£20M Losses
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Managing Director Ian Ayre today reassured Liverpool supporters the Reds can look forward to a bright future, despite the fact that the Club will later today report a loss of £20m for the year ending July 2010.
The end of year accounts, which will be published at Companies House later today and cover the period August 2009 to July 2010 under the ownership of Tom Hicks and George Gillett, show revenues rising to £184m, but net debt increasing to £123m and incurring interest payments of £17m.
However, the purchase of the Club by Fenway Sports Group in October 2010, three months after the period these accounts cover, has heralded the start of a bright new era at Anfield, with considerable positive change already evident both on and off the pitch.
"As much as we are all aware of the difficult circumstances surrounding these accounts and that period in the Club's history, everyone in the world can now see just how much has since been achieved," said Ayre.
"Since the end of the last financial year, Fenway Sports Group has paid off £200m of acquisition debt from the previous owners, dramatically reducing interest payments as a result and meaning we are able to invest more revenue in the team rather than servicing debt. We have also enjoyed significant commercial growth since these accounts were finalised, including our shirt sponsorship deal with Standard Chartered, which was the largest partnership contract in the Club's history.
"On and off the pitch since the end of the last financial year, the picture is an improving one as we focus on growing profitability and strengthening the First, Reserve and Academy operations. We had an extremely successful January transfer window which saw the Ownership and management teams working closely to bring in some high quality players.
"We have also focussed on reducing the average age of our squad and are delighted with the progress of a number of our younger players who have come through our revamped Academy operation.
"The Club is now in an excellent position to move forward and all of us can approach the future with optimism. "
Managing Director Ian Ayre today reassured Liverpool supporters the Reds can look forward to a bright future, despite the fact that the Club will later today report a loss of £20m for the year ending July 2010.
The end of year accounts, which will be published at Companies House later today and cover the period August 2009 to July 2010 under the ownership of Tom Hicks and George Gillett, show revenues rising to £184m, but net debt increasing to £123m and incurring interest payments of £17m.
However, the purchase of the Club by Fenway Sports Group in October 2010, three months after the period these accounts cover, has heralded the start of a bright new era at Anfield, with considerable positive change already evident both on and off the pitch.
"As much as we are all aware of the difficult circumstances surrounding these accounts and that period in the Club's history, everyone in the world can now see just how much has since been achieved," said Ayre.
"Since the end of the last financial year, Fenway Sports Group has paid off £200m of acquisition debt from the previous owners, dramatically reducing interest payments as a result and meaning we are able to invest more revenue in the team rather than servicing debt. We have also enjoyed significant commercial growth since these accounts were finalised, including our shirt sponsorship deal with Standard Chartered, which was the largest partnership contract in the Club's history.
"On and off the pitch since the end of the last financial year, the picture is an improving one as we focus on growing profitability and strengthening the First, Reserve and Academy operations. We had an extremely successful January transfer window which saw the Ownership and management teams working closely to bring in some high quality players.
"We have also focussed on reducing the average age of our squad and are delighted with the progress of a number of our younger players who have come through our revamped Academy operation.
"The Club is now in an excellent position to move forward and all of us can approach the future with optimism. "
Seems to me that there are a lot of positives to be drawn from these accounts.
T
the_khl
Guest
[quote author=doctor_mac link=topic=45212.msg1327233#msg1327233 date=1304595428]
Seems to me that there are a lot of positives to be drawn from these accounts.
[/quote]
Your avatar is 'winning'.
Seems to me that there are a lot of positives to be drawn from these accounts.
[/quote]
Your avatar is 'winning'.
[quote author=KHL link=topic=45212.msg1327238#msg1327238 date=1304596843]
[quote author=doctor_mac link=topic=45212.msg1327233#msg1327233 date=1304595428]
Seems to me that there are a lot of positives to be drawn from these accounts.
[/quote]
Your avatar is 'winning'.
[/quote]
Thanks KHL. Dug is one of my favourite characters in cinematic history, this week.
[quote author=doctor_mac link=topic=45212.msg1327233#msg1327233 date=1304595428]
Seems to me that there are a lot of positives to be drawn from these accounts.
[/quote]
Your avatar is 'winning'.
[/quote]
Thanks KHL. Dug is one of my favourite characters in cinematic history, this week.
I shake my head at the 48M Pounds spent on a Stadium that won't happen. A vanity project for H and G.
Overall though, with the new S & C sponsorship, the shirt deal, and also the lack of interest payments, it seems like we're on a good footing to be viable even *without* CL footy next season.
Overall though, with the new S & C sponsorship, the shirt deal, and also the lack of interest payments, it seems like we're on a good footing to be viable even *without* CL footy next season.
[quote author=localny link=topic=45212.msg1327283#msg1327283 date=1304602649]
I shake my head at the 48M Pounds spent on a Stadium that won't happen. A vanity project for H and G.
Overall though, with the new S & C sponsorship, the shirt deal, and also the lack of interest payments, it seems like we're on a good footing to be viable even *without* CL footy next season.
[/quote]
Although it can't be argued that losing that amount of money on the new stadium, it was hardly a "vanity project".
We needed (need) the fucker and I reckon Hicks and Gillette entered into the project with the best intentions.
The world turned to shit though.
I don't anyone calling a vanity project when the plans/renders were revealed.
I shake my head at the 48M Pounds spent on a Stadium that won't happen. A vanity project for H and G.
Overall though, with the new S & C sponsorship, the shirt deal, and also the lack of interest payments, it seems like we're on a good footing to be viable even *without* CL footy next season.
[/quote]
Although it can't be argued that losing that amount of money on the new stadium, it was hardly a "vanity project".
We needed (need) the fucker and I reckon Hicks and Gillette entered into the project with the best intentions.
The world turned to shit though.
I don't anyone calling a vanity project when the plans/renders were revealed.
[quote author=themn link=topic=45212.msg1327291#msg1327291 date=1304603330]
[quote author=localny link=topic=45212.msg1327283#msg1327283 date=1304602649]
I shake my head at the 48M Pounds spent on a Stadium that won't happen. A vanity project for H and G.
Overall though, with the new S & C sponsorship, the shirt deal, and also the lack of interest payments, it seems like we're on a good footing to be viable even *without* CL footy next season.
[/quote]
Although it can't be argued that losing that amount of money on the new stadium, it was hardly a "vanity project".
