|Dan Jones- Partner of the Sports Business Group, Deloitte|
|Profile of the week|
Monday, 03 December 2012 09:38
Dan Jones is the Global lead partner of the Sports Business Group at Deloitte.
His team of specialist consultants have worked with some of the highest profile sports organisations worldwide on strategic, governance, financial and commercial issues.
His clients over 15 years working in the sector have included America’s Cup, the ATP and WTA Tennis Tours, the British Horseracing Authority, British Cycling, Dorna moto gp, the FEI, FIBA, FIVB, IMG, the International Rugby Board, the MCC, the Premier League, the Ryder Cup, Sky, UEFA, UK Sport and the Volvo Ocean Race. He is also an experienced conference and media speaker on the business of sport.
What services does Deloitte deliver into the sports sector? Is this a growing business for you?
Absolutely, we decided about twenty years ago to first get involved in the sports sector, starting with football finance in the UK. Football is around half of our business, consistent with being the biggest sport in the world, but we now work across a wide variety of sports. We’ve come on with the industry itself, growing in three dimensions - from accounting into a full range of advisory services, from football into other sports and from the UK around the world. Sport remains a growing business for us.
We’ve taken services from being just an accounting type business to providing a full range of what Deloitte provides all industry sectors. I have a team of eighteen people, of whom about half have some form of accountancy or finance qualification, but half come from a variety of other business walks of life. One of the great strengths is that we have a very stable, experienced core to that team. There are half a dozen of us who have now worked together for twelve years or more now, so we got a very strong platform to build from.
How do football clubs compare to companies in other industries?
It is a different business. Your normal working assumption in any other business is that you aim to maximise financial returns to your shareholders and maximise profits to deliver that, whereas most football teams key objective is to maximise the emotional return to their shareholders, through winning matches.
The most important thing in football business planning is to be very clear about what you are trying to achieve, what you are willing to spend to achieve it and then sticking to it, but that’s also the hardest thing to do in football because you are in a market where the pressure and the results are constant. Every week, you are being judged very publicly on how you are doing. Another key thing in delivering success concerns the talent that you are able to recruit, manage and make perform as best as it can, and that talent is in an incredibly competitive global market.
How has football coped with the recession?
It has proved itself to be very resistant. That is born out of a couple things, the most important being the quality of the content. From a media point of view, it’s about finding content that people want to consume live and that has a big social element to it. Top level football is an event like no other in terms of its ability to reach an audience and to reach them live. Sport is the most valuable content there is and football is the biggest sport there is, so being in a top-level football competition is a good place to be.
There are other parts of the business that have been dented by the recession, in particular corporate hospitality, and to a certain extent, sponsorship. The biggest players and competitions have proved to be very resilient around sponsorship, but once you get below the biggest ones, the market is a lot tougher.
Having said all that, there is more revenue now in football than there has ever been and that is not just at the Champions League type level. There should be enough money to go around to have sustainable football clubs and competitions.
But, there have been a couple of noticeably high sponsorship deals recently…
The deals that have caught the most attention are from the biggest clubs and indeed the Premier League itself. It’s testament to the strength of the competition and the biggest clubs, who really engage people's emotions. That gives them great appeal and brands want to be associated with them.
All the money that comes into football is ultimately driven through fan relationships, whether that’s people coming through the gates, buying merchandise, buying TV subscriptions or people who have an affinity with that club. I don’t buy the idea that football has moved further away from its fans with all the money coming in.
What impact will the recent dramatic increase in Premier League broadcasting have on clubs?
The TV deals that have been done, the domestic deals in particular, have been spectacular and proof of the ability of the top level clubs to generate media revenues.
The biggest challenge is wages. The history has it that as fast as the extra TV money comes in, it goes out in wages. I have no ideological problem with the absolute amount of money that a footballer earns. I equally don’t have a problem with the fact that players get a very significant slice of whatever revenue comes in. Where it becomes a problem is when that slice is disproportionate to the point where it calls into question the viability and sustainability of the club.
What is needed is discipline. That’s where UEFA are coming from with financial fair play, that’s where the Football League is coming from with their own measures and it’s also the debate that’s going on around the Premier League table at the moment.