CMO Masterclass: Arsenal FC
Arsenal chief commercial officer Tom Fox explains the difficult tasks of a football club marketer, from keeping new and old fans onside to convincing them that football success must be founded on a financially stable brand.
Above: The Emirates Stadium was built in 2006
“When we win, we will win on the back of our own effort, on the back of our own hard work and revenue that we as a club generate based on our power as a global brand. We won’t win on the back of a wealthy benefactor reaching into his pocket and solving the problem that way.”
These are the words of Arsenal Football Club chief commercial officer Tom Fox. In the eight years since winning its last trophy, the Premier League side has resisted numerous calls from fans and sports journalists to veer away from this approach and invest more money in players. But the club is determined to build a business and a brand on financially solid foundations, even in an era when footballing success in the English league has been defined by billionaires’ spending sprees.
“We believe, and I think our fans believe, that success earned in the way that we’re going about it, in a very difficult landscape and a very challenging business, is the sweeter victory,” he says.
Until this week it might have been hard to find many die-hard Arsenal fans who agreed with him, as manager Arsène Wenger waited until the final half hour transfer deadline day on 2 September to bring in the team’s only big-name signing of the summer, midfield player Mesut Özil.
Fox, echoing comments in June from chief executive Ivan Gazidis, says that Arsenal has recently made a “jump” that gives the club “a much better opportunity to compete for the top players, to pay their wages”. It is largely the result of a renewed £150m deal with its shirt and stadium sponsor, airline Emirates, announced last November. But a lack of top players joining the squad has, until now, been an annual frustration for fans of the north London club since it built the Emirates Stadium in 2006 and started to repay the debt that financed it.
The fans’ ire has implications for Fox, even if recruiting and coaching footballers has nothing to do with him, because although he is chief commercial officer he claims his role at Arsenal is not purely and not even primarily commercial. Before that, he says, comes the imperative of instilling pride in the club.
“We don’t exist for commercial purposes, we exist as a football club, to play football matches, to win and to make our fans feel proud.”
This is what makes marketing an English football team a unique job, Fox argues. Arsenal’s commercial activity exists not to enrich shareholders but only to ensure the club has a sound financial basis on which to “act in the right way and perform on the pitch”.
The fact that Arsenal is trying to do this through creating a sustainable business model instead of through the subsidy of a rich owner presents more than a few sources of tension. As well as the inability to spend as much on players as Manchester City FC or Chelsea FC, for example, another delicate balance Fox must maintain is between the different languages he uses to communicate with fans and businesses.
“The first thing we never do is talk the language of ‘brand’ with our fans,” Fox says. It was something he had to learn by experience after national newspapers and Arsenal supporters criticised him last year for telling reporters “our brand is defined by more than winning”.
But conversely, he adds, “brands do speak that language and they do want to understand the club on a different level from a fan”. To be taken seriously by potential partners, Fox needs to be able to convey Arsenal’s appeal as a sponsorship proposition.
For many sporting organisations sponsorship is now a significant proportion, if not the lion’s share, of revenue, and any money the club has to improve its team exists largely because Emirates has committed to putting its name on Arsenal’s shirts until 2019 and on the stadium until 2028. Kit maker Nike and official partners Carlsberg, Citroën and Indesit also provide ongoing support, as do regional partners in African and Asian markets.
What’s more, having good commercial partnerships helps boost the reach of Arsenal’s own brand because “our marketing budget consists of other people’s money”, as Fox puts it. So as much as fans want him to recognise the paramount importance of winning football games ahead of selling the Arsenal brand to the sponsorship market, without a strong commercial offering their ambitions to spend money on more and better players would be undermined.
The need to expand the appeal of Arsenal to a greater pool of fans and therefore a greater pool of consumers of Arsenal merchandise, match tickets, shirts and other Arsenal-branded products creates yet another set of competing interests for Fox to weigh up. The needs of loyal local fans must be balanced with a growing international following hungry for more involvement and deeper connections with the club.
“Sponsorships are a big revenue stream and they rely on the ability to help project their brand on the back of ours to as large an audience as possible, so clearly sponsorship will benefit from the development of a big global fan base.” Fox explains.
“One of the things that I have said to the fans who are here in London, who fill the stadium with 60,000 people and spend their money to watch Arsenal, is that the future revenue growth of the club will come from outside this area. It’s going to come from our ability to find and connect with all of those fans around the world and make them feel as much a part of this football club as the fans that come here on a match day.”
Both long-established English supporters and newer ones living abroad are important to the club, he says, but he admits that in communicating with the international fan base there is “far more up-side in terms of growing the business side of the football club”.
Fox’s aim of increasing the involvement of fans around the world means creating “as many businesses and pathways for that to happen as possible”. It also means communicating directly with them and improving the club’s customer relationship management, which until recently has been “fairly rudimentary”, he admits. Two years ago, however, a decision was made to put the CRM system at the heart of the organisation, so that it is no longer a function of the marketing department but the first port of call for any contact the club wants to make with its fans.
Arsenal, therefore, has the ability to know whether a particular supporter is more likely to buy a home or away kit, whether they visit the stadium to watch games and whether they contribute to social media conversations with the club, for example. Meanwhile, an eight-year-old supporter might wake up to a ‘happy birthday’ email from one of Arsenal’s star players, which is the kind of communication that turns someone into a lifelong fan, Fox says.
Arsenal supporters’ current displeasure may or may not be tempered once the Premier League season gets into full swing: despite the lack of trophies, Arsenal has now qualified for the European Champions’ League competition 16 years in a row, which no other English team except Manchester United can boast. But for Fox it is clear that keeping the club commercially stable while helping it to achieve results on the pitch will require him to perform several delicate balancing acts.
Tom Fox’s lessons on…
Communicating with fans
”What the fans want is to know that you understand how important this club is to them and how important the relationship is to them. When you start speaking the language of business, it seems as if you’re approaching their football club as if it is a business. We approach the business side of the football club only to help and aid the football side of the club.”
Setting ticket prices
“I think it’s critical that our stadium is full, that the away support section is full and that everyone who’s in that stadium believes they are getting value for money. We have made two price increases in the seven or eight years since we moved over to the new stadium and we have a very robust waiting list for season tickets, which any consultant would tell you means you are not charging enough. But we take the view that the Arsenal brand is better served by a full stadium and more people looking to get in than it ever is by going close to that line and threatening that model.”
Segmenting the fan base
”One of the unique challenges of a football club is you’ve got a 22-year-old urban professional living in Jinan in Shandong province in China and you’ve got a 50-year-old Arsenal supporter living here in London with a [memorabilia] museum in his house. You’ve got 90-year-olds as well as eight-year-olds forming their first opinions. It is such an incredible, broad mosaic of people. I think there’s far more up-side, in terms of growing the business side of the football club internationally, by connecting with fans abroad, but they’re not more important to the club.”