JAMES POWELL is a consultant for Walker Morris Sports Group, based in London. Powell has represented a number of English Premier League clubs in commercial and corporate work and has served as the commercial director at Everton. In September, Powell took on an additional role at U.S.-based investment bank Cantor Fitzgerald to head its sports finance group. He spoke with SBD Global about his work at Everton, client expectations and exploiting club revenue streams.
On his work at Everton …
James Powell: I was their external commercial council. The commercial director left quite suddenly and the chief exec asked if I could step in for a month to help them out because I happened to know what deals were being done. It was a very big year. It was the year that Everton got into the top 20 richest clubs in the world. We had a very clear strategy, so he wanted to borrow me for a month. I ended up being there for 12 months. That set me up doing quite a bit of commercial as well as legal work with clubs. Between those two points in time I’ve been heavily involved in corporate work for football clubs as well.
On working with organizations and individuals …
Powell: I think all elements are quite exciting. My strongest preference is probably to work with football clubs -- with the organizations themselves. I understand how football clubs work. I understand that they have unique cash-flow cycles. I understand that they have unique pressures in terms of satisfying the fans and supporters. And they have a huge impact on how you manage your business. I think that’s the most challenging thing and probably the most exciting. The work that I do for football clubs is exciting. I do a lot of commercial work and player trading and moving managers as well. For instance, recently I moved Alan Pardew from Newcastle to Crystal Palace because I did a lot of work for Crystal Palace in the Premier League. So that’s interesting and it’s always high-profile and always gets in the newspapers and on the TV.
On dealing with a wide range of sports …
Powell: I think the principals are similar. I do quite a bit of work in football, obviously, but I also do a lot of work in motorsports -- Formula One. That’s interesting. That’s different. The supporters at Formula One are not necessarily there to support a team. They support a format, whether it’s on TV or whether it’s coming to the races. The pressures come -- from a legal perspective -- from making sure you have these highly financed teams well-managed with great partnerships, great brand partnerships that do a lot to bring the money into Formula One, as well as the broadcast stuff. Another area is boxing. I knew very little about boxing 18-24 months ago, but I had a client who was involved in football and boxing and I was doing quite a bit of football work for him. He had some litigation surrounding a world champion and I got involved in that and very quickly I’ve become quite heavily involved in some of the boxing work. Boxers have an awful lot of power, more power, relatively, than football players do. You seem to find, in boxing, that when you think you’ve got a deal, you can wake up the next morning and suddenly it’s all off. You don’t get that so much in the other sports. It’s unique in that respect.
On managing client expectations …
Powell: Managing clients' initial expectations [is a challenge]. I get quite involved in the commercial perspective as well as the legal perspective. I think that’s usually an advantage. But it means that you get involved quite early on. If it’s a commercial deal or a corporate deal to be done, that’s when your client is the most excited. They think this is going to change the world and it’s going to be the best commercial deal of corporate deal ever. You have to manage their expectations and bring them down to earth a little bit. It’s then developing their strategy so that you can get as close as possible to where you think the client thinks they are going to be if this deal comes off. I think that’s the most exciting part of it -- working with the clients on strategic elements of the deal as well as the legal. It’s certainly the most challenging part -- managing client expectations at the start. They’re usually excited and pleased that the deal’s been agreed in principle. The deal usually gets done, but it’s not quite at that high-level that they think it’s going to be. Keeping the client on board at that stage is important. A lot of clients are entrepreneurial and they can get bored quite quickly. If the deal hasn’t changed the world, then they want to try and move on to the next deal, thinking it’s going to change the world. So the challenge is managing the client and the client’s expectations. If you do that early on, then the deals tend to get done better and quicker.
On ManU…
Powell: It’s difficult for me to say this because I’m a Manchester City fan, but the way that [Exec Vice-Chair] Ed Woodward has structured things over the last few years in terms of developing all sorts of commercial revenue streams particularly in Southeast Asia and America, to a certain extent, has been quite impressive. I think that the way that Manchester United has developed the commercial revenue stream is terrific and I think it should be applauded. What I think other clubs have got to learn is that the Premier League is massive. It’s massive in America, it’s massive in Southeast Asia and it’s massive in the Middle East. I think that some of the Premier League clubs have not monetized the star dust that comes from being part of the Premier League. I think that’s where they stand the biggest chance, relatively, of increasing their revenues. I’m not suggesting that any of the clubs have been lazy, but I don’t think they’re fully exploiting the opportunities that they’ve got. I think they should probably take a leaf out of Manchester United’s book.
On new revenue streams …
Powell: The three key revenue streams are broadcast money, sponsorship and ticket revenues. One is out of [the club’s] hands to a certain extent, the second is in their hands and the third is dictated essentially by the stadium. What can a club do other than develop their commercial partnerships to really start pushing their revenues up? It’s difficult to look at any other area. That’s got to be the prime area of focus. I think it will be interesting to see whether they can utilize technology to generate more revenues, whether that’s having crowd participation, utilizing mobile technology and information technology. That’s really part and parcel to developing commercial partnerships. All the clubs have tried it to a certain extent. They’ve all got mobile partners. They are trying to find ways of getting more money out of their fanbase. I think what has changed dramatically over the last 6-7 years is the way that clubs fund themselves, using corporate finance more from organizations such as Cantor where they use these high-street banks to fund capital or infrastructure requirements. That has changed and will continue to change.
Hangin' With runs each Friday in SBD Global.
