Sport, Money and the Moment to Move with David Paton

Premier League clubs have until the end of the 2025-26 season to phase out gambling shirt sponsors. From summer 2026 they are banned entirely. Some clubs have been generating £20 to £25 million a year from those deals. The replacement market is a buyer's market and every sponsor knows it.

The clubs that treat this as a commercial opportunity rather than a revenue loss will come out ahead. The ones that wait until summer will be negotiating from desperation.

David Paton, Founder and CEO of Kinross Sport, has been inside this problem. He took Blackpool FC from £35,000 to £200,000 in shirt sponsorship in six weeks with no gambling. He turned around Spartan Race UK from a £750,000 annual loss. He ran Peterborough United through an FA Cup run that generated £1 million in additional revenue in a fortnight.

This episode shows you what the opportunity looks like and how to move on it before the window closes.

What this unlocks for you

• A framework for replacing gambling sponsorship with partnerships worth more commercially and reputationally
• Why the commercial opportunity inside a financial crisis in sport is almost always bigger than the problem itself
• The sequence that creates a real turnaround in sport  and why most organisations get the order wrong
• How to move fast under pressure without making decisions you regret

About the Guest

David Paton is Founder and CEO of Kinross Sport, a specialist sports advisory business focused on strategic investment, operational excellence and turnaround at C-suite level across football, rugby and events businesses.

LinkedIn: https://www.linkedin.com/in/davidpaton1/

Website: kinrosssport.co.uk

Connect with Kingsgate

Website: kingsgate.uk.com

Email: podcast@kingsgate.uk.com

Newsletter: thevalueagenda.beehiiv.com

LinkedIn: Kingsgate | Oliver Colling

YouTube: The Value Agenda

The Value Agenda is Kingsgate's podcast on turnaround, restructuring and value creation. 

Transcript

SPEAKER_01 0:00

Welcome to the Value Agenda. I'm Oliver Colling, Managing Director of Kingsgate, and in every episode of the Value Agenda I sit down with someone who knows what it's like to work with a business facing challenges. Today my guest is David Payton, founder and chief executive of Kinross Sports, and a trusted Kingsgate associate. David has spent over two decades working inside sports organisations facing challenges, including financial difficulties. Blackpool FC under court receivership. Peterborough United in a relegation fight. Spartan Race losing three quarters of a million pounds a year. He knows what it's like to walk into a broken organization, to earn the trust of the people inside it, and to actually turn it around. Sport by its nature is emotional. The fans, the owners, the staff. Everybody feels they have a stake and everybody has a view. This is a conversation about sport turnarounds, but I promise the lessons travel well beyond it. This is the value agenda. Let's get into it. David, welcome. Lovely to have you. Firstly, it's really interesting because sport is something that grips everyone's attention, whether it's watching the rugby on the TV, going along to football to your local club. But why do you think it is so many sports organisations find themselves in financial difficulties?

SPEAKER_00 1:24

I think you've got a unique stakeholder set. I think that's probably the first point I'd make. So when you've got supporters of fans demanding X, Y, and Z and expecting money spent even when it's not available to spend, I think that's where the fundamental point of issue comes from. You've got to be pretty, pretty strong, not to cave into the supporters' demands and requirements. No different to you may have the greatest football manager the club's ever seen, but they're going to run off defeats and the fans say sack the manager. And the owner will almost always acquiesce the fans on that one. I think that's one of the most fundamental points there. You've just got a unique stakeholder set compared to whether it's a retail business or manufacturing business, they're all they're all very different. I think there's a huge a huge human element to sport and sports clubs. So I think that's yeah, that's probably the unique point that just puts an extra layer of pressure on any business.

SPEAKER_01 2:16

You mentioned the fans feeling, the fans' involvement. How much does emotion play a part?

SPEAKER_00 2:22

A huge amount of it. If you see me on Saturday watching Scotland Wales rugby, my emotions went from the depths of despair we might lose to the last six minutes where there was no never in doubt. Highly confident at that point. Yeah, it's i everything's emotional. It's very difficult as well for if you look at sports clubs and football clubs in particular, and to a certain extent rugby clubs. You look at Bruce Craig at Bath rugby, for example, he's a Bath fan. Luckily he's in a position where his wealth allows him to put that investment in without risking his own personal wealth to a material extent, and also supports Bath given that they don't have a large stadium compared to Tigers or Saints, for instance. And the same in football, there's any number of football owners that have just basically ploughed their entire fortunes in with nothing to show at the end of it, potentially just a receivership or an administration, and that's purely driven by emotion, but also that absolute desire to win, and that desire to win tends to cost money.

SPEAKER_01 3:17

So given that desire to win, given that there's long history, particularly in football, of clubs spending a lot of money, ending it with formerly very rich owners who become much less rich by the end of it, and then it all ends in failure. Why do you think the ownership model continues as it is?

SPEAKER_00 3:37

That's a good question. Because I think it's a rich man's fantasy to a certain extent, rich person's fantasy. Especially you look at a number of the clubs who have owners who have fans, who were fans, boyhood fans of a club. And the thing is you can spend money on the best players, but if you've got the synergy on the pitch, it's useless. And I think a lot of the time people don't look at process and procedure, but even on the football side and the rugby side. So you go and buy a £2 million striker for the championships for argument's sake. But if you don't have the players to supply the ball to that striker, it was a waste of money. But sometimes if you get the right link and the right chemistry between players, you don't have to necessarily spend a lot of money. I just don't think there's enough outside of the Premier League where you can make returns. I don't think you're going to get big corporates or consortiums coming and looking at it as a return or investment show, obviously, unless you get to the Premier League. So you're coming in at League Two, League One to a certain extent, certainly National League, it's really a passion play. And that's why it's still got the ownership model we've got.

