APR
12
2012
Mickey Blue Eyes...
Interview with Robert Elstone
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INTERVIEW WITH ROBERT ELSTONE

By

Mickey Blue Eyes

 

I originally asked for an interview with Robert Elstone after the home cup tie with Sunderland. But it was postponed at my request when the game went to a replay. Then Easter got in the way.

Here it is.

 

Q: Thank you for meeting with me, Robert. It's much appreciated. Firstly, congratulations to everybody at the club on reaching the FA Cup semi final for the second time in three years. Are you satisfied with the ticket distribution methods? Do you think they're fair? Have you had many complaints?

A: Yes, I think we are satisfied. No club has ever got the distribution perfectly right and we have picked up on things we need to learn from, but there's nothing giving us sleepless nights at present - although I'll sleep easier when every ticket is in every hand. It's something we spent a lot of time on initially and we continue to examine progress each day and highlight the problems. We met early the next morning after the Sunderland replay win to examine not only how we would fairly distribute but how we would sell the tickets. It's a fairly complex task to deal with around 32,000 tickets in a two week window.

There are lots of people who have perfectly valid entitlement to tickets. This includes regular match goers, season ticket holders, shareholders, lounge members, players and employees. Our golden rule is that we always try to allocate the maximum amount to committed and regular fans. But that's less black and white than you might think - just who is the most loyal and how should we rank loyalty? We've just had another meeting to refine that process. I think we do a good and decent job on it.

We have a new ticket office manager, formerly with Bolton, Matt Kendall, who was forceful in saying the best method was online and on the phones. Yesterday we had 28 manned phone lines but the vast majority were online. We had some long waiting times but also some very quick transactions. But in the space of twelve hours we got through over 15,000 applications. I think that's phenomenal and I think it's fair to say the vast majority of fans are pleased with how it's gone.

Things get more complicated when it comes to dealing with non-season ticket holders who are regular match goers. That's when we rely exclusively on customer reference numbers and probably the toughest aspect has been saying no to fans who've been to games but haven't recorded them on a customer reference number. It was always our intention to reward regular attendance at Goodison but if you haven't accumulated regular attendances against your reference number then you are likely to miss out, which means understandable frustration for some fans. I have sympathy for that, and I wish we didn't have to say no, but it's the only way we can make a validated assessment. We don't want anarchy to reign or unjustified or false applications - always a danger - to slip through.

 

Q: Have you thought about a system of programme vouchers? That used to be one way.

A: Yes, but it's still not easy and it would be open to abuse. At the moment the only way we can be certain an individual is actually coming to Goodison is via the customer reference number and the data it contains. We had a lot of discussion as to how we should record and reward home and away attendances and what weight we should attach to each. Overall, we feel to date we have dealt fairly and equitably.

 

Q: The main complaint I have encountered has been the limitation on numbers seated together. Supporters who have travelled to away games and sat together through good and bad matches now find they are split up for the biggest match of the season.

A: I fully appreciate that, Mike. I think it is the biggest unresolved issue for football generally, not just this match. Fans like to sit with their mates and it's getting harder and harder to accommodate this.  As an aside, it's something we're wrestling with for our £95 junior ticket - a great product but only if the junior fan can sit with Mum, Dad or Guardian. For the semi-final, don't forget we had a very limited time post replay to identify valid applications, award graded tickets and distribute them. We have a member of the Fan Centre dedicated to Supporters' Clubs and she just didn't have the time, or the data, to put everyone together and as we pointed out, it was probably something the secretaries could do much more efficiently. It would help us greatly if Supporters' Clubs secretaries would ensure individual data was up to date and accurate. Not all of them do that. That means the ticket office could aggregate the applications quickly. Inevitably too we get a few complaints about seat grades where there are different grade qualifications within a group application - in which case, to ensure they sit together, we have to go for the lowest average grade. We can't make it work both ways.

 

Q: So why not make the data requirement mandatory? No data, no ticket. That could be easily written into the software programmes. Wouldn't that close out the problem?

A: We have made it mandatory! But perhaps we've been 'gentle' applying the rules. Our main intent has been to reward supporters' clubs for their loyalty and commitment and I think we have managed to deliver this. That said it would definitely help our job and make it fairer if they too could be a little more diligent in keeping data up to date.

 

Q: As we face up to the semi final you would have to be living on another planet not to sense some ugly tension between some of the fans of both clubs. Is there any joint action proposed by both clubs to try to eliminate the nastiness?