We needed (need) the fucker and I reckon Hicks and Gillette entered into the project with the best intentions.
The world turned to shit though.
I don't anyone calling a vanity project when the plans/renders were revealed.
[/quote]
Yes amigo, definitely needed, but the amount of architecture fees they paid for it, had the air of vanity about it. 47 million pounds for something that's just written on a piece of paper. Enough said. they must have owned the architecture firm to have paid so much. Any architects on here that can comment on 47M being a lot of money for some blueprints and conceptual ideas? My wife is one, and she was shaking her head when I told her.
[quote author=localny link=topic=45212.msg1327283#msg1327283 date=1304602649]
I shake my head at the 48M Pounds spent on a Stadium that won't happen. A vanity project for H and G.
Overall though, with the new S & C sponsorship, the shirt deal, and also the lack of interest payments, it seems like we're on a good footing to be viable even *without* CL footy next season.
[/quote]
Although it can't be argued that losing that amount of money on the new stadium, it was hardly a "vanity project".
We needed (need) the fucker and I reckon Hicks and Gillette entered into the project with the best intentions.
The world turned to shit though.
I don't anyone calling a vanity project when the plans/renders were revealed.
[/quote]
Yes amigo, definitely needed, but the amount of architecture fees they paid for it, had the air of vanity about it. 47 million pounds for something that's just written on a piece of paper. Enough said. they must have owned the architecture firm to have paid so much. Any architects on here that can comment on 47M being a lot of money for some blueprints and conceptual ideas? My wife is one, and she was shaking her head when I told her.
After the publication of Liverpool's accounts for the year ending July 2010 today, Managing Director Ian Ayre explained to Liverpoolfc.tv why he is confident of a bright future at Anfield.
Ian, Liverpool's accounts for the year ending July 2010 have been published today, but they don't paint a true picture of what life at Anfield is like these days, do they?
No, not particularly. They don't paint a picture of today. As you say, they are accounts for last season and obviously at that time it was a very different period and a different situation for Liverpool Football Club. I think we have all moved on since then. They very much represent a footnote in that era of the Club's history. It's an era that was very well documented and published for all sorts of reasons. But we remain very optimistic. Nobody, whether you're the Managing Director or anybody else connected with the Club, wants to see any report ever that talks about the sort of losses that report talks about, but I think we take comfort and optimism in the direction we've headed in since that period.
How much has changed at this Club since the acquisition by Fenway Sports Group?
Well a lot has changed in the sense of the financial reports that have just been issued. We've paid down a significant amount of what was acquisition debt from the previous owners and the Club finds itself in a much better position as a result of that. So we have less interest to pay - I think in the accounts that were issued, we were up to a level of paying about £17m per year of interest payments. That's gone away largely now, we have a very minimal debt and that allows us to reinvest that money into the team and the squad, which is what everybody connected with the Club wants to see. That's very positive, and I think also what we have is great owners who are very collaborative, work very closely with us and bring a lot to us as a business and as a team. We're starting to see great signs of improvement on and off the pitch and we have a great team of people with, as I said a few weeks ago, everybody working together and everybody rowing in the right direction with unity. I think all of those things combined - a greater level of access to funding and a greater level of unity and clarity - just sets us up for a great future.
Even during the reign of the previous ownership, commercial revenues were still very high. But now that we are free of this debt burden, how great is the opportunity to really drive the Club forward even further now?
Well on a commercial level, as you say, I think we were very fortunate and very grateful our partners, and some new partners, came to work with us. I think what everybody who is connected with, starts to be connected with, or becomes connected with this football club finds is that Liverpool is such an institution and such an important football club that has been around for many years and has foundations built on success. I think people recognise that we will always be there or thereabouts, and we will always be a great brand and a great football club recognised all over the world. So people partner with us because of that - because we're unique, historic and authentic. For that reason, we had fantastic support through the period and revenues grew significantly. The difference now, I guess, is that people are associating with us at a very positive time. There are a lot of good things going on at the football club and a lot of optimism both with our fans and certainly with us here at the Club, so people becoming commercial partners and being commercially involved with Liverpool now join us at a great time when everybody is on the up and everybody is feeling very good about things, and that bodes well. One of things when I arrived here that many people criticised Liverpool for was never having capitalised on previous success, whether that was many years ago or years like 2005 and 2006 when we won trophies, but one thing I can say absolutely is that as we get success in the future, we will be absolutely ready to capitalise on it commercially. That again works in that circle that brings revenue back to the Club, that puts more money into the pot to bring more players, and so it goes. We're very encouraged by where we are - but we're also very encouraged about where we can get to.
Click the image below to watch a FREE video of our Ian Ayre interview
Since the change of ownership, there have been several key appointments made, including on the football side. Already, how impressed and pleased are you with the positive strides being made across all levels, from Melwood to the Academy?
It's fantastic. Going from strength to strength would be the best way to describe it. As our fans, owners and everybody has seen, everybody is hugely encouraged by what we're seeing coming out of the Academy, the youth players and success in various different levels of our youth programme. Equally, the first team is starting to make progress - new signings and Kenny and Steve (Clarke) doing a fantastic job - so everybody is encouraged. It seems like you're kind of repeating yourself, but at the moment you always seem to come back to that thing that everybody is working together. We're a team - we're a football club, but we're a team. That's the most encouraging thing - there doesn't seem to be any political nature to any department or any area of the Club, and there doesn't seem to be any divide in any area of the Club. When you have a team of people who operate in that way, you almost always see it resulting in success.
Was the January transfer window a perfect example of people working closely together? Key people making big decisions to invest heavily in the future of this Club...
Yes, absolutely. There were a number of things that came out of that. Obviously the net result was Fernando (Torres) left for a significant amount of money and other players left, but that was immediately reinvested in the team we have today and, in particular, in Luis Suarez and Andy Carroll. Everybody has seen the net result of that on the pitch and I think everybody is pleased with that piece of business. The things people don't see that are as equally as important are the way that was managed by people like Damien (Comolli), Kenny and others all working around that. That team of people working together, things like the information around it in the lead up to it not being in the media and not being over-speculated was very important. It is important to get the right deals, it is important to negotiate things behind closed doors and it is important to keep things private - and then when we have a great story to tell, to tell it. That great story was that we ended up with two great players and that's had a great effect. We were very encouraged by how the team who work around transfers came together in that particular period and we were equally encouraged by the results. There will be more of that to do in the summer and everyone is very excited about that.