SPEAKER_01 4:41

No, it's really interesting because there's been more and more investment, particularly from sort of private equity type investment in lower league football, all with that promise of getting to the Premier Ship. Now, presumably there will come a point where not everybody can get to the Premier League. That's exactly right. And then what happens?

unknown 4:57

Yeah.

SPEAKER_00 4:58

You look at Birmingham City, and I read a really interesting article before the start of this season because they they came into the championship at the same time as Wrexham at the end of last year from League One. And Tom Wagner, the chairman, said I think it's something like 16% of some of the 16% of the championship have parachute payments at any one time. And Birmingham City came into the championship without that. They their income, because they've got like a Tom Brady, as a minority investor, and therefore they attract the brands that would never ordinarily look at Championship Football or League One. But they're saying their revenue this year in the championship will be on a par with those that parachute payments. And were they to be able to compete straight off the bat into the Premier League, their revenue in year one in the Premier League with all the sponsorship endorsements would put them about ninth, I think it was, in the Premier League revenue table. There's a very different model. So you've got American Private Ector with Nighthead Capital having come in. That one makes sense because you've got the size of the club. It was what I hate the term sleeping giant, but they really were. They should never be in the National League or even League 21, probably. They are they probably are a championship club without if run properly without the Ryan Reynolds and Rob McLehenys of this world. Then you look at, I take for example, Peterborough United when I was there playing in the championship. I mean, uh by far the most squad budget in the league. It was a battle, a battle uh for that whole season in championship, but very lucky and went on a great run the year before to get promotion in the first place. And again, probably one of the smallest budgets in League One. But again, that's where if you have a certain number of players that gel together and they can go and get the momentum, it's you can get there. But yeah, unless you can find the next Birmingham City, who I think will probably end up in the Premier League, but then you can look at the Premier League and say West Bromwich Albion are quite a quite a big club, but they yo-yo between the two, Southampton have yo-yo between the two, Leicester City. Obviously, Leicester have now got enormous problems with points deductions and the like. But yeah, I don't think likes of Birmingham City, if you get if you can get that sort of opportunity, then it makes sense. But would you go with the greatest respect to Mansfield Town? You're not going to take them to the Premier League unless you're just lobbing hundreds of millions in for fun.

SPEAKER_01 7:06

Yeah, it's really interesting because you've got those who, as you say, Birmingham City is a great example. There is a large history to the club, they get decent crowds even when they've been not performing well, and the other associated commercial revenues and so on still hold up because of who they are. And a similar thing happened when Leeds United were down in the third tier, they were still getting 20,000, 25,000 a week, which was absolutely remarkable. So have clubs like let's take Brentford as an example, they got to the Premier League, they appear to be reasonably secure, perfectly happy with, in effect, being mid-table, developing players, selling them on, and spending the proceeds to keep at a certain level. Do you think that's sustainable?

SPEAKER_00 7:52

I th I think so. And Matthew Benham, that's a really interesting model because obviously his background and the sticks in particular and the gambling world, they've just created this model to something similar to Brighton and Hovalbian, to be honest. They built a stadium that was modest, I think it's late 20,000. They've not gone for 40,000 seat a stadium because they may well not have filled that. They've gone for a stadium that is a modest size but containable. And had they not had the success they had, it wouldn't have been at place in the championship. They'd have still filled it in the championship, probably that level. They know who they're going to get as the next manager for three managers down the line. They have a there's a huge database and research function around players, and they're looking at everything. They're not just looking at the basic stats, they're looking at personalities and culture, and will it fit with the culture? So clubs like Brentford cultures everything. And you have to fit into that culture. They're not going to change that for any given player coming in. They do their homework better than most clubs. So around the sort of player due diligence and it's the sort of the intangible pieces as well. It's not just how many tackles, how fast they run, how far they can run, etc. It's will they fit into let's call it for lack of better terms of the family feel of Brentford as a club. Them and Brighton for me stand out as very much family-friendly clubs, good community clubs, and they're just they're not going to push the button too far to try and chase European football. If they get it right, they're got a fighting chance of getting into Europa League Europa Conference. But they're not going to they're not going to bet the bank from getting there. As long as they are in the Premier League and they finish probably 14th and above, give or take, they're quite happy because then they comply on year on year.

SPEAKER_01 9:26

And that sounds like a really sensible way of doing it, a prudent model that doesn't take into account success. Because from some of the discussions I've had, there are clubs who, in effect, try and fund themselves in advance of success. And if they're not successful, then things start to fall apart.

SPEAKER_00 9:43

How many times have we seen, especially in football, the manager sacked, and the new manager comes in and changes two-thirds of the squad at the next transfer window because he wants his players in the team. Now, the expense of maybe taking loss or some of the players you sell, the ones you bring in is the sighting on bonuses, there's transfer fees, etc. etc. Whereas if you look at Brentford and again Brighton, it's seamless when they change coach. And then we tend to sack their coaches go on to almost perceived to be the bigger club of the next step in their managerial career. They've already got a plan. Nobody's seen Keith Andrews at Brentford becoming manager there. We look at the job he's not because this process, this proper process. Everybody knows what they're doing. I think you'll hear this phrase from turn around everybody stays in their lane. If everybody stays in their lane and does what they're meant to do, the end result tends to be pretty, pretty impressive and pretty positive. And that's what Brentford does and Brighton do. And then you take Manchester United as an example, maybe Tottenham Blockspur as well. Change the manager, they change half the squadron. We don't have a certain such player that will suit that manager, so we have to go and do it. But getting more financial pressure along the business.

SPEAKER_01 10:49

I really recognise that as a Manchester United supporter, I've I've noticed that many times over the last few years. But I think in some ways that's a very hopeful, that's a very hopeful thing that we do have clubs like Brentford who perform successfully and still have that emotional attachment with the local community. I think if you look from the outside, the professional game in England certainly has far too many professional clubs. And I think I don't think anyone would argue with that. But I'm not sure if there's any answer looking in the future. Because I read something the other day, wouldn't it be great if we had some kind of franchise model around football? Yes, it would, but can you imagine you get we're not gonna have Liverpool and Everton, we're going to have Mercy Pirates or something as the Liverpool-based franchise. Is that going to work in England? No. What's the answer, do you think?