A: We are already talking to Liverpool and the FA about the Hillsborough commemoration on the day. We're looking to play our part in bringing everyone together that way and I'm confident our fans will conduct themselves as they should. We have also been in contact at both communications and administrative levels about relations between the Clubs. It is after all a showcase for the City and the Clubs. Beyond that, I will try to speak to the Liverpool CEO. We need a sense of proportion despite the mutual desperation to win. Yes, it's the biggest match of all. Yes, it matters deeply to the fans and so it should. And yes, we welcome the unbridled passion for this game. But everybody has an individual and collective responsibility to ensure the atmosphere is electric, it's intense, but be aware of where it needs to stop.

 

Q: Change of subject - What long term steps are being made to keep David Moyes at the club?

A: It has to be the nurturing of one of the best working relationships in football...and the relationship between the Chairman and the Manager speaks for itself. I think we saw it recently on 'Goals on Sunday.' In terms of mutual respect I don't think the long term commitment could be bettered. The Club of course wants David to stay long term and the relationship with the Chairman is absolutely key to it.  David also knows all available resources are diverted to him for team building, though we freely admit we wish we had more to enable him to do everything he wants to do. He knows we have also committed support by building the best possible facilities and resources at Finch Farm.

 

Q: When will design of the new Nike strips be made public?

A: Firstly, I want to thank Le Coq Sportif for the great job they did for us. They listened and responded to all the things we said and asked for. They produced a quality range of playing, training and merchandise. I think we meant a lot to them and it showed. Now we have moved on, there is discussion as to whether we will wear the new strip in the Newcastle home game or reveal it mid-June.

 

Q: Will we be sticking to the real Royal Blue?

A: Listen, Mike, there's some debate about what the "real" Royal Blue is! A lot of fans want us to go darker, some want us to go lighter. However, we hear loud and clear the preferences for real Royal Blue, not Navy Blue but dark Royal Blue. Colour perception is highly individual; you'll never get complete agreement on it. We'll try our best and we do know what Everton Blue is...Next season's home strip is one to look forward to.

 

Q: What was the aggregate difference in season tickets between this season and last?

A: There's no getting away from it, attendances this year have been disappointing and the bedrock of the gate is the season ticket figure. We lost about 2,500 season tickets compared with 2010/11 and we've dropped to 22,000. Our highest recent figure was on the back of the 2009 Cup Final when we were at 25,500. This gives us concern and something we're going to work hard to correct through the new prices, better payment options and more intensive marketing. Encouragingly, albeit 'early days', for the Early Bird applications for next season we are at 6,000 versus 4,200 last season at the same time. But the really critical date is the last day of the Early Bird scheme when we sell something like 85% of our season tickets and the 20th April is a date we need to make sure every Evertonian is aware of.

 

Q: What is the maximum number of available season tickets?

A: It isn't fixed. I'll take 30,000 if I can get them!

 

Q: Well, I think the struggle will get sterner because of the national economy and its depressed state. That said, if the miracle happens and we win the Cup......

A: .....MIRACLE!?.........I've been saying all season that the squad listed out on the back of the programme was a good squad. It's never a threadbare squad and it wasn't one acquired on a shoestring. Of course, January saw some significant improvements but it is a squad that can mix it with most and a squad that the majority of the Premier League envies.

 

Q: Talking of January, is there any chance of Steven Pienaar coming back permanently?.....Or for that matter Landon Donovan?

A: As with all player decisions, it's David's decision and I know he will be well advanced with his playing assessments and needs already.  If he wants to bring them in it's up to us to try and sort out the finances to do it. And financially speaking, this season is still all to be played for. There is a lot of money at stake. Final positions in League and Cup will make a big difference and we need to see how all that lands.  As we've said, it's an efficient, lean business that diverts all its cash into squad strengthening and breaks even before finance and interest charges. However, this season has been more challenging with reduced gates and an inexplicable lack of live TV appearances.  Money will continue to be very tight.

 

Q: What are the subscriber/visitors figures for online Everton TV?

A: It's no longer a commercial operation designed to generate subscription revenues. It's a free service with the objective of informing our fans and building loyalty in our fan base. We now look on it as a marketing tool, which means I'm asking some hard questions of our team. It doesn't mean we're going to scrap it, but the questions are: does it grow our fan base? grow our loyalty? and ultimately fill seats in the stadium? If it doesn't, as a lean business that asks hard questions of itself. Then we have to ask what useful affect it does have. Having said that, I can see that websites are now about moving pictures and not words. We have to deliver what fans want.

 

Q: Is the Walton Lane development finally dead?

