Executive interview.
Article Type: Interview
Subject: Sports associations (Officials and employees)
Pub Date: 08/01/2009
Publication: Name: International Journal of Sport Finance Publisher: Fitness Information Technology Inc. Audience: Academic Format: Magazine/Journal Subject: Sports and fitness Copyright: COPYRIGHT 2009 Fitness Information Technology Inc. ISSN: 1558-6235
Issue: Date: August, 2009 Source Volume: 4 Source Issue: 3
Topic: Event Code: 540 Executive changes & profiles
Product: Product Code: 8691000 Athletic Associations NAICS Code: 81399 Other Similar Organizations (except Business, Professional, Labor, and Political Organizations) SIC Code: 8699 Membership organizations, not elsewhere classified
Organization: Organization: Union of European Football Associations
Persons: Named Person: Taylor, David (UEFA General Secretary)
Geographic: Geographic Code: 4E Europe
Accession Number: 206866151
Full Text: An Interview with David Taylor, General Secretary, UEFA Conducted by Troels Troelsen, Copenhagen Business School, with assistance from research assistant Linda Gaisie Andersen

UEFA is the sports governing body for football (soccer) in Europe with 53 national associations as members of a democratic organization. UEFA is also the most important member of FIFA, which is the international governing body for football. UEFA organizes all European Championships and Youth Championships, as well as two trans-European playoffs every year between the best teams from the national leagues. The better teams from the 53 national leagues are, with some playoffs for the positions, playing in these two leagues. And the better the teams from a national league are performing, the more teams qualify the following year. Up to a certain maximum though, this is a political matter to decide upon. The most important league is UEFA Champions League (ChL), the "second league" is named UEFA Cup. Additionally UEFA governs soccer in Europe, developing programs, law, lobbyism etc.

The 53 nations participating in UEFA have a combined population of 700 million. This includes the 27 European Union countries as well as other big nations such as Russia (143 million), Turkey (71 million), and the Ukraine (47 million).

The popularity of a professional sports league might be measured by the magnitude of the television contracts. The figures below represent the figures accessible to Troels Troelsen and may contain some inaccuracies as most figures are confidential. All figures are per year. ($/Euro = 1.5, $/[pounds sterling] = 2)

UEFA TV-contracts and media rights:

* The 2006 revenue for Champions Leagues (ChL) and UEFA Cup: $ 900 million

* UEFA's TV gross revenue for TV contracts for the European Championships (every four years): $1.2 billion in total = $300 per year (www.uefa.com)

Europe-Big-5 football leagues (conferences):

* UK ($2.8 billion), Italy ($850 million), Spain ($700 million), Germany ($ 600 million), France ($950 million) per year = an impressive $ 5.9 billion (TV Sports Markets) in total for the Big-5

Minor football leagues (all other 48) (estimated by Troelsen):

* $ 1.8 billion/year

The total for all the TV-rights for all European football is approximately $ 8.9 billion per year.

David Taylor was born in Forfar (Scotland) in 1954. He was educated at Edinburgh University with an LLB Degree in law. He qualified as a Solicitor and practiced until 1985, during which time he added to his legal qualifications with a MSc in Economics and an MBA from Strathclyde Business School. He joined the Scottish Development Agency (now Scottish Enterprise) in 1985, and held a succession of senior positions before being appointed the first Director of Scottish Trade International, a body set up to promote Scottish business men overseas. In August 1999, he was appointed the position of Chief Executive and Secretary of the Scottish Football Association (SFA), becoming only the sixth Secretary in the SFAs history.

Questions

Q: In which aspects do you think a career in sports business differs from a typical business?

A: It is a difficult question, because in many ways sports business and non-sports business are the same. The need to run a business and manage a business in an efficient and profitable way is the same in sports business as in other businesses. With regard to football, the vast majority of people play on an amateur basis and the vast majority of what is done in the football associations is to support football development. Sports business, in terms of professional sports, is similar in many ways to other businesses in terms of the way in which it has to be managed and run. The real difference, of course, lays in the nature of the business itself--the sport--the effect of the business of the playing of the games and the uncertain outcome of the games. That in itself makes it a very difficult business to manage--rather than playing to put your competitors out of business you are trying to defeat them on the sports field. There is intense competition, but not in the same way as in competition in the business world. In the sports sectors/industry, there are set rules and regulations--it's a much regulated industry in Europe.

Q: Which managerial challenges arise from the cultural diversity of the different European federations?