We've spoken about the big-name players who cost a lot of money arriving in January. Recently, fans have also been excited by the emergence of Academy players such as Jack Robinson and John Flanagan into the team. Does that excite you? It's another good sign for the future, isn't it?
It's hugely exciting. I am always encouraged when you're out in the streets in Liverpool or on the internet, it seems to be one of the things our fans are very, very focused on. I think that's because it's kind of back to the old ways of Liverpool. We were a Club that always brought players through our own ranks, we've always had Scousers in the team with Steven and Jamie being the existing remnants of old currently, and it's great to see that coming through again because as an authentic, historic football club, having that conveyer belt bringing through new young, fresh talent is absolutely the way forward. There is a combination of that and finding young players that you bring in not necessarily from academies. People like Jonjo Shelvey have been inspirational as well, and Jay Spearing is another great example. It is encouraging not just to see what is happening in the first team, but also to see what is happening in the reserves and what is happening even below that level. What Frank McParland and his team are doing at the Academy with Rodolfo (Borrell) and Pep Segura is fantastic and we're just starting to see only the start of the rewards of that. They are very encouraged by lots of players down there and I know we're seeing a lot more attendance, viewing and people taking a genuine interest in that level of players.
We don't expect you to go into specifics obviously, but is it fair to say there is already a lot of work going on behind the scenes to plan for next season?
Yes, in lots of areas. Obviously in the transfer market, Damien and the people who work with him are extremely busy in that regard. But also things like our pre-season tour - making sure that's locked down and making sure that it is sufficiently set out such that it gives the players the right start for the season and gives them the right chance to prepare. People often think that's an easy task, but actually it's difficult and it is also important that you have to fix it and move it around things like other competitions. We've got the Copa America, which some of our players will play in, and we've got some U21 activity, so it's about getting all of those things right and making sure we use what seems to be a shorter and shorter break every year to prepare everybody, on and off the pitch, for the start of the new season.
As the Managing Director, as the head of the team here, do you see this now as the start of a new era and are you excited by what the future may hold?
Yes, I definitely see it as a new era. I think we started it four or five months ago. We're very fortunate we have a great ownership group that are very supportive and very committed to Liverpool, but we're also equally fortunate that over several years we have built up a great team within the football club. It's nice to see lots of people who worked very hard in very difficult times are now walking with a spring in their step at every level, whether it's players or right through to the staff here in our main offices. That's the most encouraging thing - that you know people have worked very hard through difficult times and we definitely see good times ahead.
Ian, Liverpool's accounts for the year ending July 2010 have been published today, but they don't paint a true picture of what life at Anfield is like these days, do they?
No, not particularly. They don't paint a picture of today. As you say, they are accounts for last season and obviously at that time it was a very different period and a different situation for Liverpool Football Club. I think we have all moved on since then. They very much represent a footnote in that era of the Club's history. It's an era that was very well documented and published for all sorts of reasons. But we remain very optimistic. Nobody, whether you're the Managing Director or anybody else connected with the Club, wants to see any report ever that talks about the sort of losses that report talks about, but I think we take comfort and optimism in the direction we've headed in since that period.
How much has changed at this Club since the acquisition by Fenway Sports Group?
Well a lot has changed in the sense of the financial reports that have just been issued. We've paid down a significant amount of what was acquisition debt from the previous owners and the Club finds itself in a much better position as a result of that. So we have less interest to pay - I think in the accounts that were issued, we were up to a level of paying about £17m per year of interest payments. That's gone away largely now, we have a very minimal debt and that allows us to reinvest that money into the team and the squad, which is what everybody connected with the Club wants to see. That's very positive, and I think also what we have is great owners who are very collaborative, work very closely with us and bring a lot to us as a business and as a team. We're starting to see great signs of improvement on and off the pitch and we have a great team of people with, as I said a few weeks ago, everybody working together and everybody rowing in the right direction with unity. I think all of those things combined - a greater level of access to funding and a greater level of unity and clarity - just sets us up for a great future.
Even during the reign of the previous ownership, commercial revenues were still very high. But now that we are free of this debt burden, how great is the opportunity to really drive the Club forward even further now?
Well on a commercial level, as you say, I think we were very fortunate and very grateful our partners, and some new partners, came to work with us. I think what everybody who is connected with, starts to be connected with, or becomes connected with this football club finds is that Liverpool is such an institution and such an important football club that has been around for many years and has foundations built on success. I think people recognise that we will always be there or thereabouts, and we will always be a great brand and a great football club recognised all over the world. So people partner with us because of that - because we're unique, historic and authentic. For that reason, we had fantastic support through the period and revenues grew significantly. The difference now, I guess, is that people are associating with us at a very positive time. There are a lot of good things going on at the football club and a lot of optimism both with our fans and certainly with us here at the Club, so people becoming commercial partners and being commercially involved with Liverpool now join us at a great time when everybody is on the up and everybody is feeling very good about things, and that bodes well. One of things when I arrived here that many people criticised Liverpool for was never having capitalised on previous success, whether that was many years ago or years like 2005 and 2006 when we won trophies, but one thing I can say absolutely is that as we get success in the future, we will be absolutely ready to capitalise on it commercially. That again works in that circle that brings revenue back to the Club, that puts more money into the pot to bring more players, and so it goes. We're very encouraged by where we are - but we're also very encouraged about where we can get to.
Click the image below to watch a FREE video of our Ian Ayre interview
Since the change of ownership, there have been several key appointments made, including on the football side. Already, how impressed and pleased are you with the positive strides being made across all levels, from Melwood to the Academy?
It's fantastic. Going from strength to strength would be the best way to describe it. As our fans, owners and everybody has seen, everybody is hugely encouraged by what we're seeing coming out of the Academy, the youth players and success in various different levels of our youth programme. Equally, the first team is starting to make progress - new signings and Kenny and Steve (Clarke) doing a fantastic job - so everybody is encouraged. It seems like you're kind of repeating yourself, but at the moment you always seem to come back to that thing that everybody is working together. We're a team - we're a football club, but we're a team. That's the most encouraging thing - there doesn't seem to be any political nature to any department or any area of the Club, and there doesn't seem to be any divide in any area of the Club. When you have a team of people who operate in that way, you almost always see it resulting in success.