A: No, far from it. The original funding came from fit-out budgets pledged by our partners Kitbag and Sodexo, supporting a long term lease that was going to cost us less than the uplift in royalties that Kitbag were going to give us. So it was a no-brainer. Then we hit unforeseen problems with the security held by Prudential (the Club has a long-term liability with Prudential taken out in 2002). We are now back in discussion with our partners and with the City Council. Kitbag still want a brand new shop, we want some new offices, and Sodexo would like some new hospitality facilities. We all want to make it work. Now we have meetings later this month to revisit the financial model. If that can be made to stack up I would be inclined to press the button straight away. We have also discussed grant and loan support with Liverpool City Council. So, no, we haven't given up on it.

 

Q: Has there been any improvement in the prospects for a new ground?

A: Sadly, it's a 'no.' Despite spending considerable time revisiting many other sites and examining other options, we have nothing that looks like it might work.  As before, there's no shortage of designs, and probably a number of sites that might work and be available. Unfortunately they all lack the vital commodity, which is financial backing.  A stand-alone project without some form of third-party support will not work for Everton commercially. And I don't think there's a stadium built in the past 20 years that hasn't benefited from 'outside' public or private support; possibly the Emirates where the sale of Highbury for apartments was such a key component in the funding.

We don't have a waiting list for season tickets and in reality what we need is 'quality rather than quantity' - no restricted views and better sight lines, and better concourses and corporate facilities and this uplift in quality probably would be unlikely to service a significant debt burden. That's our problem. The situation may change in time. But we still believe it will be a major retail project which unlocks funds. Sadly, it is hard to see this happening on Merseyside in the foreseeable future.

On the possibility of a shared stadium, Liverpool are playing a straight bat. Basically they've ruled it out. So until they change their minds we can forget even the possibility. To put a marker down, on every occasion we have stressed our interest in a share would only be as an equal partner on all ownership, commercial and operational aspects.

As to redevelopment of Goodison, I saw some feasibility work done by Chelsea on potential redevelopment of Stamford Bridge and you can see parallels in redevelopment issues with Goodison. They have very similar problems to us in this matter, construction costs and phasing of individual stands, uncertainty on adjoining land acquisition, a constricted site and a footprint that is way short of what would be required for a modern facility. And though the numbers were bigger for south west London they faced the same issues even though they have better financial resources. If anything underlined our own analysis of Goodison problems, it was that. No, there can be no material redevelopment of Goodison in present circumstances. Much as we'd like to, the three stands we need to improve are 'land-locked.' We cannot make redevelopment stack up.

 

Q: Is Goodison Park in imminent danger of losing its safety certificate due to timber construction in the Bullens Road stand?

A: No, it isn't.

 

Q: I haven't kept up to date on UEFA Financial Fair Play regulations. Have there been any changes in the proposals?

A: I tend to lose the will to live on this issue and I know I shouldn't. I have been at conferences where the speaker has been asked to summarise 'Fair Play' and they just don't seem able. There is no summary version. Early in my career some good advice was, 'If you can't walk across the street to the man or woman opposite and explain something to them in one go, it's too complicated.' Well, 'Fair Play' fails that test. Seriously, the broad principle remains that clubs have to live within their means. And spending is limited to the monies earned through the gate, from broadcasters and from sponsors. It means a billionaire Tranmere Rovers fan could not make them European Champions in the next decade. That funding is 'outlawed,' or rather he could build them a stadium and a training ground and slowly, and without guarantee, they build a team living off gate receipts that might progress up the table. Now, everyone has a view on that - whether that's right or wrong. Personally I don't agree. The professional game in England has always allowed benefactors in one way or another to fund our clubs and now they can't, or they're heavily restricted. I'm not sure what's wrong with it? As to UEFA enforceability, I am waiting to see how much accountants and lawyers make out of it! In our case, without getting into the minutiae, it would seem to put us in a slightly stronger position. Many of our rivals rely on benefactor funding. But I think it doesn't allow much room for clubs to break out of an economic straitjacket - it might even ingrain present monopolies more deeply.

 

Q: If they haven't adjusted the bonus pools it will tend to exaggerate that effect. The difference between the so-called Champions League and the Europa League prize money is still too wide in my view. Will the recent hike in bank interest rates hit Everton's financial position?

A: It's not going to help. We have a good relationship with a supportive bank but yes, it means we have to fork out more funding for our borrowings. It makes life more difficult, that's for sure.

 

Q: Is it true we have to sell one major player per season to keep going?