SPEAKER_00 11:37

I also I actually don't know. I wrote a white paper way back in I think it was about 2009-10, maybe. Because looking at Scottish football as well. In the days when there was a lot of chat around Rangers and Celtic potentially joining the English Premier League. So we can't just join the English Premier League. You know, 24 clubs of the championships were going to be pretty cut out by that idea. When I came up with the idea that if the Scottish Premier League would join it, the entire Scottish Premier League would join with League One. She'd end up with the League One North, League One South, League 2, North, League 2 South. And then basically the bottom two leagues in Scotland would really become regional leagues. And then the two winners of the winner of League 1 North and South would automatically go into the championship. And then it'd be a playoff for the last place between League One North and South. That way, Celtic and Rangers would naturally gravitate into the championship in a fair way by winning. And then if they get to the championship, then that's up to them how they then proceed from there to the Premier League. And then that way you will some of the clubs would have probably gone part-time at the lower end of League 2 in England as well. Because a lot of these clubs just aren't sustainable as they are now. And we've seen some pretty sad cases of Scumthorpe in the last few years going down a pretty nasty path. There's any number of other clubs you could talk about in that way. As another one, Macklesfield. But again, down to a benefactor. That's ultimately how it's happened. Although, again, you look at that as a quite an interesting test case because what they created in the main stand was a new bar and restaurant, a gym that has subscriptions to the community. They've done a 3G pitch rather than the grass, which is fine in non-league. Obviously, when you if you've got to the football league, you can't do that. But they're generating non-match day income. And they're creating something sustainable but also right into the community. So that's quite an interesting model. But again, you've got it's still coming up back to a benefactor to get them up and running.

SPEAKER_01 13:25

Yeah, it keeps coming back to the same thing, doesn't it? We have wealthy people with deep pockets who are willing to take a bet on investing in football. Just thinking more broadly, so David, you've been working in sport a long time now. How did you become such a specialist in effect sports advisory?

SPEAKER_00 13:43

Yeah, so it was a bit of luck, really. I was in the ops team, did pre- and post-merger work. The deal space dried up in 08-09. There were a number of redundancies within the team. And I've been quite fortunate. I'd met a non-exec director of Colchester United in my local golf and country club and spoke to him pretty much daily about football. He was a football nut. And he managed to arrange for me to come present to all the football league clubs at one of their quarterly meetings in Warsaw. And off the back of that, got a bit of traction. And from then on, GT, I then focused entirely on sport. And it fitted for me because I'm a sport nut myself. So just to get to talk about something that you absolutely love makes life quite easy from a job point of view. And then just use my ability to win work thereafter, once I left Grant Fountain. I've been in very interesting situations and found myself in interesting roles, whether it's at Blackpool, Peter Bunita was really interesting. Spartan race was really interesting for many reasons. And yeah, just garnered knowledge. I've got a great contact base in sports, so tend to be able to find out what's happening at any given time in any sport and look for the opportunities as and when they come up.

SPEAKER_01 14:48

So tell us a little bit about some of your experience. You mentioned Spartan, so that was very interesting. Tell us a little bit about the situation there.

SPEAKER_00 14:54

Yeah, so Spartan race, obstacle course racing, mass participation. So common sense dictates that if it's mass participation, you're selling and it's like any event, you sell the tickets first. Therefore, you know how much money you have in the kitty to spend on the event. And somehow Spartan race in the UK were losing what £750,000 per annum. And the US head office in Boston, they decided there was there wasn't a market in the UK for mass participation, which was interesting given that tough mudder were flying at the time. And so I I took it over, became UK MD of the franchise, and I just used common sense to be honest. There's things that we had a marketing manager who was on, for argument's sake, I think it was about five grand a month for two days a week. And she then had three agencies all on around 10 grand a month to do all the work. So I said, well, it's clearly not working because taking sales aren't there. So I I got rid of all the agencies she left as well. I brought in a marketing manager from the human race business and who knew mass participation. And that was I think I think he was paid something like 35,000 a year. But you got somebody that actually knew mass participation. And then I took interesting, I took a young lad, relatively recent graduate from Bill Kenwright's theatre and he'd created this piece, he was a rocket scientist, he was super, super intelligent. He created this piece of software that he called the Easter. And it's interesting because you think about Spartan race, tough mudder all these, you've got your different distances, no different to a trio sun these days that everyone everyone likes to do. So you've got your you've got your 5k Spartan race, and that's gonna be groups of girls and guys, families, stag weekends, hen weekends, having weekends away, it's 5k and it's a beginner over the course of the 12 months that the tickets are open. You know that it's gonna be fairly flat at first for the 5k, and then with little spikes in it towards the end as people think, actually, I'll do that. Then you go all the way through to the 50 kilometre, I think it was called bear race or whatever it was, overnight. It was a 24-hour thing through the night, and you know that it's only the hardcore to do that. So they're waiting for the tickets to come on sale, and straight away, so you know that the marketing curve of the sales curve is going to peak really quickly in the 50 kilometre one, and then it plateaus. But some of the other ones can be slow burn with a couple of spikes. So we start to look at, and he was able to do this as he had done with Bill Kenwright's business, the methodology you put on the bank, you sell tickets. It's that simple, and you control costs. So from having all the historical data we had from Spartan, we could see where to actually spend the marketing spend to maximize the sales. And so it was very successful. There's even little things still. Everybody gets a beer at the end of the race. Now, when I first met with the team that was there, and they were saying that they were buying in the beers at some fucking 60 pence a unit. I was like, why are you buying beer? I said the easiest thing to do is product. So I got in touch with Brew Dog, and you and the guys were there. I said, if you want to sponsor us, we don't want any money, I just want product. And it saves something like 30,000 pounds. Just something as simple as that. So a lot of the Spartan was just common sense. And then the the US got really interested again because it was making money. And they wanted it back, so that's what we did. And I cheapied across the team that had been at Kinross into the Spartan-owned UK Spartan race. But it's really interesting. I enjoyed that because it was literally just common sense.