Was the January transfer window a perfect example of people working closely together? Key people making big decisions to invest heavily in the future of this Club...
Yes, absolutely. There were a number of things that came out of that. Obviously the net result was Fernando (Torres) left for a significant amount of money and other players left, but that was immediately reinvested in the team we have today and, in particular, in Luis Suarez and Andy Carroll. Everybody has seen the net result of that on the pitch and I think everybody is pleased with that piece of business. The things people don't see that are as equally as important are the way that was managed by people like Damien (Comolli), Kenny and others all working around that. That team of people working together, things like the information around it in the lead up to it not being in the media and not being over-speculated was very important. It is important to get the right deals, it is important to negotiate things behind closed doors and it is important to keep things private - and then when we have a great story to tell, to tell it. That great story was that we ended up with two great players and that's had a great effect. We were very encouraged by how the team who work around transfers came together in that particular period and we were equally encouraged by the results. There will be more of that to do in the summer and everyone is very excited about that.
We've spoken about the big-name players who cost a lot of money arriving in January. Recently, fans have also been excited by the emergence of Academy players such as Jack Robinson and John Flanagan into the team. Does that excite you? It's another good sign for the future, isn't it?
It's hugely exciting. I am always encouraged when you're out in the streets in Liverpool or on the internet, it seems to be one of the things our fans are very, very focused on. I think that's because it's kind of back to the old ways of Liverpool. We were a Club that always brought players through our own ranks, we've always had Scousers in the team with Steven and Jamie being the existing remnants of old currently, and it's great to see that coming through again because as an authentic, historic football club, having that conveyer belt bringing through new young, fresh talent is absolutely the way forward. There is a combination of that and finding young players that you bring in not necessarily from academies. People like Jonjo Shelvey have been inspirational as well, and Jay Spearing is another great example. It is encouraging not just to see what is happening in the first team, but also to see what is happening in the reserves and what is happening even below that level. What Frank McParland and his team are doing at the Academy with Rodolfo (Borrell) and Pep Segura is fantastic and we're just starting to see only the start of the rewards of that. They are very encouraged by lots of players down there and I know we're seeing a lot more attendance, viewing and people taking a genuine interest in that level of players.
We don't expect you to go into specifics obviously, but is it fair to say there is already a lot of work going on behind the scenes to plan for next season?
Yes, in lots of areas. Obviously in the transfer market, Damien and the people who work with him are extremely busy in that regard. But also things like our pre-season tour - making sure that's locked down and making sure that it is sufficiently set out such that it gives the players the right start for the season and gives them the right chance to prepare. People often think that's an easy task, but actually it's difficult and it is also important that you have to fix it and move it around things like other competitions. We've got the Copa America, which some of our players will play in, and we've got some U21 activity, so it's about getting all of those things right and making sure we use what seems to be a shorter and shorter break every year to prepare everybody, on and off the pitch, for the start of the new season.
As the Managing Director, as the head of the team here, do you see this now as the start of a new era and are you excited by what the future may hold?
Yes, I definitely see it as a new era. I think we started it four or five months ago. We're very fortunate we have a great ownership group that are very supportive and very committed to Liverpool, but we're also equally fortunate that over several years we have built up a great team within the football club. It's nice to see lots of people who worked very hard in very difficult times are now walking with a spring in their step at every level, whether it's players or right through to the staff here in our main offices. That's the most encouraging thing - that you know people have worked very hard through difficult times and we definitely see good times ahead.
have put this in here as it seems fairly relevant, it's a piece by Marcotti about Uefa FFP. Not sure i agree with him about the 'flexibility' being a good thing, seems like another word for unfair to me given the decent amount of time clubs have had to prepare for this and the already generous leeway they're being granted.
Can someone please Binny the important bits?
How Ian Ayre transformed Liverpool FC's commercial fortunes
By James Taylor Thursday, 05 May 2011
Since Ian Ayre joined Liverpool in 2007, commercial revenues have jumped by about 85%. Here he tells MT why - and what happens next.
Liverpool FC’s latest financial results, for the year to July 2010, don’t look particularly positive: the club made a £20m loss, thanks partly to £17m in interest payments on the £123m debt piled onto the club by its much-despised previous owners, Tom Hicks and George Gillett. But there was some good news in there too: revenues climbed to £184m, as the club continues to benefit from the remarkable transformation in its commercial fortunes since hiring Ian Ayre in 2007. And now the club is largely debt-free, following its acquisition by US-based Fenway Sports Group in October, it should be well-placed to cash in.
MT spoke exclusively to Ayre – recently promoted to MD by the new owners – to find out what exactly he changed when he joined the business, and how he plans to build on this now he’s in the top job. We also asked him how he persuaded Standard Chartered to stump up £80m to sponsor the club’s shirts, what he thinks is special about the LFC ‘brand’, how he’d deal with badly-behaved players; what the club’s commercial plans are overseas; and what he thinks about the much-maligned 39th game...
MT: When you first came to Liverpool, what were the problems that needed fixing?
IA: Both as a fan, and as someone who'd worked on the commercial side of football, it was pretty evident that Liverpool wasn't punching its weight. It hadn't really capitalised on the growth of football. Revenues had grown for all clubs almost by default because of the size of media contracts and so on, but in Liverpool's case, the club hadn't geared itself up to support and manage that revenue growth. It's like the corner shop growing into a superstore without bringing any staff in.
Was the situation worse than you expected?
Very much so. The biggest surprise was the lack of bodies in core areas. There seemed to be a whole layer of middle management missing, plus a whole layer of infrastructure. Lots of the commercial elements had been outsourced - sponsorship, the retail business, our media channels, even the catering - and these elements are at the core of how you globalise and develop a big football club with a truly worldwide reach. So we were at an immediate disadvantage.
So what did you do?
If you want to capitalise on opportunities and provide the right things for the fans, you need people who understand what makes this club special and unique, and what it is that makes people - either in Liverpool or in Singapore - support the club. So I hired six new senior managers in six different disciplines. Once we'd brought these people in to champion their different areas, we could start bringing all these elements back in-house.