A: No, it isn't. It is true however that our budgets, whilst well controlled, remain very tight. We lose £5m per season based on certain playing-related assumptions and by running a tight ship. If we do better on the field then that number drops. We fund any losses by out-performing on the pitch, out-performing at the gate or in sponsorship, or by borrowing - which is harder and harder to achieve, or ultimately by trading players. There are no secrets to that, to how we fund the Club, and I think fans understand that and appreciate that all money goes into Finch Farm. I think they also know that we are working hard to find the other way to fund higher wages and transfer spend over and above that list, which is by new investment from wealthy investors. 

 

Q: What does it mean financially to the club to reach the Cup semi final...prize money etc?

A: When we got to the Final in 2009 we probably earned £5 million. But we had more TV appearances and we charged more at the gate. We also incurred additional costs which have to be deducted from this figure -  hosting games at Goodison, as well as increasing player bonuses as we progress through the competition. This season we've only had the two games against Sunderland on TV and we've consciously held prices low. To get it into further context, every League position is worth about £1 million and each League live broadcast earns about half a million. The FA Cup is a nice bonus but it remains very secondary to League revenues.

 

Q: Are we in danger of "doing a Glasgow Rangers"?

A: Of course we're not. One of the problems I have to live with is the amount of speculation around football and the Rangers saga is typical. I doubt if anyone knows the full causes and reasons for Rangers' problems, nor the scale of them, and I certainly don't intend to add my two-pennorth.  In our case we have a clean and fully audited position with the tax man and we are totally aware of all aspects of our cash flow, liabilities and risks. We operate best practice at Goodison Park and that's the way it will stay.

 

Q: What is the current wages ratio? Last season it ran at about 69%.

A: It's roughly the same, slightly higher, testament to us 'pushing the envelope' pursuing higher ambitions. Of course, we saved when we transferred out Mikel Arteta, Ayegbeni Yakubu and Jermaine Beckford, but then we had new deals for Marouane Fellaini and Ross Barkley and new wages on Darron Gibson and Nikki Jelavic and, later, Steven Pienaar and Landon Donovan. A small minority of fans say don't take risks that will increase debt, most implore us to pay more. We think we achieve a good, if very challenging balance.

 

Q: Still, there's a scientific fiscal point where it gets unmanageable isn't there? You identified it yourself as a ratio of 60% when you were at Deloitte.

A: Yes there is. There's an element of fixed cost at Goodison and Finch Farm that has to be funded. And ultimately of course, we always have to square the books. There's also a time when we need to invest outside of the playing squad in the 'bricks and mortar' and the resources at Goodison - much as we try and delay and defer that spend.

 

Q: Has anyone shown interest in buying the club or made an offer? If yes, who?

A: In the autumn we had discussions with a dozen or so potential buyers or their advisors. That's a dozen parties who had taken the time to review and sign up to confidentiality agreements. At that time we felt confident something might come of it. But nothing did. It went quiet again and there was very little rhyme or reason to that silence.  It is unpredictable and irrational. And whilst it is a process which would test the patience of any man - almost every Club has been the subject of some dubious speculation, a process that seems less buoyant at the minute as a result of global economic worries. It is one we place at the top of our list and continue to work with partners around the world to try and get the result we all want.

 

Q: Why won't the club place a value on the sale?

A: Because there isn't a fixed price. It's not like buying a house or an expensive car. Valuing a football club is not scientific. It is imprecise, subjective and without rules. 'Normal' businesses are valued on predictions of future earnings - what are our future earnings? Football isn't predictable.

There have been several recent football transactions where values have either been made public or speculated on. As we've said before, perhaps these are a useful starting point? One thing I will repeat, to date we have not got into serious discussions on price and it hasn't been a barrier.  And like a stuck record, the most important task of all is to make sure the investor has the wherewithal and the commitment to take Everton forward.

 

Q: There are some implications, if not actual accusations, that the directors are siphoning money out of the club. What is your response to that?

A: I am dismayed by it. This football club is transparent, open and honest. We have repeatedly said the directors are not taking money out of this club, not in any form of remuneration or expenses...full stop. If some people don't believe that or the figures we provide, then it's akin to saying I'm lying. And I find that sad, disappointing and disrespectful. Not only are there no expenses or remuneration, there are no related, 'preferential' or cosy deals on anything we buy or deals we enter into. It's that simple.

 

Q: Following on from that, the big question for some people revolves around the single figure in the accounts for "Operating Costs" at about £24 million. Is it possible to list the details?