SPEAKER_01 18:10

Yeah, it sounds fascinating, David. As you say, so often it's common sense. Yeah. Just looking at things, taking a fresh look, maybe taking that step to step backwards and being able to see what's happening and say, actually, why are we doing it this way? You'd be the same.

SPEAKER_00 18:24

A fresh set of eyes is sometimes all that's actually required. Because when you're in the when you're in the weeds and but you can't see the weeds of the chaff, it's difficult. Whereas you get coming with a fresh set of eyes and you're looking for stuff deliberately because that's your job, it's just that little bit easier.

SPEAKER_01 18:38

Yeah, yeah. Although I suppose in some situations you don't always get that chance to look, take that step back and consider it. Think about your time at Blackpool, for example. Tell us a little bit about that because that sounded like a fascinating assignment.

SPEAKER_00 18:51

Yeah, we were appointed by the court receiver to go in and run the club. And that one, it was interesting. We just myself, my former colleague Ben, we basically pitched the receiver the day before the court order was made and said we'd like to go in and run the club. And we had a couple of meetings and it was decided we would go in and run the club. And yeah, that was an interesting one because there was the not a penny more campaign from the fans for about five years prior to that. So a militant as well. So the Oyston family, who they've done a good job in terms of getting Blackpool to the Premier League back in 0910, but they then got gritty with the money. And there was a minority shareholder. When they were taking out dividends, they forgot that they actually had to pay the minority shareholder as well. And in the end, he obviously wanted his money and went down the legal route. But the fans weren't putting any pennies in at all. So almost an entire boycott of the home home games to the extent the away fans wouldn't spend any money once they were inside the club. They joined and helped the Blackpool fans do that. We're seeing with a couple of other clubs who had it at Sheffield Wednesday not so long ago. But yes, they were getting crowds of 600, 700 in a stadium that holds 17,000. And it was all the way fans. And then the Blackpool fans would go to all the away games because that money wasn't going to Blackpool and the owners. So we got there and the stadium was pretty dilapidated. The Irish Care doesn't help met particularly well. Seagulls and pitches were having the time of their lives because there's never any fans in the grounds. Then we we found staff who were confused about what was going on. They worked under the Oyster family, didn't necessarily want to work under the Oyster family, but they had. And there was a there was an element of gaining their trust pretty quickly. Because these two random blogs turn up to say, actually, we're gonna we're gonna be helping to run this football club. So it was it that there was a huge piece of culture and getting people back back in a positive mindset. And then two, three weeks after that, we had the first home game coming Saturday, and we opened the stadium to maximum capacity against Southland United. That's where the last minute equalised, I think, make it true all, which just helped things. But everything everything was broken. I've got pictures on my on my phone of air conditioning units that I was terrified were going to fall on supporters' heads outside because all the supports were rusted. The man safe cover on the stand was broken so you could get up there, but some of the stanches were actually almost flimsily uh moving around because of corrosion and rust. And there was a huge community piece there. It wasn't just financials, but we had to demonstrate to the Football League that we had enough cash flow to get to the end of the season to avoid 12-point penalty, which would mean catastrophic. And we managed that, and that fundamentally changed the season because had we gone down, that's a very different outlook into League Two. Whereas we consolidated in League One, new ownership came in. Simon Sadler bought the club in about June of 19, so we started on the February of 19, and that obviously then gave them stability across the board. Things like sponsorship with betting across the entire shirt, so front of shirt, back of shirt, back of shorts. And because nobody wanted to sponsor Blackpool because of all the bad publicity. I think the shirts were grossing around thirty five thousand a year on sponsorship, and it was a a local betting company that were mates with the Oysters. And that was why and I I'm pretty anti gambling when it comes to football clubs and football shirts. I think that you know I would want if my kids were uh buying a club shirt, I want them wearing the same one that the that the heroes, whether it's the ladies' team or the men's team, you want to be wearing the same shirt. I think it devalues the the draw of it. But I had basically six weeks to turn that around because if you you've got to go to print on the shirts with ARRA, the kit manufacturer at the time, they needed to go to manufacturing. And I went to the council, and luckily the chief executive of the council was also a Blackpool fan. So very much played that this is a community asset. Within Blackpool, there's so much, so many other challenges going on that this needs to be a beacon of hope for the town as a whole. Um, we came up with a really interesting sponsor. Do we use the tourism budget? So we had visit blackpool.com on the front of the show, and then on the way shirt, we used the opportunity to get a male mental health campaign of the councils called Get Vocal. We put that on the away shirt to start a conversation around male mental health and addiction and all the things that were happening in Blackpool. So again, I my view was that the football club had to be the starting point of all that. Then we got Merlin Entertainment involved. They sponsor the family stands, they got the Madame de Sauz and the ballroom and the tower and in Blackpool. And we came up with an idea for kids to get in the family stand, they got a free sandwich every home game, caught survival flower in Blackpool because kids the kid poverty was a huge issue in Blackpool. So some of them weren't eating constantly at home. So we were providing them with some nutrition if they were there. So it was a f it wasn't just a financial turnaround, it was culture, it was community, and the the thriving now. We went back two November's ago and we were greeted, still greeted like heroes, which was really lovely. We weren't allowed to buy a drink all night, which was hilarious. But yeah, that was hard work, but it was fun. It was a lot of fun because you were bringing joy to a lot of people, you were turning around a civic asset, really. By the time we got the three sponsors on the shirt, we were grossing 200 odd thousand, which is higher than Sunderland and who were in League One at the time. That was fantastic. And that was and it was all non-gambling. I almost got a deal away with gamble aware to sponsor a start. I went the entire opposite way from gambling. I was keen to get that done, but just couldn't quite get that one over the line. But yeah, we did some really good work there, but we had no HR function. Basic things such as DDS checks. We've got children in the stadium at every other weekend, we've got the academy, there were some challenges around that that we had to address and deal with pretty quickly. But you know, we basically made it a blanket that every full-time member of staff was DBS checked and we kept records and we didn't have an HR function when we walked through the door. We had to re we had to rebuild the financial statements for two years of cash books because there was nothing. It was a lot of great work. And then we had a four-star questionable four-star hotel within the stadium. We had fire doors were compliant, the kitchen was even going to put the kitchen as like. So bit by bit we had to just find pockets of cash where we could or get the sponsorship money in to allow us just to make sure that the stadium was actually compliant. And then we did little things, just again, good news stories. Local company gave us volume kind for the change room to be fully refurbished and make it feel like a more professional home change room. So there was a lot of intangible pieces to that one as well. It wasn't just about the money, it was across the board. It was funny, probably the best project I've been involved with, I'd have to say. Oh, it's fascinating. And then the next season they got promoted to the championship.