The first hire was on the customer relationship management side. A club like Liverpool has an enormous number of connections with its fans every day - online, by phone, at supporter clubs - but nobody was capturing that data and using it to establish a two-way relationship with them. And if you don't know who your customers are, or where they are, how can you best serve them and make sure there are things for them to buy and enjoy? So we created something called The Single View of the Fan, which means that if you interact with the club in any capacity, we capture that data and create an individual identity for you. There's nothing worse as a consumer than being bombarded with information about stuff you have no interest in. My dad's 70, so he doesn't want to get an email about the new home shirt, because he's not going to buy it. Well actually, he doesn't want to get an email at all.
We also bought out our digital media joint venture (JV). Sponsorship was being sold by Granada as part of the JV, so we brought that back in-house too. And more recently we've also extracted ourselves from our JV on the retail side. So essentially, we were more in control of our own destiny. Since then, every single element of our commercial business has grown. Our revenues are up by 85% over the period, including one of the biggest shirt sponsorship deals in football.
How did you go about getting that deal with Standard Chartered? Was it a difficult sell?
Well we have 13 or 14 different sponsors now, and the approach is different for different categories - beer, travel and so on. But we always try to avoid a shotgun approach to selling anything, so we draw up a shortlist of people in each category. Not everyone does this, but we spend a lot of time before we go to market analysing who's in that market and who's spending money - if we're looking for a £5m sponsorship deal, there's no point us knocking on the door of an electronics company that only has £500k to spend. The shirt deal was obviously a bit different as we looked across all categories - but we only did proper, well-developed pitches to about 15 companies, although we were very confident we'd reach the level we ended up reaching. We only targeted people who had already shown some interest in sport, who we knew would understand the value of working with a club like Liverpool globally; and, where possible, whose culture and values were similar to ours. We ended up with six companies at the final hurdle, all in a similar range financially.
So at that stage is it just about taking the biggest cheque?
We didn't actually choose the one offering the biggest amount of money; another company offered significantly more. But what Standard Chartered had that we thought was more valuable than that additional 20% or whatever, was that there was a real match in terms of what kind of business they are; how they conduct themselves; what markets they're targeting for growth; and how they were going to go about activating the sponsorship internally. And I think it was absolutely the right choice. Even in one season you can see how much value they've gained from being a partner of ours, and vice-versa.
What exactly do they expect to get out of it?
That will probably develop over the term of the relationship. At the outset, it's all about raising the profile of their brand; they're very successful in Asia, Africa and the Middle East, but less well known in the rest of the world. So they want people to know about the bank, and for people in their core markets to know more about the bank. They say that every internal metric they've set to measure the success of this relationship has been surpassed by an unbelievable amount already. So it clearly works for them, and it works for us.
But nothing's set in stone; we've agreed we'll have an open mind about how we'll work together as things progress. Perhaps for the first couple of years it's all about being on the TV channel or the website. But if in later years it's more about other aspects, we'd absolutely have the flexibility to address that.
What's vital is that every year they're with us, and every dollar they spend, they absolutely believe that they get a return on that investment. A lot of sponsorship deals I've been involved with are a bit like, 'this is what it says on the contract, so this is what you're going to get'. But I think that's a very narrow-minded view. It's much harder to get a new sponsor than it is to keep an existing one, and this is a philosophy I've tried to instil in my team - we want to keep everyone we've got, so we'll develop with them and they'll develop with us. Carlsberg's a great example - they were Liverpool's shirt sponsor for 18 years but they didn't walk away at the end; they decided that they wanted to remain part of the Liverpool family.
You said that you think the Liverpool 'brand' is special/unique. Why?
I think the thing about Liverpool is the sense of inclusiveness, going right back to the socialist ideals of Shankly, if you like - the idea that we're all in this together, that we look after each other. There have been lots of examples of that over the years, and I think over the years that's resonated outwards. I've spent a lot of time in Asia, and it mirrors the values in a lot of Asian countries - it's about family, about looking after and having respect for each other. It's little things, like the fact that when teams come to Anfield and beat us, the fans will stand up and applaud them at the end - I've never seen that anywhere else. There's also a lot of respect for the way Liverpool has conducted itself in times of adversity.
Someone said to me recently that if you take a club like Man United, people either love them or hate them - it's the Marmite effect. But with Liverpool, we're more like everyone's second favourite team. So when you're responsible for selling and marketing the brand, you've got to keep that in mind. Part of our attraction is that we're not confrontational; you've got to understand how precious certain things are and not go out and market them to death. Of course, there's no shortage of people who tell me every week that we shouldn't do this or that. But it's about finding the middle ground. And it's also about educating fans in different places - what fans in Merseyside think or want is not necessarily what fans in other places think. So you have to explain sometimes: this product we're making is not for you - it doesn't matter if you don't like it, because it's not targeted at you. It all comes back to knowing the individual customer, and providing a much bigger range of options for people.
Fans often talk about 'The Liverpool Way'. Do you think the recent boardroom shenanigans undermined that? And did that affect the way the club was perceived externally?
There's maybe a bit more cynicism around now. I think it's true that Liverpool lost its way, but it's now coming back to the way it used to be and wants to be. It's a real testament to this football club that through all those difficult times - the sale, the court case, poor performances, managers leaving - through all of that, the business not only survived but grew. That's testament to the loyalty and commitment of our fans, and the commitment of the staff who work here. For the people who work here and support the club, it's not about today or next week. The easiest thing would have been for the fans to vote with their feet, but we were still selling out pretty much every game - they were protesting in the car park, and then filling the stands. I know from my friends on the Kop - they might not have been happy, but they were there to support the team. That's a great great thing for the football club.
How important is the behaviour of the players to the Liverpool 'brand'? What would you have done in the Wayne Rooney situation, for instance?
Nobody should be above the rules. If players or staff don't conduct themselves in a manner befitting of the rules and culture and honour of the club then they'd need to be disciplined. But we've been very fortunate that we haven't had that type of issue.
Would the Liverpool Way mean dealing with the problem behind closed doors? Or is it important to do it publicly?
If someone does something publicly that's disrespectful and brings the club into disrepute then we might deal with it behind closed doors, but it will be pretty public what's happened. There's a great sign up at the Academy, which says that when you come through those doors and join this club, make sure you understand what it means. When anyone arrives here - whether they work in the canteen or play for the first team - they have to understand and respect what this football club is all about and what it means to so many people. Anyone who disrespects that has to face the consequences. People commit a lot of money, time and effort to this club - as fans, as employees, as owners - so it's not fair for people to disrespect it.
