by Tim Stillman
Because I’m not a proper journalist I didn’t have a dictaphone handy for this event. Gingers4Limpar had his shiny laptop, but I’m not as moneyed as he is. So I took all of this down via my own fair hand with pen and paper. It’s as close to verbatim as I could possibly get it, but the meanings and intentions, I am very confident, are solid.
On Monday evening, the Arsenal Independent Supporters’ Association held a Q & A session with Arsenal Head of Marketing Tom Fox and Arsenal’s Head of Communications Mark Gonnella in the Dial Square suite of Club Level. Some questions were submitted by paper, some came from the floor. The meeting opened with Mark and Tom introducing themselves and outlining their roles.
TF: The role of the commercial team is to generate as much revenue as possible for the club so that we can put it into the football side, which is what the club exists for. There is so much global potential for Arsenal and we want to raise all the funds we can for the club.
That involves the club’s retail operations, sponsors, commercial partnerships, the media business of Arsenal media and match day hospitality. Our job is to drive as much of that revenue as possible and make it available for the football side.
MG: I’m the Communications Director at Arsenal and that broadly means communicating the club’s message globally. I’m a diehard football fan and an ex journalist, communications and football have been my life so this is something of a dream job for me. My job is to manage the messages that come out of the club.
Q1) What is your view of the viability of a salary cap in the Premier League?
TF: When I first arrived at Arsenal 3 years ago, one of the first things I did was to speak with the AST. I had just come over from the States and I knew nothing about football or how it was structured. The big difference that struck me coming over here was the difference in structure in terms of salaries. My view is that salary caps are good because they take a club’s largest expenditure and limit it. Salaries are the least rational expenditure for a club.
But it’s difficult to enforce. For a start, it’s hard to tell a club that’s fighting relegation in January not to dip into club funds that they may not recoup if they’re relegated. We have high hopes for UEFA’s Financial Fair Play regulations but that’s difficult to enforce in the Premier League. It would then become difficult for English clubs to compete for the best talent in a pan European and global competition. It’s difficult to implement and get everybody in Europe following the same guidelines. It makes sense but it’s difficult to implement. That’s why Michel Platini has hired something like 80 accountants and lawyers to craft FFP.
A salary cap probably wouldn’t work in the Premier League, though I do like the idea of controlling that cost line and putting the money spent there into club infrastructure. In the U.S. there are agents that broker contracts, but there are no transfer fees. Ordinarily, in the States, if a player leaves a team with four years still on his contract, those terms come with him to his new team.
Q2) When you arrived at the club three years ago Tom, you used the term “franchise” to describe Arsenal. Do you realise now why that made people uncomfortable?
TF: Yes, absolutely. I didn’t know much about English football at the time. In the U.S. this is a normal term in sports. I remember Sue Campbell, who has worked at the club for many years, corrected me when I called the pitch the “field”, the changing rooms the “locker rooms” and referred to the stadium as “the building.” I understand now why people in England found the word franchise offensive and you wouldn’t catch me saying it again, that’s for sure.
In the U.S., sports is entertainment. The deal is that, when you pay money for admission, we’ll entertain you from the minute you get to your seat till the second you leave, through half time shows, displays, dancers on the field and what have you. The difference here is that it’s much more about the connection supporters feel with the players. It’s all about a supporter’s relationship with the club and feeling as though you belong. Now I’m not sure they appreciate what they lost out on in the States when they chased the revenue. I’ve experienced English football and feel US sport misses that. I feel it a lot more now than I did when I arrived.
Q3) Generally I like how the club communicates. But occasionally a player will come out and undermine the club with an interview he might give the press. How does the club deal with that?
MG: Our primary channel for communications is the website and Arsene Wenger is the prime communicator. The difficulty is that sometimes we’re talking about people’s lives and we can’t discuss their personal terms, the same way you wouldn’t expect your company to publicise your personal information. We’re aware of the Sagna interview- and this sort of interview usually seems to come out in an international week- and for something like that we’ll first contact the player to see how accurate it is. We checked with Bac and he indicated it (The L’Equipe interview) was an accurate reflection of what he said.
It’s a shame it came out when it did, because there was no Friday press conference for Arsene Wenger that week for him to be asked about it and update. But issues such as this are dealt with by the manager; it’s not right for Comms to step in on these things because it’s about an individual’s views. We work very hard with players about how to deal with the media and 90% of the time, they are great ambassadors.