SPEAKER_01 25:16

You talked about the coming in and finding all the staff were very demotivated, some probably didn't want to be there. How did you manage to turn that around?

SPEAKER_00 25:27

To a certain state, it was just being open and honest with them. And actually, a lot of the time using the hardest word, which is no, because they suddenly thought we'll be able to do this and this. But transparency and honesty, and also with Ben and I, we were very tied. So if they asked either of us a question, they would get the identical answer. And the staff knew that there was no gaps between the interim chief executive and interim COO. I think that engendered trust. And also you've known me for a long time. I'm fairly outgoing, I'll be a positive voice around the room. And my door was always open, so they could come in and talk at any time. But also meant that I could hear what was going on in the out on the floor. And if there were issues that hadn't been brought to my attention, I could just get involved with and deal with them, nip them in the bud. But but they were good staff, they just needed they hadn't had any direction. They'll drift. So giving them structure and a common purpose of we want to avoid the 12-point penalty, we want to just survive until we have an owner because we don't know when the owner. It's like when you're selling a business in distress, it's no guaranteed timeline. You can think, oh, hopefully four months from now we'll be in a position where we're done. But almost never runs to that timeline. So you've always got to have another couple of months of cash in the background just in case.

SPEAKER_01 26:39

Yeah, that that's great. Because I think so many, not just in sport, but in so many turnaround situations, that kind of involvement and openness and transparency with everybody involved is often missing. Yeah. Because what people want is certainty, whether the certainty is good or bad. Because being open and keeping that communication going is so important because you want to motivate people to do the best they can in the circumstances.

SPEAKER_00 27:02

And that openness and transparency is also reflected upwards to the Football League so that they were kept abreast of everything that was going on the whole time. Because you've got to make sure that they're comfortable with what's happening so that they're able to then make a decision not to give us the penalty, and we didn't get the penalty in the end.

SPEAKER_01 27:15

Which is a great achievement in itself, it sounds. And the other question I had was big local fan base, they had their campaign, their boycotting effect. How do you persuade them to come back? We didn't have to do any persuasion.

SPEAKER_00 27:27

As soon as the Oyston family left, it it was done. Yeah, I mean, they you have very different elements to Blackpool support as well. So you had the Not a Penny More campaign, which is run by Blackpool Supporters Trust. He had a supporters group called the Muckers, who were the hardcore, behind the goals, homing away every game. And then I think there might have been Blackpool Supporters Association as well. So you had too many, you had sort of conflicting, conflicting groups all wanting slightly different things, but ultimately all they wanted was the football club back. All of them. And we had to play with we had some fun in games and with other things. Security company we had to change, and when they finally lost the contract, they started to try and cause issues by whispering in certain people's ears. Myself and and Ben said certain things about them behind their backs, which we hadn't done. And of course it riled certain members up, and it was quite tense at one for a period of time for a couple of weeks, and then they realized that those people being played by security companies just tried to cause trouble. Well, that it's the sort of stuff you don't think about in these situations, but when it is when it masses so many people, you get these situations.

SPEAKER_01 28:32

Yeah, it goes back to what we were saying earlier about the emotion. The emotions involved in sport are so powerful. Yeah. That it's always the word we did at Scottish Rugby, I was always conscious of the fact that there are so many people who feel they have an emotional attachment, whether they watch Half an Hour of the Six Nations once a year, or whether they're players, supporters, members of rugby clubs, whoever it is, they have this expectation that they need to know what's going on and whatever they want is really important. So managing that against basically the basic things about turning a business around and getting back to financial, a good financial position is always a huge challenge.