A: I think you have to be sensitive to and appreciate the difference in cultures. UEFA consists of 53 different cultures. I think we, as a European body, have to be aware of this and still achieve what we want to achieve through the associations even if we have to approach problems differently. Personally coming from the North West fringes, I use to think it might be blocks, like NW, SE, but it doesn't quite work like that, and that is probably just as well because there is much more democracy. I think people recognize and enjoy working with and in UEFA. I think the staff that come here from the national associations are prepared to work for the European goal and ideal. And I find across the board that it works, and that is quite encouraging. One thing we need to keep a watch on is governmental interferences in sport. We have had a number of other cases where the government wished to have a more controlling part, but our sanction is that then the nation will be banned from international competitions. It's a pretty powerful weapon to say all your clubs will be out of European competitions and your national team will not be able to play. You can imagine the reaction from the general population to an interfering government where the result would be that all teams couldn't play in European competitions. It is our job to keep an eye on such situations and make sure that we have a sport that is run by sports people, not by politicians.

Q: What are your biggest challenges in the years to come for UEFA and your challenges as General Secretary to manage these changes?

A: The challenge is to run a successful organization--the question is then how do you define success? Continuous development of the game of football for Europe, and the motivation for that comes from making sure that the grassroots of the game are healthy. It is important that we not only nourish football but all sports. I start with the proposition that all sport is good. And the motivation for promoting football is, for me, the love I have for the game and getting children to see and experience it as well. I don't need any more motivation than that. My job is to help the game to prosper and develop. I work closely with the President (Michel Platini, one of Europe's most famous former football players) to make sure the sport never stands still.

Q: What are the largest potential areas for new/increased income for European football?

A: We recently signed a broadcasting deal with China, Japan, HK for EUR02008. The interest in Asia for top level professionals is very strong indeed.

Q: What about North and South America--NA with the strongest market and SA with the best players in the World?

A: SA is very strong in football terms--but of course the major economy is the USA, and it is still growing its own professional league. There is interest and money generated in the USA, but not nearly at the same scale as the other big sports there. I think the US market is a long term investment. In terms of its own development, own leagues, and franchises, it is moving in the right direction. It's not the pro league of the 1970s. No, it's a longer term model. From our point of view of selling European football there, we realize that we are up against the other big sports there. I was at the Super Bowl in February to see and had a look at how the NFL does things. Some of the major sponsors are sponsors of ours (Adidas), and we are also interested to see how they cooperate with competition organizers in a different sport.

Q: How about the Internet?

A: The challenge is how you value this. There is a danger TV markets in the long run will fragment sufficiently so the value is reduced significantly. But that is not the position today or in the near future.

Q: Who owns the rights to a ChL match?

A: We believe, as tournament organizers and promoters, that the rights are ours in terms of the organization. There can be some contradictory views on that but there is not an appetite from anybody to want to test the propositions from a technical legal point of view--the fact is that we organize, we manage, and we generate the best value from central marketing. The clubs understand, welcome, and respect that.

Q: What are the biggest economic and/or financial challenges/risks for European soccer?

A: Well there are a few. First of all there is the importance of the broadcast revenue we have been talking about--that is so significant, any major downturn would be a cold blast, but we don't see that happening--but it has to be seen as a major risk. Of course there are other risks to our game. Obviously the principal income is generated through our competitions and there are risks to these in terms of different competitions being organized, and by clubs moving out of European football, although I don't see it happening. Then obviously there is the risk of terrorism. The ongoing risk of potential football hooliganism affecting the image of the game is not a big risk, but still needs to be managed. And also more recently the dangers that might be associated with betting scandals and bribery corruption--if these go unchallenged they could devalue the value of the sport in many ways, including internationally, because one of the key values that UEFA is associated with is integrity.

Q: Should the UEFA guidelines or regulations for the clubs' cash flows and equities be tighter or the club accounting and financials be more transparent to the public?

A: I do think that we should have more transparency, but here again we have the issue of how much regulation. We operate in a free market and economy in Europe and clubs are businesses. The clubs accepts football authorities as regulators with the laws of the game on the pitch and in terms of competitions and organizations, but other than that they wish to have maximum freedom. I can understand that point of view; however, for the overall development of the game and the sport at national and international levels, I think that there needs to be reasonable regulation to ensure that certain business standards are respected.

Q: Turf (playing surface) is seemingly a necessity even in the best leagues for several countries in Europe. Is it OK to leave these decisions for the national associations?

A: I think due to the climate, there are no issues about playing on turf, and no issue over the usage of it for youth sport and community sport. Artificial turf is now very high quality and has improved so much the last few years. From my personal point of view, home, I am not a supporter of turf for the very top end of the game. Under normal weather conditions grass is the optimal surface from my view. Also, in many places it is less expensive to maintain even in good weather. I always get a little bit nervous when decisions on football issues are made for economic reasons.

Q: What are the biggest challenges for European football now? (Forms and transfer of ownership, Internet, income optimization, TV-rights, internalization, etc.)