Q4) I’ve been an Arsenal fan since 1968 and to me, Arsenal play in red shirts and white sleeves at home and yellow and blue away. How do the club justify blue hoops in the home kit and a purple away shirt?
TF: In fairness, the blue part of the home shirt has been there through history. I can’t say I was around at the time, but I looked through images of every single Arsenal home shirt when we were sanctioning the design of the new home shirt and there was a five or six year period where a blue trim appeared on the shirt every year. Our job in marketing is to maximise the revenue so that we can fund our football club against teams with unlimited resources.
We liaise with our kit supplier Nike and we can’t limit the design scope too much otherwise it’s too difficult to come up with a new design. We do set some ground rules. For the home shirt, we say it has to be a red shirt with white sleeves. But beyond that, Nike needs scope with the design, also so that they can sell the shirt in China, the U.S. etc. We’ve done a two year home shirt this year and we’re the only club in the world to do that.
We understand the connection with yellow and blue for a home shirt. It will come back, but other fans of other ages in different parts of the world will want something different. For instance, we’re told the purple and black kit is selling well with younger kids because it goes with current fashion. We need to ask ourselves what the away kit is and allow ourselves to take a few more risks. The simple answer is that we need to sell as many as possible and we would disadvantage ourselves by not changing it. If it’s not sufficiently different to the last shirt, it won’t sell.
The home shirt will stay more traditional, but with the away shirt we’ll take more risks and it will change. The yellow will reappear from time to time, but we need to do something different. We try to limit the disruption where we can and that applies to the home shirt too.
Q4) Arsene Wenger has always been notoriously sceptic on far flung pre season tours. How did you persuade him to go with the Far East tours and are there any plans for a tour to the U.S?
TF: Much as I would like to take credit for persuading him when Ivan Gazidis had talked with him so much about it, I really can’t. Arsene is a smart man. My theory is that he wasn’t receptive initially because it was tough to do and he didn’t see the commercial team to maximise the potential. Now he sees a robust team able to capitalise. He understands that this is part and parcel of the game at our level now. We need to see this from the point of view of our global fans as well as sponsors and secondary partners.
Arsene said he felt this summer’s tour was very well organised when he was asked at a board meeting. His only complaint was that the seats didn’t go flat on the plane and he wanted the players to be able to lie down on the flight, so we’ll make sure that the seats go flat next time! But if that was his only complaint, we’ll take that. Our job is to make it as painless as possible for him and the team because their preparation is the primary concern.
There then followed a short video entitled “THE TOUR IN NUMBERS” in which certain statistics were reeled off relating to this summer’s tour of Asia. Including the 140,000 spectators that saw the team live, the 160 million potential TV audience in China, the 6 million hits on the Chinese version of the official website and the 53 events that the club organised in eight days on tour.
TF: The tour was very well organised, we had players making appearances in different cities at any one time for our commercial partners. Players were never kept a minute longer than scheduled so that Arsene could give them proper rest and recuperation time. 95% of our revenue growth will now come from overseas. We will be taking the things Arsenal represents into the international market and convincing people that this is a club to get behind.
A brand attaches themselves to you because you do work they can’t do for themselves. If we have a presence, then that attracts brands to invest in you. If you’re a company that wants to get its brand message heard in China, but you’re struggling to get that message out, Arsenal can do that better than a TV company or a washing machine company because Arsenal is seen as more interesting to people. That’s the story we’re trying to tell. Companies can tap into our ability to drive that. By not sitting in Austria, that’s what we’re doing. We can convince brands to affiliate with us and offer that engagement.
5) Shirt and kit sponsorships are up for renewal in 2014, where are we with that? Also a comms issue when Gazidis said season ticket prices had frozen when they’d actually gone up for Club Level. As well as this, the cheapest sit down meal in club level rose 30%. Are there not alternative methods of revenue driving?
TF: The club level suite is used for catering and events, but neither is particularly lucrative. We admit to mixed success on catering. We were able to put the price of a pie down from £4 to £3.30 on the concourses. The quality of the food is good we think, but we’ve possibly fallen down on the value. That’s certainly what we’ve gathered from fans in our research. Food doesn’t make the club an awful lot of money, the most important thing for us in Club Level is to sell the seats.
We don’t want to be losing ticket sales there because of the food, which doesn’t make us much anyway. We’re still searching for the balance. 95% of our revenue growth will come from ‘outside.’ It won’t be coming from match day supporters as it probably did when we first moved to the stadium. Some of our catering costs have gone up, which accounts for some of the price rise.
