The Midlander: Tom Glick leading Championship financial revolution

18 August 2011 02:04
As part of the new season, the Midlander will be out and about interviewing some of the movers and shakers among the region's football clubs.

Sometimes these will be players and managers. On other occasions, such as this one, they will be from boardroom.

Kicking off this series is an interview with Derby County's chief executive Tom Glick.

Big player: Derby chief executiveTom Glick is also on the Football League board

The American's influence now extends further than Pride Park, having been elected onto the Football League's board 15 months ago.

He has strong views on the financial issues facing clubs in the npower Championship and the division's decision-makers are in the process of addressing them.

It was with this in mind that he agreed to an interview this week.

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We have re-stated how important it is for all of us to sort out our businesses into an entity that is sustainable. We have now put an action plan into place.

We know we are going to have 46 great games. We know this is a great competition. The problem is that at the end of it almost everyone has lost money.

Three teams will go up, three teams will go down, but everyone else has lost money. Why?

Therefore, we have said: 'Let's fix this.' If, collectively, we have the stomach to do this, it can be done.

If we do, owners, chief executives and boards of directors have an entity that is sustainable for the future.

They can invest in their stadia, their infrastructure, youth and communities. Not just be chasing the next cheque or worrying about what they are going to get for their left-back when the transfer window opens, which is what often happens.

We have to determine our own destiny.

Did this current model in English football seem bizarre to you, coming from the United States where owners can make money from American teams, for example?

It does, yes. I don't think it's a good thing. When such a situation exists, you do not get longevity and consistency in the ownership of clubs.

If you look at all great businesses, one thing they have in common is continuity of leadership.

If the owner of any club is going out of business every three years and you have to find someone else to take control and fund the operating losses, you can never get ahead. That cannot be good for any business.  So, having a new business model is essential.

In charge: Nigel Clough is charged with restoring the fortunes of Derby County

What are you putting forward, exactly? Is it similar to the one already in place for League Two?

There are differences. The system that operates in League Two is based on a percentage of turnover. What is being proposed for the Championship is less prescriptive. It will operate on a balanced budget basis.

That therefore gives you discretion on how much you, for instance, spend on player wages.

You can theoretically, spend 90 per cent of your turnover on player wages, as long as you balance out what you do. It doesn't give you much to play with - another ten per cent - but you can work like that if you want to.

It allows us all to get to the same place and spend an 'appropriate' amount on player wages.

Big spenders: Leicester City

Therefore, to use a current example, if you look at how much Leicester City have spent now - say ?10m - how is that going to sit with the business model you are proposing?

That still has to be discussed. We are looking at putting a set of rules in place where clubs are incentivised to operate on their own and not to run up massive operating losses. Massive operating losses cannot be sustained.

Are you talking about transfer embargos, financial penalties and the like?

Idon't know what has been in the public domain but it would be reasonable to assume those are the types of punishments we are talking about.

For instance, the National Basketball Association has what's called a 'luxury tax' where if clubs do spend outside their revenue, the rest of their competitors say: 'Okay, if you are going to do that, we are going to tax you.'

Where does that money go?

That's to be debated.

Thewhole question is: How do we control wage inflation among players? If clubs can't be self-disciplined enough to run themselves inside their budgets, what we are saying that is that we recognise that, so let's putrules in place that force us to for our collective good.

We want to put a system in place where teams don't overspend their budgets. It's bad for business, anyway.

It'sthe single biggest threat to our game. And the overwhelming majority ofclubs are in support of this. It's where we are going, definitely.

It won't hurt the game. It will encourage the good owners in the game to stay in. And it will attract better owners still.

Let's face it, who wants to get into an industry where everybody loses money?

Weshould want to attract good business people and that is not a bad thing. But it is difficult to do that if any owner is just looking at a monthly cash burden. Then it just becomes a hobby.

Inthat case, you attract people who are just in for two or three years, willing to take a punt and spend for that period of time.

Pride of the Midlands: Derby can boast an impressive Championship stadium

Do you think (finally) blind self-interest has led you to this point?

Ithink there have been external factors. I think the economy has helped.People are having a far more difficult time, driving revenue. It is harder to get fans to games.

But,I think in general that owners and chief executives have reached the point where they have just turned to one another and said: 'How are we going to keep doing this?'

Presumably,if there is a surplus, then you can create stronger clubs through investment in community projects and youth development which is hit and miss at the moment, dependent on how individual clubs view its' importance.

How quickly do you envisage getting this up-and-running?

We are focused on getting a new system in place by the 2012-13 season.

Within this year we would be hoping to vote for this. Every contract we sign this summer and January and next summer we will have to ask ourselves: 'How is this going to fit in with what is going to happen next summer?'

If we can't, then the natural consequence is more operating losses, increasing debts and additional administrations of professional football clubs. Simple as.

It's an amazing game. The top line is that there will be more people watching, playing games on their iPads and iPhones.  FIFA12 on their Xbox.  It has a bright future. The status quo is that there's going to be more rising stars, great matches but more clubs will go out of business. We will have a cycle of more owners. They will lose money and start screaming: 'Get me out.'

Ambition: Derby have brought in several players including Craig Bryson (left)

At the moment, we make a small operating loss. We would prefer not to. But we will do that because we have spent money on the squad.

This is a critical year for us to make some progress. You need to protect revenues. We want the fans to keep the faith. We were light in one or two areas, so we have invested

If things go our way and we have a good cup run, we might break even. That's okay, we have made a conscious decision we are comfortable with.

But we don't want that to continue. It is in no-one's best interests. So that is why we have, as a collective, decided to do something about it.

Tom Glick, thank you.

Source: Daily_Mail