SPEAKER_00 29:07

Yeah. That's it's it's yeah, the stakeholder pieces we can't said at the start of the podcast, it's just so unique and sport. And trying to keep everybody happy is almost imp impossible. It's just do your best to cross the board wherever possible. So tell us a bit about Peterborough. Different challenges, I suspect. Different challenges, yeah. A number of challenges. But no, Peter, so Peterborough, the former chief exec, had been there for 17 years, wasn't a he was a reluctant chief exec. He basically just assumed the role 17 years ago. And yeah, again, the staff hadn't had the direction possibly for a while. Unique challenge of having three owners with three very different personalities and three very different agendas, which always makes it quite interesting. We had Darren McCantony, who long time owner of the club, and Darr is very much about player performance, the first team, cash flow, and by that literally just seeing what cash is in the bank and winning football matches. And that was his domain. Football was his domain. So Chief Executive Peter United does not get involved in football. You run the business, and the football stays. But that comes really quite difficult because you don't know what the owner's going to do in terms of budgets and just spending against what you agreed the season before. And then with the two Canadian owners who are no longer part of the club, one of them is very much about the academy and the ladies' team, and the other was about the new stadium and building our own members app, seasoned to fans app, where you could have Posh TV, etc. etc. So you had to combine three very different opinions. Playing in the championship called clearly the lowest budget in the championship, so always flirting with relegation from the moment I got there in the December. Um went on a went on an interesting run through March 8th, one almost stayed up. Went down by they went up going down by four points. And then Reading had to suspend a six-point penalty, which should have been applied that season. And as we now see with Reading, you I myself and the Barnsley chief exec at the time. We were two the two fighting not to go down to a certain extent. It was always a chance one of us wasn't going to go down, so we got to touch each other. And I'm sure you found this with Scottish Trump and the other unions, it's quite collegiate at a certain level within football clubs. All the chief execs actually just want to help each other, right? We all want a successful football club. We can't control what happens on the pitch but off the pitch. You can actually really be quite collegiate to join up. So we wrote to the football league saying we're aware of what's going on at Reading. We're basically saying this before we're relegated, we don't look wanted to look like sour grapes doing it retrospectively. We believe there's a case to answer that suspended six-point penalty but be handed down the beat enforced this year because actually it relates to this year's finances. So there's no point doing it next year. And they didn't go with that, and we got relegated. But that the one high point at Peterborough was playing Manchester City in the fifth round of the FA Cup at Peterborough. Played Bristol Rolls in the third round, then we beat QPR in the fourth. And then I was planning to have a nice quiet Sunday after the QPR game. And I said, Oh, before we go out, the kids let's just sort of see the draw, just so I know we can't got the draw. I'm not coming out today. But the problem is by that point, we only had we only had sort of two weeks to turn that around and make that, and again, repeat to be an item, the level of finances there. That was a big money maker for us. That was worth a million pounds of additional revenue in the end over the course of the FA Cup run out playing Manchester City. We found spaces in the stadium, we didn't even know we could tweet hospitality in. We we sold everything. We had quite interesting, not a debate. I was basically I was told off to a certain extent, but I set the ticket prices for the game. And I said, our match day, if you woke up on the match day it's £30 to watch a championship game. So season ticket holders, because it's not included in the season ticket package, I said season ticket holders are £32 for a ticket and then obviously sessions for kids, etc. Those that buy after season ticket holders is £42. Because there has to be a rec a recognition that the season ticket holders that are there for, with the greatest respect, Cardiff City away on a Wednesday night in January, or two years ago, port rail away type thing. It has to be recognised that they've been with the club all the way through. So they have to feel like they're getting something that they're being acknowledged. And also, if you don't come all the time and you're just coming because it's Man City, there's a premium to pay. But there was a lot there was a lot of there was a lot of pushback from the fan groups about that, and there's the owners went on social media and threw me under the bus because they were getting a lot of stick, but it's the job of the chief exec, I get that. But ultimately, they came to the conclusion that actually the pricing was right, and we could have sold, we probably could have sold it two times over, such as planned. Yeah, but again, within Peter at that point, even the championship, there was no HR function, and we had a couple of issues we had to deal with. The there was a monthly management pack. The first thing I did when I got there was say, look, I need to see a management pack, I need to be able to see month on month where we are, even along from the as safe earlier, the football element. So just there's a lot of professionalizing, there's a lot of realigning staff and getting them focused, and again, upbeat. There's a lot of cultural piece there to get everybody deed up and pointing the same direction, especially when you're in a relegation fight, it can be quite demoralizing. But that's that was it was certainly interesting, and uh yeah, it it opened my different type of scenario within a football club. Yeah, that's great. Set up a new dome training ground with BG pitch indoors. So there's lots of good stuff there as well.

SPEAKER_01 34:28

No, thanks A, that's fascinating. Just speaking on one of the things you're saying, that point's about professionalisation, about how sporting clubs operate and sports bodies operate. Why do you think it is that there are still plenty of organisations out there that haven't been through that professionalization? They're quite happy to spend tens of thousands, hundreds of thousands of pounds on players. But won't hire an extra person to actually make their support support functions more efficient and actually give them better information to make decisions from.

SPEAKER_00 34:59

I think in football, if you look at a lot of the chief execs in football, it's maybe slightly changing now. But a lot of them have come from being commercial director or chief commercial officer and then become chief executive. It's a very different skill set. And with in the sales function, the best salesman never makes the best sales manager. Because the sales manager, the salesperson is hungry, is greedy, is selfish. Well, that's great if you're just doing sales, and that's what you have to worry about, is sales. If you've then got to manage other functions, not sure that's going to work so well. So I think not having the right people in the right positions harems a lot of football clubs as well. But when I talk about professionalisation, day two in the club, my the office that I inherited still had a lot of stuff, match day programs going back 17 years, and there were filing cabinets with board papers from 17 years ago, which clearly didn't we didn't need to hold on to anymore. I sat there by the morning of the second day, and I like tidy I like to be tidy, I like order in my office or my workspace or whatever else. I can't work here, I can I can't do this. So I then went for a wander around the offices, and there's just stuff everywhere. Everywhere. So I basically said, right, next Monday we're getting skips in and we are purging, we're purging this office space. It's not conducive to our best work because there's too much stuff. We need to be clear of thought, clear of desk, clear of office, clear of building. Um and we I think we filled 52 bags of confidential waste in the first two hours, and then well, there's how much stuff after that, but then also I got I got all the offices painted just so they had a liquor paint, and we got a local supplier to come and do it again as a volume and kind deal, so they got some tickets for the staff to come to games, and there's tickets there. Tickets are the one thing, if you're not selling out, tickets are the one thing you can absolutely provide in these situations. But then, even in the entrance to the stadium, it didn't feel like you were walking to Peterborough United Stadium. So we changed all that, we put the big a couple of big crests up, we used the the blue pantone for posh, we put some colours up, it just so when you walk in, it's like there's no mistaking, you've arrived at Peterborough United. And it's that sense of pride. And so when I talk about professionalisation, it's not just the actual nuts and bolts in the business, it's the look, the feel, the culture, giving people pride in where they work. It doesn't just shoe of football, it can be any business. If you don't if you're not proud of where you work and you're not motivated to work, you're not going to get the best out of people. There's little things like that, and they are intangibles, but they make a world of difference. When it comes to the ultimate end game, that's these are the bits that actually help get you in the right direction.

