Last week I opined that SA President Jacob Zuma would happily swap places with me for a few hours. Reason: Zuma loves “The Reds”, Liverpool FC, and my pleasant assignment was to interview Ian Ayre, CEO of the world’s ninth biggest football club. Given Zuma’s popularity rating among local business leaders, there’s little doubt he’d put Ayre a lot higher on his own ranking than the CEOs he usually deals with. Ayre didn’t talk about the South African President, but did share insights into the club’s relationship with the Discovery Group and offered fascinating insights into the business of sport, especially the way social media has transformed his club’s prospects. Inter alia, how Liverpool FC engages closely with its fans on Facebook (26m) and Twitter (5m) and how the enormous impact this has had on the business. Insights that we can all learn from. – Alec Hogg
Ian you were appointed as Commercial Director at Liverpool FC in 2007 but in 2011, after the Fenway Sports takeover, you were made CEO.
We took new ownership back there and a big part of our strategy was to grow the business because it’s fundamental to underpinning what you want to achieve on the football pitch, which is having a sustainable business that supports that.
We have a great brand, a great football club that has great history and we’ve been able to build on that.
Our owners were very clear when they went in, that they wanted to see the business be sustainable, which is actually necessary now on the financial fair play rules and other elements. Building all of the infrastructure that supports and grows the business, was vital.
So you can’t just go out there and spend the next ten years’ revenues.
In its simplest sense, it’s really, ‘spend what you earn’ and live by your means, rather than overinvesting, which was a problem in the past.
I think it’s good for the long-term interest of all football clubs and football generally – that that’s the case – because it means if you generate a great business and generate great revenue, you can invest that into the team.
It creates a more balanced approach for everyone, a sort of level playing field, which was the ultimate subjective for UEFA when they brought those rules.
You mentioned UEFA, the European Champions League. How important is that in the revenue generation of a club?
Very much so. As a club like Liverpool, we’re always aiming to try to compete in that competition because the Premier League is obviously, first and foremost for us from a revenue perspective.
Playing at the highest level in Europe is essential for the long term.
You can afford not to be in it for a year or two, but you can’t be out of that competition for the long term and be sustainable, and so we’re always pushing to be part of that. Whether it’s the Champions League or the Europa League, which we’ll play in this season.
I was looking at the social media numbers last night: 26 million Facebook ‘likes’ and nearly 5 million followers on Twitter, but I guess if you look at all your social media channels, it’s even bigger than that.
Generally, we’d have about 40 million people interacting – very regularly – on our wide spread of social media platforms, as well as the big obvious platforms like Facebook and Twitter.
We have around 49 social media channels in different countries and different languages (I think somewhere around 16 different languages, currently).
That’s about trying to find Liverpool fans or interact with Liverpool fans where they are every day, and not just around Match Day.
For example, what’s an Indonesian Liverpool fan doing on a particular day, in his particular market, in his particular language? That has really been good for us. It’s given us a much greater touchpoint with all our fans. Just using Indonesia as an example, we have more followers online in Indonesia than we have in the UK.
The most recent Deloitte Money League numbers show that you generate more money out of your commercial activities than from your broadcasting rights and both of those are double what you get at the gate on match days. Do you sell into that social media channel?
We sell in through our online business and obviously, there’s a correlation.
The more people you bring to the media channels, the greater the level of conversion (commercially), so that’s an important part of getting the right structure.
Social media and digital media in general, is one of the greatest tools you can have to reach fans in South Africa, Asia, and the US because you can have a regular dialogue, which is difficult for people who might never get to come to our home at Anfield.
We can have a genuine relationship with them and obviously, that also translates into transactional opportunities.
You mentioned South Africa. You have a very close South African relationship now with Discovery Vitality, which is growing in the UK How does that partnership work?
It’s like a lot of our partnerships…in any partnership. We had a strategy. When we started to build and continued to build our commercial operation… Generally, any partnership has to be a win-win.
It has to work for both sides and I think it also has to be a brand and an organisation that shares similar values. Obviously, we’re in the sports industry.
We’re talking about healthy living and lifestyle and also, in markets that are key similar markets.
Almost all of our major partners, such as Vitality, have similar objectives and similar markets so when you work together, you can achieve so much more. They’re in great markets. They have a very close relationship with us.
We utilise each other’s brands and assets across our business and their business. Talking to them all here in particular, they seem very pleased with the relationship and I know that we are.