Q & A with Arsenal Chief Commercial Officer
AISA: We know you are influential in the club's hierarchy, but please explain exactly what your role at Arsenal entails.
Tom Fox: My role as the Chief Commercial Officer for Arsenal is quite simply to build and grow the multiple revenue streams at the Club in order to maximize the money available for the Board and the manager to spend on the squad. Since we run a self-sustaining financial model and rely only on the revenue we produce as a Club in order to compete and be successful, it's even more critical for us to maximize our financial potential both in England and internationally.
The international marketplace is particularly important for our future growth as our match-day revenue represents a larger percentage of total Club revenue than any of the other top 6 Clubs in Europe. Being successful outside of N5 requires a carefully planned, strategic approach and my team and I spend a great deal of time in this area to ensure that the financial future of the Club does not overly rely on our strong domestic supporter base.
AISA: A number of fans see the club posting profit figures rather than breaking even as an indication that building the value of the business, rather than maximising the team's chances of winning, is indicative that Arsenal is now more of a business than a sporting concern, that priorities are not what they used to be. They would prefer to see excess cash spent on the field rather than sitting in the bank. Do you feel that this view is unjustified?
Tom Fox: I reject this suggestion completely. We all share the goal to create a successful team on the pitch and make our supporters proud. The business only exists so that we can fund the football and all profits are available for reinvestment back into the Club in order to help fuel success on the pitch.
AISA: Coming from an American sports background, what are the differences you have found in Premier League football in terms of your ability to deliver income growth?
Tom Fox: Having never worked for a team in the US I don't really have anything to compare it to. Essentially all sports businesses generate revenue in the same ways, but I suppose the primary difference is that US teams only control their commercial business within a 70 mile radius of the stadium whereas we have to think about a global marketplace. A US team therefore is probably more sales focused and their partnership deals will be local, more numerous and at far lower values. We need to extract more value from fewer deals and are having conversation with possible partners from Lagos to Jakarta simultaneously. That's just a far more complicated and marketing intensive process.
AISA: Obviously the long term deals the club struck with Nike and Emirates for kit manufacture and shirt sponsorship before the new stadium was completed will end in a couple of years' time. How advanced are you in the process of preparing to strike new deals which will prove far more lucrative?
Tom Fox: We are actually making good progress in the partnerships area, but there was a lot of work to do in this area when I arrived. For the past 2 1/2 years we have been building the team and enhancing our capability to have the right conversations not only with our 2 primary partners, Nike and Emirates, but with new and renewing secondary partners. We've had success in secondary partnerships during this time, renewing Citroen and Thomas Cook and signing Carlsberg, Betsson, Indesit, Airtel (Africa) and Malta Guinness. While I can't go into any detail on where we are with both primary partnerships, this early success in the secondary market gives me great confidence that we have the right team and are well positioned to bring both of these up to the market during the next round.
AISA: How realistic do you think it is that Arsenal, once the new kit deals are struck, can match what Manchester United are making in the commercial arena? If it is possible, can you give an estimate of how many years you think it might take before the club is performing as well as United?
Tom Fox: It's not very realistic to assume that striking these new deals will allow us to match what United are doing commercially. We have a great story to tell and sponsors are taking notice, but we have only recently begun investing behind our commercial vision, whereas they started on that journey 7-8 years ago. Since then they have had unmatched success on the pitch, which has in turn fuelled further growth. As a result, they are frequently the Club that sets the high water mark when their new deals are done, take Chevrolet for example, and few if any Clubs can match their commercial appeal to partners today. Do I believe at some point we can catch them? Yes I do, but it won't be in the next 3-4 years.
AISA: Is the idea of getting a separate sponsor for training gear on Arsenal's agenda?
Tom Fox: We're focused on maximizing the value we get from a shirt sponsor, whether that means splitting out the training shirt or not.
AISA: You mentioned United's unmatched success on the pitch. Can Arsenal enhance their value to potential partners if they do not begin to win trophies again? Is the mere profile provided by taking part in the Premier League and Champions League enough for you to do your job effectively?
Tom Fox: Success will obviously help our story, but we can and are making ourselves more valuable with partners already by a) touring to key growth markets, b) building strong engagement with our global fan base through a dedicated and robust digital media strategy and c) adding activation and servicing resources to help partners get the most from the association with the Club.
AISA: The club did not embark on pre-season tours for at least ten years before your arrival. Have you noticed a significant difference in the club's profile since these began in 2011, and if so, is it strictly related to the countries visited or more general?
Tom Fox: Arsenal is a huge Club with incredible support internationally, but the difference that touring has made to our profile has been profound, both with our primary partners Nike and Emirates as well as other large brands looking for sports marketing assets. For them, touring is part of being a truly global Club and is a prerequisite to being in their consideration set. For the fans, seeing their heroes live and up close is what engages them with the Club, and if they're engaged and active then our profile with partners is further enhanced. One good example of this is in China, where we have visited 2 years in a row. In 3 previous years with our media partner in China, Titan, we registered 15,000 fans into our database. In the past 16 months (around both Tours) we've attracted the interest of a larger media partner, Tencent and their portal called QQ, and that number now stands at over 600,000.
AISA: There is a perception that Stan Kroenke is a hands off owner of Arsenal that trusts the people employed at the club to get on with their jobs and produce results. However, those outside do not know what goes on in reality. How involved is he with the day to day work you are doing?
Tom Fox: I'd say that the perception is fairly accurate. Very little if anything changed when Stan's ownership increased from 29-67%. He trusted the senior leadership team before then and he still does. Having said that, he is very engaged and interested in the issues we're dealing with at Arsenal and the Premier League as a whole and he has as you would expect a very well informed opinion on the business of sport and what it means to be a fan.
Tom Fox will answer further questions from AISA members at the Association's AGM on 10th September. All members are entitled to attend. Join AISA here.