SPEAKER_01 37:30

Absolutely, absolutely. Now that's fascinating, Dave. Just thinking more broadly, thinking ahead, what do you think are the biggest challenges in the next few years for professional sport?

SPEAKER_00 37:41

Professional football, and Premier League football, obviously, the removal of gambling from the front of shirts. That's you've been a number of clubs with a challenge. So you'll have clubs that are used to earn 20, 25 million a year for a betting company for the front of shirt. That's no longer there. Betting companies always paid a premium, and it's a buyer's market right now. I think it's 11 of the 20 Premier League clubs had betting on their shirts this season. So if you're uh, for argument's sake, going back to an old Chelsea sponsor, for example, Samsung, are Samsung going to pay top dollar? No, they're not, because they know right now they've got 11 clubs to pick from, and they can probably get a phenomenal deal for the next three years, and then it will gradually incrementally increase. And that's a challenge there, I think, for rugby and uh certainly cricket and football at the lower level, a lot of aging stadiums and venues where there's a huge amount of capex required, and it's finding new innovative ways to make money. We talk about it a lot in Murray will be the same, trying to make it a 365-day operation where that you're making money every day from the function rooms from the extra pitches out the back or whatever it might be. So I still think there's you need better people in quite a few roles within professional sport, which is probably a bit widely said, but I do think that yeah, we still don't have the right people in some of the right roles. And I've always maintained that uh best commercial directors and best salespeople should actually work in League One and League Two was really hard because that's where they can make the biggest difference. In the Premier League, to a certain extent, deals will come to you because you're Premier League. So you shouldn't have to necessarily hustle. Whereas if you've got the best people, they should absolutely be League One, League Two to make a difference. That's not happened, clearly.

SPEAKER_01 39:19

No, I think that's right, and that whole sort of goes back to what we're saying about that professionalisation of how things work because sport is big business. Yes. However, so many sporting organisations almost don't treat it as if it's a business at all. And that is that's something that's always baffled me because yes, you can have the emotion, you have the passion. I was I can get pretty passionate myself sometimes when I'm watching sport. But even the organizations that I'm working with, I can have that emotion but still be quite rational in the way that I approach it and look at decision making.

SPEAKER_00 39:48

And that's why I like working at football, because I'm not a football guy. So I'm not gonna worry about who's playing on the right wing or centre half. That's just not I want the whichever team I'm with at the time, whichever club I'm with, I want them to win. And I still on every Saturday, I still look at all the Blackpool results, I still look at the PGB United results, I still flash up on my phone from the BBC web app because I want to see how they're doing, alongside the Dundee scores, which we won't talk about too much. Yeah, I think I think the other thing with the with some of the US investment that's come in. I think some of them haven't really appreciated the impact of promotion and relegation on their investment. I think that's a really interesting way, interesting area. I'm watching with interest that we're Tottenham Hotspur to get relegated this season. That could be catastrophic for the club because I know that a number of their sponsorship deals have relegation clauses in them. I know that a couple of sponsors have already walked for the end of the season because they're not happy. I'm speculating, but I wouldn't be surprised if they don't have relegation clauses in the players' contracts because they never thought they'd be in that position. So you could be looking at almighty or almighty shambles there if they were to go down. And I think there's been some investment in clubs elsewhere where they've not taken into account the impact of relegation and the difficulty of coming straight back up to avoid the sort of long-term impact. The parachute payments help, but they diminish year on year for the three years that you have them, and then you're in trouble.

SPEAKER_01 41:08

Yeah, I suppose it goes back to what we were saying about trying to plan and operate where we use Brentford as the example, that you can still survive and you still be in the top tier without actually winning anything. Yeah. Whereas I guess some of these clubs with the bigger budgets becomes very sensitive that if you don't achieve or become relegated.

SPEAKER_00 41:25

The difference is for the top teams, it's not even just about it's not about relegation so much. If we're not in the Champions League and we forecast this year that we will be, yeah. That's however many 30, 40 million off the top line, straight off the bat. So that then impacts the money they have to spend on players and through PSR, etc. Yeah, every club has its sensitivities. Whether you're first to fourth or fifth to tenth or fighting relegation, the impact is substantial for each club in that situation. Just relegation is potentially a lot more terminal if you can't get straight back up. I mean you look at clubs with like some Fulham, Bournemouth, Fulham, Yo for quite a while, and now seems just stabilised in the Premier League. But they have they don't have grounds that are huge. If they've entirely reliant on gate receipts and then obviously sponsorship revenue drop in, that's a real challenge for them outside the parachute limits. So yeah, I think the challenge is always going to be cash across sport. Again, you look at some of the counties in English cricket. I live not too far away from Leicestershire, they get 3,000 tops for games. It's like how we know if is that sustainable? You've got your central money, obviously.

SPEAKER_01 42:30

It's tough. Yeah, now it's an interesting point because I was just about to mention cricket because you were mentioning American investment in football specifically, and maybe not understanding the promotion relegation, because obviously all sport, all major sports in America is franchise model, which there may be opportunities for the the one thing the way we're trying that is the hundred in cricket. Yeah. I have to say I'm not totally convinced by the hundred in terms of its longevity, and I think the impacts it may have on some of the counties. Yes, they've had big payments through the after the auction of the franchise and so on, but I think many counties, particularly those who are non-hosts, have had to use that to pay down their debt. Yep. And then the money's gone, you pay down your debt, then what?