Will there be any change to the commercial strategy or focus under the new owners?
The strategy doesn't change, it just moves ahead more positively. The plan was always that we'd clean up the house, surround ourselves with good and effective partners, and bring back all our assets so we're in control of them - that was the first major stage of my business plan. The second phase is to reach out and globalise what we've created - to offer the same level of product to international markets as we do locally. We want to be able to offer a fan in China a similar but different level of buy-in to Liverpool, in different forms and languages and currencies.
What will that involve in practice?
All manner of things. It means real infrastructure and people in certain markets; we've got an office in Singapore, and FSG's sports marketing team are picking up the US for Liverpool, so we've effectively got an office in the US too. We'll also going to be expanding into some other markets - we're just circling in at the moment which ones, and at what size. Then the next stage will be more localised products - local language TV and websites; retail products that are more geared towards that particular market/region at that particular price point. And there's our soccer school business, which is growing significantly at the moment - we've started 6 new schools in the last 8 months. So it's a combination of all of these. The idea is that wherever you are in the world as a Liverpool fan, you should be able to reach out and touch some of our products in a local language/ currency. But it's not one size fits all, it's got to be as tailored as possible.
We'll support that with other things like touring - we'll go on tour to three key Asian markets this summer, for example. But we see tours as the icing on the cake, as opposed to being big revenue generators in themselves. It's all about creating the other things that are going on week to week. Going on tour doesn't make you significant money or build a significant fanbase - what does that is being in people's eyeballs every day. That's what we're trying to create. The team turning up is just the icing on the cake.
Are you a believer in the 39th game?
I don't know - it's fraught with lots of issues. But somehow we have a duty to fans around the world to give them access to the product. So never say never. What was unfortunate about last time was that the idea was created as some kind of reality before it had been thought through. And whatever's going to happen in football, it needs to have been absolutely thought through and every element considered - what's right and proper for the fans, the club, the league, the confederation, the local markets where you'd play. It all needs to be properly considered and I don't think last time that was the case.
Do you think the fans are more accepting of the commercial side of football these days?
I'm a Liverpool lad. We'd all love to think that this is our football club from our city; that we own it. But the absolute reality - in the case of Liverpool, not everyone - is that this is a global brand, one of only a handful of clubs that are truly globally recognised and supported. So you can't have it both ways. You can't hope to be one of the biggest football clubs in the world, with some of the biggest revenues and some of the greatest players, and you can't invite people from the other side of the world to support your team and contribute to your revenues and therefore your success, and not expect to let them in and let them participate in some way in what you do. If we want to be a small parochial club, and close our doors to anyone outside the city, we won't get very far in this global football market. So whether it's what people like is irrelevant - it's absolutely what people have to accept and expect.
By James Taylor Thursday, 05 May 2011
Since Ian Ayre joined Liverpool in 2007, commercial revenues have jumped by about 85%. Here he tells MT why - and what happens next.
Liverpool FC’s latest financial results, for the year to July 2010, don’t look particularly positive: the club made a £20m loss, thanks partly to £17m in interest payments on the £123m debt piled onto the club by its much-despised previous owners, Tom Hicks and George Gillett. But there was some good news in there too: revenues climbed to £184m, as the club continues to benefit from the remarkable transformation in its commercial fortunes since hiring Ian Ayre in 2007. And now the club is largely debt-free, following its acquisition by US-based Fenway Sports Group in October, it should be well-placed to cash in.
MT spoke exclusively to Ayre – recently promoted to MD by the new owners – to find out what exactly he changed when he joined the business, and how he plans to build on this now he’s in the top job. We also asked him how he persuaded Standard Chartered to stump up £80m to sponsor the club’s shirts, what he thinks is special about the LFC ‘brand’, how he’d deal with badly-behaved players; what the club’s commercial plans are overseas; and what he thinks about the much-maligned 39th game...
MT: When you first came to Liverpool, what were the problems that needed fixing?
IA: Both as a fan, and as someone who'd worked on the commercial side of football, it was pretty evident that Liverpool wasn't punching its weight. It hadn't really capitalised on the growth of football. Revenues had grown for all clubs almost by default because of the size of media contracts and so on, but in Liverpool's case, the club hadn't geared itself up to support and manage that revenue growth. It's like the corner shop growing into a superstore without bringing any staff in.
Was the situation worse than you expected?
Very much so. The biggest surprise was the lack of bodies in core areas. There seemed to be a whole layer of middle management missing, plus a whole layer of infrastructure. Lots of the commercial elements had been outsourced - sponsorship, the retail business, our media channels, even the catering - and these elements are at the core of how you globalise and develop a big football club with a truly worldwide reach. So we were at an immediate disadvantage.
So what did you do?
If you want to capitalise on opportunities and provide the right things for the fans, you need people who understand what makes this club special and unique, and what it is that makes people - either in Liverpool or in Singapore - support the club. So I hired six new senior managers in six different disciplines. Once we'd brought these people in to champion their different areas, we could start bringing all these elements back in-house.
The first hire was on the customer relationship management side. A club like Liverpool has an enormous number of connections with its fans every day - online, by phone, at supporter clubs - but nobody was capturing that data and using it to establish a two-way relationship with them. And if you don't know who your customers are, or where they are, how can you best serve them and make sure there are things for them to buy and enjoy? So we created something called The Single View of the Fan, which means that if you interact with the club in any capacity, we capture that data and create an individual identity for you. There's nothing worse as a consumer than being bombarded with information about stuff you have no interest in. My dad's 70, so he doesn't want to get an email about the new home shirt, because he's not going to buy it. Well actually, he doesn't want to get an email at all.
We also bought out our digital media joint venture (JV). Sponsorship was being sold by Granada as part of the JV, so we brought that back in-house too. And more recently we've also extracted ourselves from our JV on the retail side. So essentially, we were more in control of our own destiny. Since then, every single element of our commercial business has grown. Our revenues are up by 85% over the period, including one of the biggest shirt sponsorship deals in football.
How did you go about getting that deal with Standard Chartered? Was it a difficult sell?
