Many of my articles start with a premise that there is something wrong in the world of sports. These tend to be topical issues that have come up or perhaps have vexed me for a little while and which I believe need to be debated. It made me think that perhaps I needed to offer some ideas as to how this growing and vibrant sector could accelerate. It occurred to me that in the world of the sports franchise the place to start is not in the commercial team but actually a level up at the Board.
I spent a little time going through the majority of the EPL football club boards and came away with a view that they follow a similar vein throughout. Chairman (often the owner), CEO, family member, long term club servant and maybe the Finance Director. The boards are therefore limited in value, focus too much on the football and not enough on the club and have limited ability to help grow the club.
Considering the fact that clubs are multi-dimensional businesses operating in an increasingly competitive entertainment and leisure world, the need to update the EPL board model feels like a great first step. It needn’t be overhauled overnight, but taking steps to improve its independence, governance and talent/capability can all add real value both on the sporting and commercial side.
Before you can look at the board you must examine the role of the owner. This needs to go back to what they really are – the major shareholder, not a Chairman. The reason I believe this is that there is all too often a chance that an owner will make decisions that may not be in the best interests of the business simply because they cannot step back from it and approach the decision-making process from an objective perspective.
Having an independent board who are clear on your interests as the majority (or only) shareholder. As a shareholder there are ways in a company’s articles that you can voice your displeasure and implement change. Making this fundamental change may be difficult but ultimately is likely to be highly beneficial. If it is not taken, then building a strong board could be more complicated as Non Execs may feel they have no real voice.
So how would I set up a board for a sports franchise:
Independent Chairman – This should be someone with pedigree, and I don’t mind if that means in business or in sport. They should be independent of the Club but very clear in acting as the steward of the club on behalf of all its stakeholders and primarily of course representing and understanding the view of the shareholders.
They should be the conduit between the club and the ownership and make sure that the executives are clear on their strategic imperatives. Critically they must have the stature to do what is best for the shareholders and have the ability to make clear objective decisions in what can be a very subjective world.
Chief Executive – Not sure this needs an explanation, but clearly, a board needs a CEO. My preference is for someone who has come from outside of sport (David Gill being a great example) but equally, we have seen those with Sport Industry perspective thrive (Ivan Gazidis comes to mind with his MLS background)
Chief Financial Officer – Personally I don’t understand any board that doesn’t have a proper CFO sitting on it. Making sure a club is keeping a careful eye on its finances, reporting them clearly to the board and raising issues well ahead of schedule are critical to any business – and sport is increasingly at this level big business.
Managing investments in players and infrastructure have big consequences and need to be reflected on in an appropriate fashion.
Sporting/Technical Director – I have always been a believer in this role and separating it from the Head Coach/Manager role. It could, however, be the Manager, but that person is probably best focused on doing what the day job calls for and leave the reporting and board related issues to their Sporting Director.
This is in other terms the role of the Chief Product Officer, the football is the product and there should be both a short and long-term plan for how to improve it, where is the investment going in terms of sports infrastructure, the sport science department and all the other facets of the delivery of a solid performance product on game day.
Non-Executive Directors
It can be difficult for sports clubs to attract the very top talent when you consider what the most progressive companies below can offer in terms of location, salary, and benefits – at the executive level. However, when looking for Board Directors you are not going to be their primary form of income. You are looking to bring in senior people who have the energy and appetite to contribute in an area that they more than likely have a real interest in.
This offers enormous potential to boost your board with high-quality talent at a fraction of the price of bringing them in as an executive. I have listed below high profile company examples but that is purely as everyone knows who they are.
If you use a decent headhunter you can find SME’s in all the spaces listed below that have amazing talent and who might be more appropriate as they understand the size of the company you are and the budget constraints.
Community/Social – Sports are the ultimate in community businesses. Originally it was all about the local community and indeed the vast majority of tickets are still sold within 50 miles of any venue. At the EPL level, the community though is now national and international. How to maximize that community and build it has to be a key objective of many of these clubs.
Fortunately, there are a whole host of international businesses that focus on exactly that, have built phenomenal global user bases, built communities and generated revenues from business models never previously imagined. With the growth of AR and VR these social communities are going to change once again and tapping into this social world would be something I would look at.
Companies that come to mind obviously feature the well-known brands such as Facebook, Snapchat, Twitter, LinkedIn and Instagram. There are a whole host of others out there that its not worth me listing them all. The benefit of some of these is that they are often also content businesses so could tick off two boxes and keep the board to a sensible number.
Brand/Sales – Even before Financial Fair Play came to play, selling more was important but it has been exacerbated in the new world of FFP. Great salesmen are not easy to come by, but bringing in a senior person who is well connected in this world with a wide ranging black book who can open doors can be what slopes the field in your direction. Equally the bigger clubs like to refer to themselves as ‘Brands’, yet as I have written before have rarely acted as such.
At the board level bringing in a senior brand executive who can hold the organization to task, show how to build a brand, employ their knowledge and skills and leverage the enormous potential of the broadcast deals and fan base that exist. Similar to brands like Salesforce, PepsiCo, Ferrari or Red Bull.
Tech/Digital/Data – This area is slightly harder for me to define as it can be a very wide ranging area. To me, technology is never the solution but really more of an enabler. It could be instrumental both on and off the field as technology increasingly underpins more and more in our lives and the connected world gets ever smaller – the decreasing cost of chips means soon they will be everywhere.
That can mean this role can be fulfilled by someone who is a generalist or someone who specialized on either the consumer or performance side of things. Areas I would look: Google, Apple, Garmin, Withings, IBM, Intel, ARM and so on. I know fewer companies in the data space but Umbel has always been a favourite and I prefer smaller standout businesses to the giants in this area. Amazon of course tick all the above boxes.
Content – Clubs may be community businesses but they are also very much content businesses. The audience is diverse from the older more stable and reliable fan to the newer, younger and more transient ‘fan’ who is looking to be entertained.
With live rights almost universally sold by someone else, which restrictive covenants and players reluctant to provide much time to corporate content requirements, it means that clubs need to get cleverer at how they mix things up in short form to long form content. Vice, LadBible, Buzzfeed, Mother, Hill Holliday all come to mind but again the options are all out there.
Sports – Of course, this can’t be overlooked, however if there is already the Sporting Director present on the board then this can be left to one side. If the club doesn’t have a Sporting/Technical Director bringing in an expert from another Sport could be of enormous benefit.
To me an EPL club could potentially benefit from having an Olympic Performance Director on the Board or bringing in someone from a US sport that tackle issues in a different way and can raise questions perhaps not yet being asked in the UK. Contrasting opinions and views are a positive in this space. Sir Dave Brailsford and Sir Clive Woodward stand out but there are many others to approach.
Board Observer (Not necessary but has its advantages) – The fan is an important touch base and whilst I don’t believe they should sit as full board members, there is still a role they can play as an observer providing feedback to the board on fan experience and expectation but also increase transparency the other way whilst protecting the sanctity of the board room.
Why not a full board seat? In all honesty, its because as a fan there can be a lack of objectivity and rationale to their decision making. This doesn’t negate the importance of their voice but can impact their ability to make decisions.
I am a believer that a board should be no more than 7 people in this type of size business – and to me that would be 3 executives, 3 non executives and a Non-Exec Chairman. Preferably with all the non-executives being Independent.
You can mix and match what you then think is appropriate for you but if you make this bold first step you will be on the way to unlocking some of the full potential your club has to offer.