SPEAKER_00 43:10

And I yeah, I know of a number of counties that have had to do that, smaller counties who don't have England matches there have had to go down that route. I think also cricket just doesn't know really where they want to be. Obviously, through up watching Test match cricket and and proper one day there's 50 overgames where you know the Benson Hedges final at Lords or whatever it used to go to from time to time. Then it was T20. Then it was at the 100. I think you've had the T10 in Pakistan as well, the 10 overgames. Yeah. And again, from a consumer fan point of view, that's quite confusing. If you're constantly changing it, I'd like all the graphics on the 100. That's just I'm just old school, I'll let my test march cricket. Me too. But it's opened up an opportunity for invest outward investment to come into cricket. I think the valuations that they were looking at were just they're unfounded first and foremost, and they're pretty ridiculous. I don't In in Indian cricket, the IPR absolutely it's the main sport. The population's enormous. You've got that opportunity. I just English cricket outside of test matches and and for T twenty. Yeah, I don't see a huge amount of money there. Although saying that likes of the Oval Sorry, coach cricket. But they've created a venue again, it's 365. They've got the the the what was I don't know what it's called now, there's the OCS standard's follows now. They've got that rooftop piece for events through the corporate events through the summer. They can host big awards ceremonies in the in downstairs in the big function room. So they're set up big conferences and the likes. But again, you come back to the smaller countries that don't have that luxury. Like they're going to be constantly getting bailed out.

unknown 44:38

Yeah.

SPEAKER_00 44:38

That becomes a point that has to stop.

SPEAKER_01 44:41

Yeah, it does, it does. But again, it goes back to what we talked about a number of times, the emotion. You have generations of people who've been attached to the club, who've been members. I've been a member at Lancashire. Well, I was a member at Lancashire when I was about seven years old, eight years old, and follow the club ever since. And they're in a bit more of a fortunate position, but then they like all these larger organisations, the amounts involved become more, the sensitivities around that become more. And it all is a bit precarious. Yeah. So I'm not sure what the future holds for cricket. Maybe that's a discussion for another day.

SPEAKER_00 45:14

I think it's interesting with Premiership rugby because they're going down the route of franchise, making it a closed league, and then looking to add, for lack of a better term, franchises. I imagine with that would be like some Worcester Warriors if they're back up and running, they could come up as more you keep the traditional names in clubs rather than suddenly creating West Country Wizards or whatever maybe it's um to think it would work. But I think that's an instrument because it means that it doesn't matter whether you're first or tenth, you can build knowing that you're not going to lose again, the American model getting relegated. You could have times where you can have followed periods of success on the pitch. That shouldn't actually impact the commercial arm of the business as much as it could. If you've been Newcastle Falcons for the last however many years, if healing trail finders at the stage are big enough, they were talking because they didn't, and to Coventry and so on didn't quite get there as well. But they've been saying that obviously Red Bull have invested into them, there'll be a there'll be a different beast going forward.

SPEAKER_01 46:07

Yes. Yeah, no, I'm sure that's it.

SPEAKER_00 46:08

That's the way to do it. Let the championship become a sustainable league in itself, and then those that feel they can make the step up can be added to the premiership, but in a sustainable and gradual way, rather than the all or nothing. And we saw Jersey the year of fishing huge investment, investment goes, and the club virtually falls. That's the all or nothing just doesn't work. Whereas if you've got the likes of a covenant in Nottingham, these are some really historic English clubs that maybe can now think we're in no rush, we're just gonna we'll be championship, we'll make it work, we'll gr grow bit by bit, and then if we think we're ready, then we can have a look at it.

SPEAKER_01 46:44

Yes, no, I think that's absolutely absolutely it. The Jersey story is a really it's a good case study in how how important that support is when you're not actually generating enough money to pay for your pay your own way.

SPEAKER_00 46:55

Yep, yeah. No, exactly.

SPEAKER_01 46:58

Well, that's really interesting, David. You've got such a wide breadth of experience, and I really appreciate you sharing it with us. If there's one thing that you would give as advice to anybody who finds themselves in financial difficulties in sport, what would it be?

SPEAKER_00 47:13

There's two things really. One is if you are in financial distress, call for help sooner than later. We all know that if if you've got problems, whether it's banking covenants, whatever it might be, creditors, communication and being proactive are vital to have a chance of survival and turnaround. Leave me to the last minute, push people offside because they they're blindsided up until it's almost too late. I think the theme of a lot of my career is don't forget about the people in the business and make sure that they're on board with what you're trying to achieve, that they feel part of what's going to be a turnaround, hopefully, so that everybody buys in, everybody works hard, and they see the fruits of their labour further down. I think it's very easy to get into the nuts and bolts of the finances, which you clearly have to do to understand where it is, you have to cut costs. But if you take the people on the journey and they understand why you're doing that in terms of cost cutting from day one, and letting if you go into business and you don't know exactly how all the pieces are linked together, and but you can, by talking to the staff, understand the impact of a decision here. So the interdependencies of work streams is probably the best way to describe it, isn't it? It's just understanding that, but the peop you need the people on board to do that so they understand and you don't want the resentment, you don't want people behind the scenes being destructive with just what they're saying to people. You want to make sure that externally the communication is the same. So no matter who's asked the question, it's a consistent message internally and externally. So I think, yeah, don't forget that people is my takeaway because I think too often that can happen.

SPEAKER_01 48:38

Absolutely, that's great advice, David. Appreciate that. And I'm sure our listeners and viewers will as well. That was a fascinating conversation. And the things we kept coming back to, the emotion that drives bad financial decisions, the importance of taking people with you, and the idea that getting a business right is not just about systems and structures, but it's about the standards you set yourselves and for the organisation. Those lessons apply everywhere. Kingsgate has been working with sporting organisations for years, and if I'm honest, there is something particularly satisfying about it. So whether that's in sport or in any other business facing pressure, come and talk to us at kingsgate.uk.com. And if you found this useful, please do subscribe and leave us a review wherever you get your podcasts. It genuinely helps other people find the show. See you next time on the Value Agenda.