Well we have 13 or 14 different sponsors now, and the approach is different for different categories - beer, travel and so on. But we always try to avoid a shotgun approach to selling anything, so we draw up a shortlist of people in each category. Not everyone does this, but we spend a lot of time before we go to market analysing who's in that market and who's spending money - if we're looking for a £5m sponsorship deal, there's no point us knocking on the door of an electronics company that only has £500k to spend. The shirt deal was obviously a bit different as we looked across all categories - but we only did proper, well-developed pitches to about 15 companies, although we were very confident we'd reach the level we ended up reaching. We only targeted people who had already shown some interest in sport, who we knew would understand the value of working with a club like Liverpool globally; and, where possible, whose culture and values were similar to ours. We ended up with six companies at the final hurdle, all in a similar range financially.
So at that stage is it just about taking the biggest cheque?
We didn't actually choose the one offering the biggest amount of money; another company offered significantly more. But what Standard Chartered had that we thought was more valuable than that additional 20% or whatever, was that there was a real match in terms of what kind of business they are; how they conduct themselves; what markets they're targeting for growth; and how they were going to go about activating the sponsorship internally. And I think it was absolutely the right choice. Even in one season you can see how much value they've gained from being a partner of ours, and vice-versa.
What exactly do they expect to get out of it?
That will probably develop over the term of the relationship. At the outset, it's all about raising the profile of their brand; they're very successful in Asia, Africa and the Middle East, but less well known in the rest of the world. So they want people to know about the bank, and for people in their core markets to know more about the bank. They say that every internal metric they've set to measure the success of this relationship has been surpassed by an unbelievable amount already. So it clearly works for them, and it works for us.
But nothing's set in stone; we've agreed we'll have an open mind about how we'll work together as things progress. Perhaps for the first couple of years it's all about being on the TV channel or the website. But if in later years it's more about other aspects, we'd absolutely have the flexibility to address that.
What's vital is that every year they're with us, and every dollar they spend, they absolutely believe that they get a return on that investment. A lot of sponsorship deals I've been involved with are a bit like, 'this is what it says on the contract, so this is what you're going to get'. But I think that's a very narrow-minded view. It's much harder to get a new sponsor than it is to keep an existing one, and this is a philosophy I've tried to instil in my team - we want to keep everyone we've got, so we'll develop with them and they'll develop with us. Carlsberg's a great example - they were Liverpool's shirt sponsor for 18 years but they didn't walk away at the end; they decided that they wanted to remain part of the Liverpool family.
You said that you think the Liverpool 'brand' is special/unique. Why?
I think the thing about Liverpool is the sense of inclusiveness, going right back to the socialist ideals of Shankly, if you like - the idea that we're all in this together, that we look after each other. There have been lots of examples of that over the years, and I think over the years that's resonated outwards. I've spent a lot of time in Asia, and it mirrors the values in a lot of Asian countries - it's about family, about looking after and having respect for each other. It's little things, like the fact that when teams come to Anfield and beat us, the fans will stand up and applaud them at the end - I've never seen that anywhere else. There's also a lot of respect for the way Liverpool has conducted itself in times of adversity.
Someone said to me recently that if you take a club like Man United, people either love them or hate them - it's the Marmite effect. But with Liverpool, we're more like everyone's second favourite team. So when you're responsible for selling and marketing the brand, you've got to keep that in mind. Part of our attraction is that we're not confrontational; you've got to understand how precious certain things are and not go out and market them to death. Of course, there's no shortage of people who tell me every week that we shouldn't do this or that. But it's about finding the middle ground. And it's also about educating fans in different places - what fans in Merseyside think or want is not necessarily what fans in other places think. So you have to explain sometimes: this product we're making is not for you - it doesn't matter if you don't like it, because it's not targeted at you. It all comes back to knowing the individual customer, and providing a much bigger range of options for people.
Fans often talk about 'The Liverpool Way'. Do you think the recent boardroom shenanigans undermined that? And did that affect the way the club was perceived externally?
There's maybe a bit more cynicism around now. I think it's true that Liverpool lost its way, but it's now coming back to the way it used to be and wants to be. It's a real testament to this football club that through all those difficult times - the sale, the court case, poor performances, managers leaving - through all of that, the business not only survived but grew. That's testament to the loyalty and commitment of our fans, and the commitment of the staff who work here. For the people who work here and support the club, it's not about today or next week. The easiest thing would have been for the fans to vote with their feet, but we were still selling out pretty much every game - they were protesting in the car park, and then filling the stands. I know from my friends on the Kop - they might not have been happy, but they were there to support the team. That's a great great thing for the football club.
How important is the behaviour of the players to the Liverpool 'brand'? What would you have done in the Wayne Rooney situation, for instance?
Nobody should be above the rules. If players or staff don't conduct themselves in a manner befitting of the rules and culture and honour of the club then they'd need to be disciplined. But we've been very fortunate that we haven't had that type of issue.
Would the Liverpool Way mean dealing with the problem behind closed doors? Or is it important to do it publicly?
If someone does something publicly that's disrespectful and brings the club into disrepute then we might deal with it behind closed doors, but it will be pretty public what's happened. There's a great sign up at the Academy, which says that when you come through those doors and join this club, make sure you understand what it means. When anyone arrives here - whether they work in the canteen or play for the first team - they have to understand and respect what this football club is all about and what it means to so many people. Anyone who disrespects that has to face the consequences. People commit a lot of money, time and effort to this club - as fans, as employees, as owners - so it's not fair for people to disrespect it.
Will there be any change to the commercial strategy or focus under the new owners?
The strategy doesn't change, it just moves ahead more positively. The plan was always that we'd clean up the house, surround ourselves with good and effective partners, and bring back all our assets so we're in control of them - that was the first major stage of my business plan. The second phase is to reach out and globalise what we've created - to offer the same level of product to international markets as we do locally. We want to be able to offer a fan in China a similar but different level of buy-in to Liverpool, in different forms and languages and currencies.
What will that involve in practice?
All manner of things. It means real infrastructure and people in certain markets; we've got an office in Singapore, and FSG's sports marketing team are picking up the US for Liverpool, so we've effectively got an office in the US too. We'll also going to be expanding into some other markets - we're just circling in at the moment which ones, and at what size. Then the next stage will be more localised products - local language TV and websites; retail products that are more geared towards that particular market/region at that particular price point. And there's our soccer school business, which is growing significantly at the moment - we've started 6 new schools in the last 8 months. So it's a combination of all of these. The idea is that wherever you are in the world as a Liverpool fan, you should be able to reach out and touch some of our products in a local language/ currency. But it's not one size fits all, it's got to be as tailored as possible.