A: The interesting issues in terms of ownership of clubs bring us back to the issue of self-regulation of the game. On the pitch there are some problems about that. From time to time there have been calls for legal action to be taken against referees, or leagues or organizers of matches where their cases have been denied. It's remarkable the length that people will go to complain or object to decisions. In certain countries there are different forms of ownership. In Germany there is a type of ownership where only a certain amount of shares can be available to the general public in terms of institutional investments, so we have a different situation in terms of the financial structure of German football companies. Some clubs want to change that and others don't. We do have to follow the law--football is not above the law, and there are different regulations for different countries in regards to private companies. So ownership is an interesting thing but the clubs have to find their own path.

Q: The EU-commission has set regulations for sports and issuing exceptions from normal competitions and labor regulations. Where do you see the biggest, unsolved, and yet to come clashes between civil law and the EU's sports white papers and EU sports law in general and what would your suggestions be for solutions to these conflicts?

A: We have been looking for more from the EU in terms of the specificities of the sport and particularly the specificities of football. If you take matters to ridiculous lengths, then everything can be challenged in the court of law including the rules of the game. What we need is a greater definition of specificity of sport.

Our interest is not a commercial interest from the sports federation--our interest is maintaining the cultural contribution of football to European society.

Q: Do you see UEFA collaborating with researchers in the academic communities--and which areas would be relevant to do more research within?

A: There are some interesting articles on the comparison of the systems and league systems. And in terms of specific areas of research with potentially practical applications, this could include home grown players, and the effects of the transfer windows. There are quite a few business topics you could imagine in terms of ratio analysis that could be done from a financial perspective used for benchmarking purposes.

Q: How important is UEFA's take on corporate social responsibility (street crime, violence, racism, etc.)? Should the upper hand belong to the clubs, the players, or national associations?

A: UEFA recently gave notice that we have given our commitment to wider social responsibility issues. We have a fair play and social responsibility committee for the first time, we have an increased level of financial commitment to different areas. We follow UN's standard 0.7% of our turnover committed to good causes. We support the wider issues which affect on society because football is, in our view, an important part of European society and we need to play our proper role. We feel the weight of that social responsibility on our shoulders.

Q: How important is economic transparency for the clubs (e.g., yearly reports and player transactions)? With your background in the FA and the many clubs in administration, can increased economic transparency help in avoiding similar situations for other leagues?

A: I think transparency can help, but it is not the only answer in terms of receivership and clubs going into administration. I mean they go into that for a variety of reasons, it is difficult to generalize. I can think of two or three clubs that experienced financial difficulties and required a major financial rescue. I can think of another club who got into difficulties because they decided to move their new stadium and were not able to find the initial capital courses. A lot of the business information you get tends to be 12 months old, which is too old for transparency purposes. Another problem with transparency is a lot of the big clubs are listed on the stock exchange and stock exchange rules prevent information being known by the public before it has been made to investors and institutional investors, so you cannot get information at the same level at the same time. So transparency is useful and there should be more, but I don't think it is the whole solution. Although this is not universally welcomed by some clubs, club licensing can potentially be used to create certain benchmarks regarding spending.

Q: Do you think it is the UEFA's or the national associations' responsibility to create an efficient code of conduct for (against) devoted football fans?

A: I am very much in favor of UEFA getting closer to the fans of clubs. Fans have particular views and different perspectives in terms of the game that we play. We had our first meeting with fans at the end of last year here at UEFA, but it is difficult to get a representative group of fans. In Scotland we helped develop the supporters club for the national team and it is very successful. I think its an important thing to reinforce fans' associations with clubs, the identity of clubs and of national teams because the politics of the of the business that concern UEFA are also concerns of the fans.

Q: The NFL and AFL study and examine all other professional leagues worldwide. What can UEFA learn from the other continents and professional sports leagues?

A: We are going to look at the 2008 Super Bowl because we are going to have ChL finals on Saturday evenings, from 2010 and onwards. So the Super Bowl weekend becomes the closet comparison to a ChL weekend. In terms of the actual league structures, we are always interested in looking at other formats, but it would take a lot of persuading to alter the European football pyramid format and systems. We must not forget the traditions of the game in our desire to innovate, modernize, and adapt the game. There are certain things about the sport that people can advocate to change, but people jealously guard their culture and that's why I don't like to see to many changes toward the game. So yes, we do look at different systems and leagues and formats, but in the context of knowing the strength of our current system.

Q: The big US leagues are trying to export their sports to Europe and Asia. We have, for example, seen a regular NFL game played in London. Could you see UEFA encouraging similar activities to promote European soccer into the US and Asia or would you leave this to the clubs and leagues to consider?

A: I don't see UEFA specifically cultivating this trend. Our job first and foremost is to promote football in Europe, not to do it in Asia or in the USA. Although we do support Vision Asia, a project set up in Europe to help them grow and develop the sport. In the short term I do not see us encouraging teams to be part of the development-I think the teams happily do it themselves.

Q: Do you have any final comments you would like to add?

A: Football is a big business, but the values of football should be within the business and be transmitted out with the business in a more obvious way.
Gale Copyright: Copyright 2009 Gale, Cengage Learning. All rights reserved.