A: That figure is made up of around twenty-five cost centres which like all areas of the Club are monitored constantly.  It includes every item of expenditure that we incur besides wages. It is considerably less than many other clubs of similar size and there is absolutely no frivolous, extravagant or unrequired expenditure in there. To add to this, we've just hired procurement specialists to drive this number even lower.

365 days a year we maintain Goodison and Finch Farm. We pay rent, rates and a substantial utility bill.  We maintain some of the best pitches in the League. We support a modern, secure IT and communications infrastructure. This season already we've hosted 24 games and paid the police and stewards, provided food in the lounges and supported an expensive matchday operation.  Less often this season, we have travelled to away games and funded a large travelling party in a way that ensures we have the best possible chance to win the game. We sometimes fund a large travelling party of fans! Like all businesses we pay lawyers and accountants and advisers and auditors too much, but football is a business that attracts attention and we need help from our professional partners.  It is a large and complex business. It's a Club where costs are managed and minimised.

 

Q: So is that figure of £24 million the operating costs for Goodison Park and Finch Farm combined?

A: Yes, the total operating costs of the whole club, everything other than wages. The notion that we waste money is just wrong. We have low staff numbers (and I see what other Clubs have) committed people who work in sometimes difficult surroundings and do it well. This club is proud that it runs a tight ship and has excellent team spirit.

 

Q: How do you respond to personal criticism of you and Bill Kenwright?

A: Bill has it a hundred times more than me and I don't know how he keeps motivated and keeps bouncing back. And to do what he does every transfer window needs great resolve, great motivation and unswerving commitment to the job in hand.  

When I get out of my car with my wife and two lads and have people jabbing their fingers through railings and swearing at me, it's wrong. I know very well the euphoria of Fulham Broadway after the FA Cup win at Chelsea on penalties and would always maintain I can't chose that one day and not expect criticism the next, but it has gone too far this season. And no one will take responsibility for it. It just makes me sad because we want the same things, I think, and I put more into it achieving that than any other job I've ever had, and by some distance - just like my colleagues and especially like the Chairman. And those who know me well, know I'm not after a medal. I just want to have made a positive contribution to a great football club.

 

Q: Well, talking of good fans, Terry Seddon of ESCWARA asked me to ask you if there's any chance of the team doing at away games what Leeds used to do years ago - pre-match, go over as a team to the visitors section and acknowledge the travelling fans? He thinks it would help a united spirit between players and fans.

A: I think it's a great idea. I'll ask our head of communications to have a word with Phil Neville and see if we can organise it. We'll always try to respect that kind of idea and do something about it. Are Leeds a good benchmark though? As a lad from Barnsley, I know how they can polarise opinions!

 

Q: And finally, meeting with fans groups and liaising with fans organisations - are you happy with how that's going?

A: It's something this club should be proud of. We've made a concerted attempt to do more and more during the last few years of travel up and down the country. One of my colleagues is in the Isle of Man soon, and I'm at Old Swan. In my opinion anyone who can do Rice Lane (my baptism of fire!) in the middle of the Kirkby inquiry can do anything! And we get on great with Rice Lane by the way.

The Fans Forum is finding its feet and is mutually useful as a sounding board and asking questions and I'm confident that everyone is happy with its progress. We still have some streamlining to do to improve it but there's a lot of goodwill and determination in it. We're about to go out with a Fans Survey and we're discussing the possibility of a season ticket holders 'Meet the Fans' night. We did it last season and it was a success. We have set ourselves the task of continuing to build a benchmark club by talking, listening and providing a sense of ownership with our fans and grow our fan base and building loyalty. None of it will happen overnight and it will take a lot of hard work but we're determined to do it.

 

Q: Well, I hope you succeed. Thank you for your time, Robert. And fingers crossed we beat the old enemy in the semi final.

A: It was a pleasure. See you at Wembley!

 

 

Comments about Interview with Robert Elstone
3
We can never know for sure if people are telling the truth or not, we have to go with gut feel. And my gut feel is that he's being honest with everything he's said there. Good interview Mickey.
Ronnie Mukherjee, Merseyside, 1:23 PM 23/04/2012
2
Any chance of the Club holding an AGM any year soon?
Ian Taylor, Stockolm, 1:34 AM 13/04/2012
1
Fair play to Robert here. He seems to be open and honest, and gets a lot of stick. And I was one of the fans who hugged him in the queue for the tube after we beat Chelsea last year on pens at Fulham Broadway - He sang "Baines will tear you" with gusto!
Dave, London, 4:01 PM 12/04/2012
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