In terms of sponsorship, we have 2 years left on the shirt deal with Emirates and the kit deal with Nike. The current deals were critical at the time when they were struck due to the stadium financing which I know everyone has heard all before and doesn’t need me to repeat. I can’t predict exactly what we’ll renew at because that work is ongoing. What I can tell you is that there’s plenty of interest. We currently have guys in South Korea, India and the U.S. telling our story and getting a sense of the market place.
Market dynamics are complex, we can’t just say “this club sold their shirts for this amount and we’re better than them, so we deserve this much”, brands have to want to invest. 3 years ago when I arrived we had one full time employee and two agencies that dealt with this sort of work, now we have 13 full time employees working on it and they are of a very high calibre. But Manchester United started the journey we went on 3 years ago some 8 years ago now and they have 80 full time employees working on these deals.
The guy leading this just sold £700m worth of partnerships for London 2012. He’s a big football fan and he’s working very hard on positioning us and packaging us for partnerships and sponsors. As for the stadium naming rights, that will be very hard to resell because it will probably always be known as Emirates Stadium now. Or “Ashburton Grove” to those of you that don’t want to call it that!
6) You referred to the gap with Manchester United commercially. Is it acceptable that a club like Arsenal let that gap grow for so many years? Has that made your job harder? To put it simpler, that gap in revenue is losing us top players.
TF: The club was focussed very much on the stadium move which was supposed to close the gap between us and other teams. Other clubs weren’t busy building stadiums so they were able to focus their commercial operations. But we’ve still been successful in the craziest time economically in the history of the sport. We’ve stayed competitive and now we have the opportunity to close that gap, we can compete even better. Both on the back of the new TV deals, new sponsorship agreements which will be signed in the next 18 months and FFP will create a lag in the big spending clubs.
Q7) 7 years ago there was a large waiting list for season tickets. That list has now diminished. Shouldn’t there be more loyalty and reward for season ticket holders? For instance with cup final allocations and higher discounts?
MG: The challenge is to balance the need to recognise loyalty with demand. The waiting list is still very strong. But for instance, the season ticket price for renewing members was lower this year than it was for new season ticket holders. We worked closely with AISA and the AST to create new ticketing categories for fans who were feeling priced out. But we know that we can’t please everyone on this matter.
TF: We also have to consider that there are different measures of loyalty. There’s the guy who’s been a season ticket holder for 20 years, the person that bys the short the first day it comes out every year, the person that goes to every away game, we need to understand each measure and reward them. The club is currently building a database of our fans with guys from IBM to understand our fans and recognise different loyalties.
For instance, there might be a young fan who has gone to games throughout his youth, but when he reaches adulthood, he can’t afford a season ticket just yet. We need to maintain that connection with that supporter until such time that they can commit to a season ticket. It’s a project for us on how we understand different fans. As far as Cup Finals go, that’s a basic math problem. But we can see what we can do in different ways.
Q8) Think the club has made a grave error in not categorising prices for U-21s and over 65s for instance. Different pricing categories for red and silver members are to be welcomed but how has that benefitted gold members? And finally, how much of our transfer kitty is available to Arsene Wenger? Many supporters were confused as to how Alex Song, for example, was transferred for £15m in such an inflated market.
TF: I always consider it a sign of the apocalypse when an English guy asks an American for his opinion on a footballer! I can’t answer the question about Alex Song; I’m not remotely qualified to answer. That’s the manager’s call and if that is ok. with him, that’s good enough for me.
All of the money the club makes is invested back into the club. None of it leaves the club, no dividends are paid. The money is invested; some of it in people and some in systems, like the guys from IBM and the CRM system, but it’s all reinvested and is available to the manager.
Q9) I always hear from the club, every year, that Arsene Wenger is not limited in what he can spend. Yet every year we turn over profit in the transfer market. I’m tired of the bullshit we hear from the club, when is someone going to tell the truth?
MG: There is money available to Arsene, no money leaves the club. But he doesn’t spend for the sake of it or just to get a headline. You’ve heard him say he will spend if he sees quality. We back his judgement on that. If you look at the market you see there wasn’t much movement overall. The money is still there, it hasn’t gone anywhere. Arsene is qualified to make that judgement.
The meeting then ended with a short video on the Arsenal Foundation.
Follow me on Twitter @LittleDutchVA