We'll support that with other things like touring - we'll go on tour to three key Asian markets this summer, for example. But we see tours as the icing on the cake, as opposed to being big revenue generators in themselves. It's all about creating the other things that are going on week to week. Going on tour doesn't make you significant money or build a significant fanbase - what does that is being in people's eyeballs every day. That's what we're trying to create. The team turning up is just the icing on the cake.
Are you a believer in the 39th game?
I don't know - it's fraught with lots of issues. But somehow we have a duty to fans around the world to give them access to the product. So never say never. What was unfortunate about last time was that the idea was created as some kind of reality before it had been thought through. And whatever's going to happen in football, it needs to have been absolutely thought through and every element considered - what's right and proper for the fans, the club, the league, the confederation, the local markets where you'd play. It all needs to be properly considered and I don't think last time that was the case.
Do you think the fans are more accepting of the commercial side of football these days?
I'm a Liverpool lad. We'd all love to think that this is our football club from our city; that we own it. But the absolute reality - in the case of Liverpool, not everyone - is that this is a global brand, one of only a handful of clubs that are truly globally recognised and supported. So you can't have it both ways. You can't hope to be one of the biggest football clubs in the world, with some of the biggest revenues and some of the greatest players, and you can't invite people from the other side of the world to support your team and contribute to your revenues and therefore your success, and not expect to let them in and let them participate in some way in what you do. If we want to be a small parochial club, and close our doors to anyone outside the city, we won't get very far in this global football market. So whether it's what people like is irrelevant - it's absolutely what people have to accept and expect.
Liverpool Losing Money But Gaining Value
By MIKE OZANIAN
Forbes
With reports out that Liverpool posted a pretax loss of $26 million for the year ended July 2010, there is speculation that the team’s new owner, Fenway Sports Group, will sell of a host of players.
Nonsense. First of all, Liverpool is still generating positive cash flow, posting earnings before interest, taxes, depreciation and amortization of $60 million last year. Second, John Henry, who recently inked a deal with the NBA’s LeBron James that gives Henry’s company representation of the Miami Heat star for a tiny slice of the soccer team, is not about to debase Liverool’s brand or give the club no shot at competing for the lucrative Champions League.
We already value the team at $552 million, 16% more than Henry paid Tom Hicks and George Gillett. Although Liverpool will likely post a net loss for 2011 because it missed out on the Champions League, the long-term value of this iconic club is going to keep increasing under Henry.
By MIKE OZANIAN
Forbes
With reports out that Liverpool posted a pretax loss of $26 million for the year ended July 2010, there is speculation that the team’s new owner, Fenway Sports Group, will sell of a host of players.
Nonsense. First of all, Liverpool is still generating positive cash flow, posting earnings before interest, taxes, depreciation and amortization of $60 million last year. Second, John Henry, who recently inked a deal with the NBA’s LeBron James that gives Henry’s company representation of the Miami Heat star for a tiny slice of the soccer team, is not about to debase Liverool’s brand or give the club no shot at competing for the lucrative Champions League.
We already value the team at $552 million, 16% more than Henry paid Tom Hicks and George Gillett. Although Liverpool will likely post a net loss for 2011 because it missed out on the Champions League, the long-term value of this iconic club is going to keep increasing under Henry.
I like what Ian Ayre has to say, a lot.
Yeah, he's done a great job till now.
Interesting career path, though Wiki isnt the most reliable of sources..
Aged 14, he won a competition to take a penalty in front of the Kop, during the half time break at Chris Lawler’s testimonial in 1978.
Leaving school at age 16, he joined the Royal Navy. After leaving the senior service, he then undertook various roles in business in Asia, eventually becoming Asia-Pacific director of Pace Systems.[1]
Returning to the UK, he became Chief Executive of Huddersfield Town F.C. for three yeras, before spending three years at sports TV firm Premium TV, an NTL subsidiary. He then moved to Malaysia, as CEO of Total Sports Asia, which included managing interests in Total Sports TV.Head hunted by a team working for then owners Tom Hicks and George N. Gillett, Jr., in 2007 Ayre was appointed Commercial Director at Liverpool. He then successfully sourced and negotiated the shirt sponsorship deal with Standard Chartered Bank.
On 15 October 2010, NESV completed its £300m takeover of Liverpool,[2] at which time the clubs existing Managing Director Christian Purslow stepped down.[3] The club's owners, Fenway Sports Group, led by John W. Henry and the chairman Tom Werner, announced Ayre as the new Managing Director on 22 March 2011
(I never knew he spnt time in Malaysia, must sleuth a bit)
Interesting career path, though Wiki isnt the most reliable of sources..
Aged 14, he won a competition to take a penalty in front of the Kop, during the half time break at Chris Lawler’s testimonial in 1978.
Leaving school at age 16, he joined the Royal Navy. After leaving the senior service, he then undertook various roles in business in Asia, eventually becoming Asia-Pacific director of Pace Systems.[1]
Returning to the UK, he became Chief Executive of Huddersfield Town F.C. for three yeras, before spending three years at sports TV firm Premium TV, an NTL subsidiary. He then moved to Malaysia, as CEO of Total Sports Asia, which included managing interests in Total Sports TV.Head hunted by a team working for then owners Tom Hicks and George N. Gillett, Jr., in 2007 Ayre was appointed Commercial Director at Liverpool. He then successfully sourced and negotiated the shirt sponsorship deal with Standard Chartered Bank.
On 15 October 2010, NESV completed its £300m takeover of Liverpool,[2] at which time the clubs existing Managing Director Christian Purslow stepped down.[3] The club's owners, Fenway Sports Group, led by John W. Henry and the chairman Tom Werner, announced Ayre as the new Managing Director on 22 March 2011
(I never knew he spnt time in Malaysia, must sleuth a bit)
That's a fucking fantastic interview from Ayre.
What struck me most on that interview is the lack of middle management bit. It was a glaring mistake by Parry as our worldwide fanbase went untapped for YEARS. Imagine what could've happened if we had a more proper structure back then...
Not wanting to get overly excited but Henry and FSG seem to be making the right moves off the field.
Not wanting to get overly excited but Henry and FSG seem to be making the right moves off the field.
Brilliant interview(s) and very insightful as to where this club is heading. I'm impressed.
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