SBJ/June 12 - 18, 2006/One On One

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  • Marketing muscle develops through success on the field

    When Roman Abramovich bought the Chelsea Football Club in the summer of 2003, one of the smartest investments he made was hiring Peter Kenyon away from Manchester United to run his franchise. As chief executive, Kenyon had been largely responsible for Man U’s on-field success and for raising the profile of that club to one of the world’s most recognizable sports brands.

    Last year, Chelsea won its first Premier League title in 50 years and signed lucrative multiyear sponsorship deals with Samsung and Adidas. According to a published report, since 2003, Chelsea’s U.K. fan base has increased by more than 300 percent (to 3.8 million) and its international fan base is close to 20 million. In late March, Kenyon announced a partnership between Chelsea and AEG, which operates four Major League Soccer teams. Kenyon spoke recently with SportsBusiness Journal New York bureau chief Jerry Kavanagh.

    Peter Kenyon helped make Manchester
    United one of the world’s top sports
    brands before moving to Chelsea.
    Favorite vacation spot: Maldives
    Favorite piece of music: Handel’s “Zadok the Priest”
    Favorite quote: “No one ever said it was going to be easy.”
    Favorite movie: “Casablanca”
    Favorite book: “Tai-Pan” by James Clavell
    Pet peeve: People who talk too loudly in meetings
    Athlete you most enjoy watching: Muhammad Ali
    Best business advice received: Timing is everything.
    Management philosophy: Give people confidence.
    Biggest professional challenge: Making Chelsea profitable
    Most creative accomplishment: Manchester United’s merchandising and sponsorship deal with Nike
    Proudest accomplishment: Finishing the London and New York marathons

    Henry Ford said, “History is bunk.” What has history taught you about the soccer business?

    Kenyon: That nothing is possible without success on the field.

    You understand brand building, having raised the profile of Manchester United, one of the most recognizable and successful teams in the world. And you had the words “football club” deleted from the club name to establish it as more than just a football team, as a global brand. What are the keys, your keys, to building a global brand?

    Of U.S. sports leagues, the NBA understands
    the global challenge best, Kenyon says.
    Kenyon: The first one is success on the field. That gives you visibility. And then it’s about engaging that fan base that you’re creating, and ultimately leaving a sort of market legacy. I think those are still the key points that are relative to any sports franchise.

    You once said, “Most American sports are only played on the shores of the U.S. The U.S. has got some very strong franchises, but in order for a franchise to be international, the sport has to be international.” Which U.S. sports leagues understand that better than the others?

    Kenyon: The NBA. They’re portrayed internationally as a single brand and they are in international markets. They’ve got key franchises in key markets. They’re true to what they do in the U.S. in other parts of the world.

    How do you attract more U.S. fans? And how do you then convert them to loyal fans?

    Kenyon: It is about becoming as relevant in the U.S. 365 days a year as we are domestically. You have to replicate that. You can’t achieve that by coming over with the team for 10 days every 12 months or every two years. It’s about being relevant to that soccer population in that marketplace and not actually doing it the way that you do it in the U.K.

    Does the success the U.S. national team enjoyed in the last World Cup make the task a little easier for you?

    Kenyon: Yes. You can only be successful if your industry is successful. And the success that the U.S. soccer team brought is that more people will watch it, more people will engage with it. And that’s got to be good for everybody in the industry.

    The latest rankings have the U.S. national team No. 6 [it has since moved up to No. 5] in the world. Is that possible?

    Chelsea won its first Premier League title
    in 50 years last year.
    Kenyon: Yeah. I think it ranks ahead of England, so anything’s possible in this game.

    Everyone looks now at China as a target audience, including you, who has talked about expanding a fan base to China.

    Kenyon: I don’t think anybody who’s got aspirations of a global business can ignore China and where that will be in 10 to 15 years. What’s quite unique is that most people in soccer see it in weeks or months, or certainly single years. I think what differentiates us is that we have a 10-year vision, which means that you’ve got to look at areas of China as being important. But, again, that’s looking at each market. China will be different from North America, and both of those will be different from the way we operate in the U.K. But the one thing that puts us in all those markets is media coverage. And the Premier League today is the most-watched league in world football.

    A study by Deloitte & Touche identified a “strong correlation between sporting performance and expenditure on players.” You said, “It’s annoying that we get tagged with ‘buying the title.’” Is that a misperception?

    Kenyon: I don’t think you can achieve the greatness that we’re looking for without resource, and resource is money. But I think there’s an intellectual resource, which ultimately is what brings success. And every sport in every country can point to clubs or franchises that have money but no success. I think it’s too simplistic to say that because you’ve got more money, you’ll gain more success. The thing that is overlooked there is the intellectual aspect of the people who are responsible for the franchise, which ultimately is what makes you successful.

    It’s a criticism that’s been leveled at George Steinbrenner and the Yankees. They have the most money, but they’ve also been very successful.

    Kenyon: Success says it’s a wise investment. That’s the way you’ve got to look at it.

    What do the U.S. pro leagues do best?

    Kenyon: Athlete presentation, media relations, and packaging the sport for media for maximum exposure and value are all things that the U.S. sports do as good as anybody in the world.

    Manchester United had a partnership with the New York Yankees. What did the two franchises gain from it?

    Kenyon: Awareness. Certainly that reverberated around the world. Content, which was very important to the Yankees at the time in terms of splitting off the Yankee TV network. And the partnering of two top franchises across sports was quite unique. That brought certain benefits of learning more about some of the relative strengths of two … sports franchises that are probably as recognized as any around the world.

    Will soccer ever take hold in the U.S.? What needs to be done?

    Kenyon: The sport in Europe’s been going over 100 years. So, I think if you look at where U.S. soccer is today, it’s in good shape. The trends are very positive. … I’m a great believer of talking up because I think there’s been a great job done. You’re in a marketplace which is unbelievably competitive for other sports. But I think it’s still young in many ways. I think the foundations have been firmly planted. We believe that the sport will get stronger, which is why we’re so committed to that marketplace.

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