Buying a Professional Football Team? 10 Lessons Learned #8

This is the 8th post dealing with do's and don'ts in the process of a club takeover. The intention is to post 10 lessons learned on LinkedIn, all based on real-life experiences of the author. The first post on May 1 set the scene for this series by explaining why the acquisition of a football club is different from a takeover of a regular company. The success rate of takeovers of football clubs is very poor. The first 7 lessons learned included:

Lesson 1: Hire an external Auditor to carry out a professional Due Diligence Analysis.

Lesson 2: Recruit the right Team.

Lesson 3: Develop, Communicate and Deploy a Shared Vision & Long Term Objectives

Lesson 4: Hire adequate Managerial Capabilities.

Lesson 5: Ensure appropriate Funding and Structuring

Lesson 6: Lead merge between Cultures

Lesson 7: Roll out a Sponsors & Supporters Retention Plan

Today we elaborate on LESSON #8: STRENGTHEN THE CHAIN OF COMMAND

In most football clubs the Management Committee (the “Leadership Team") consists of 3 individuals: the President, CEO and Sports Director (Football Manager). Everyone has his/her own areas of responsibility, but all strategic decisions and high cost supplies and/or investments (e.g. player transfer, capital expenditures to stadium, leasing contracts, staff hires, IT systems etc) are -a priori- to be approved by the group. A President’s focus is on the macro perspective of the club's performance and the CEO's focus is on the business perspectives. The focus of the Sports Director is on all sporting aspects of the club including both the 1st team and the academy. In order for these 3 to work efficiently their tasks should be clearly defined. In general the following roles and responsibilities can be assigned to the leadership team:

PRESIDENT. President is a strategist and a top decision maker of a club, focus on the big picture, "vision and strategy", and sets the tone and positions the club's brand image and operations. Should he be the owner, he should pro-actively and timely be seeking funding if necessary.

1. He is the Chairman of the Board and presides the Management Committee. Other optional responsibilities: Club correspondent for the federation, external affairs, Head of business club, stadium and shirt sponsors, cooperations and/or M&A activity. 
2. Sets an operational philosophy that is performance driven, maintains a high level of employee morale and motivation, is sensitive to and driven by fans needs, and meets the highest ethical standards. Ensures that all operations are conducted in full compliance with applicable laws and regulations. 

CHIEF EXECUTIVE OFFICER or CEO. The CEO focusses on the execution, turning the vision and strategy of the President into results ensuring day-to-day business operations of the Club. The CEO delegates most of the tactical and operational aspects of the strategy implementation to the senior management team members.

1. The CEO is a member of the Management Committee, heads up the business side of the club (both B2B and B2C) and the infrastructure including stadium and academy. He is the responsible housefather for issues such as day-to-day integrity, adherence to the club’s code of conduct etc. 
2. Works with the Board, keeping it informed, to enable it to fulfill its oversight role. 
3. Develops, implements and monitors the business strategies, plans, organizational structure, policies and controls, as approved by the Board&President. Oversees financial performance. 
4. Supervises staff and develops key senior managers.
5. Seeks opportunities for business opportunities for the Club, drives top line growth, accelerates its fan-centric strategies, and improves efficiency. 

SPORT DIRECTOR. The Sport Director focusses on the execution, turning the vision and strategy of the President into results ensuring day-to-day sporting operations of the Club.

1. The Sport Director manages the 1st team and oversees the youth academy.
2. Develop long term plan, policies and values for the team and the integration with the academy. He develops the strategy and objectives for youth development and he is responsible for the rollout hereof.
3. He manages and executes transfers and contracts and is responsible for players and players' on-boarding. He is the linking pin between the leadership team and the head coach.
4. Develop and rollout scouting policies and execution.

MANDATE. A mandate is the sum of expectations placed on the CEO & Sport Director by stakeholders towards what will be accomplished, by when, and to what standards. It is the license given by the Board and President to the CEO & Sport Director to deliver on these expectations. 

CASE STUDY: In one of our transactions the President was also 100% shareholder. In addition, being a former player and a club manager, he knew the needs of the sports side of an elite team. It goes without saying that this President is entitled to have things executed his way. Whereas the organigram -and no doubt the leadership's initial intentions- may indicate that all big decisions would be taken as a group by the management committee (i.e. President/CEO/Sport Director), the pressure, lack of time and individual temper/emotions will often compromise the integrity of decision-making processes. In the beginning of a season, right after a takeover and a relegation a club is in a shock, people are disoriented. A complete reset, a new order is required whilst there is no time. The first games started, we lost. The call for strong leadership was on before the season even started, it got louder over time, all eyes on the president...

PITFALLS:

• Mr President, Stop running the Club and my Staff. The danger is that the President takes the place and/or overrules his CEO and/or Sports Director. This is detrimental for himself, but even more so for the efficiency and credibility of the other two. Should this happen too often, the latter two become "lame ducks", they won’t feel trusted and empowered. Second level managers will start reporting directly to the President. This causes frustration and confusion to all parties involved. Indirectly, the entire organisation suffers as the chain of command is broken. Proper delegation includes the assignment of responsibility, granting of authority and the creation of accountability. Some argue (I don't always agree) that the President’s most important job is "to employ a great CEO and sports director - then to get out of their way”. Should the president be a more capable candidate for the job than e.g. the Sports Director -and he has the time&energy-, then he should save the associated pay-check and add the job to his own scope of responsibilities.
• No feedback loop. In order to continually get better, people will have to be given and ask for feedack. Management meetings should take place weekly and should always include feedback loops, to re-check the alignment with the vision and objectives, re-set consensus and potentially repair what is broken.  
• Shifting the Goal Posts. It is surprising how often Presidents delegate authority to a CEO and then cuts across that delegation at random as and when he feels the need. Of course, the President’s intervention is justified if there are serious compliance or crisis issues. However, few things are more frustrating to a CEO and a Sports Director than a President overruling or bypassing his authority. The possibility that the President will shift the goal posts in the middle of the game creates great uncertainty for the CEO and/or the Sport Director. 

The two most common reasons to quit for a CEO or a Sport Director are:

• Disagreement on the general direction and results of the club (and/or the President's performance or decision-making).
• Role of the CEO/Sports Director. It is essential to a senior officer that he receives an undivided mandate form the Board and the President. The breach of such a mandate will be considered a lack of trust and it will prevent him from delivering upon the expectations. Sooner or later this will lead to frictions and ultimately to a separation.

CONCLUSION: A well-functioning team is based on trust, structure, accountability and transparency. The leadership team should therefore delegate, set goals and communicate wisely to the rest of the organisation, but also within the team! Despite mounting pressure and a lack of time the team should continue to have frequent feedback meetings (there are no higher priorities!) and prepare cohesive actions and group decisions. Subsequently, major decisions/plans/policies etc should be communicated by this team, as a group. For business issues, the internal follow-up and accountability lies with the CEO, whereas for sports related topics the Sport Director is in charge.

The upcoming Lesson Learned #9 of the takeover process of a football club will deal with the following topic: TIMELY ANTICIPATE ON MISSING TARGETS

Questions or Feedback? [email protected]

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Alexander Janssen is an economist holding an MBA from ESCP Europe. For 17 years he was CEO at JURAN Inc (USA), a global management consultancy. In 2012, Alexander took a stake in TopSportsLab (Belgium) and assumed the role of CEO for 6 years, working with elite football teams, UEFA and FIFA. In 2018 and 2019 he was involved in the acquisition of 2 professional football clubs in different European competitions.