achieved that during both the recent transfer windows.
"We must continue to invest in young talent, including through our academy, with a view to monetising players, like we have done with Scott McKenna.”
Aberdeen benefited from a crucial cash injection of more than £3m during the early days of the pandemic, adding to nearly £20m of investment since June 2017. This allowed the club to build Cormack Park debt-free, with around £7m ring-fenced to cover losses.
The Pittodrie chief is desperate to see supporters return to the stadium sooner rather than later, especially after a small number of fans attended Aberdeen’s home game with Kilmarnock in September.
Cormack is calling on the authorities to take urgent action to help bridge the coronavirus-induced funding gap.
He said: “The only way to [stop haemorrhaging cash] is by getting fans back into Pittodrie safely, sooner rather than later, so that we can plan for critical matchday income and cash from season ticket sales.
"We are doing everything asked of us by the Scottish Government and the footballing authorities. We had a very successful test game with 300 fans, where we demonstrated we could easily have accommodated significantly more, safely.
"Scottish clubs and our footballing authorities must have urgent, constructive and meaningful discussions with government that acknowledge our socio-economic impact, recognise our plight and deliver a clear plan and roadmap towards a return of fans.”