KNOW THE SCORE is a series of talks where Mateusz Lentowczyk – CEO and founder of TISA Group – invites interesting guests to talk about the latest trends, challenges and best practices at the intersection of business, sport and technology.
In the third issue, Mateusz Lentowczyk caught up with Thomas Maurer, founder & owner of FOOTBALL BUSINESS INSIDE, to discuss the challenges and opportunities that small- and medium-sized sports clubs face. The exchange of views on the strategic development of sports organisations led us to some interesting conclusions on:
⇒ How should we define small- and medium-sized sports clubs?
⇒ How can we engage fans with the use of digital products?
⇒ What are the best real-life examples of sports clubs implementing effective solutions?
Read this interview and grasp some of the real-life examples of well-run clubs in the sports industry!
Matthew Lentowczyk: To begin with, could you, Thomas, tell us more about your background and the project you’re running – FOOTBALL BUSINESS INSIDE? How did it happen that you decided to start your own business in the sports industry?
Thomas Maurer: I come from a small town in Austria, near Graz. Since I was young, I was passionate about playing and following football.
I dedicated myself to creating the brand focused on the business side of sports. I started with the creation of a printed magazine; then I started organising conferences to help sports clubs spread the knowledge.
The ultimate goal of my organisation – FOOTBALL BUSINESS INSIDE – is to constitute a platform supporting the development of the football industry. Not only do we give sports clubs and federations a place to exchange information, but we also offer them a chance to get to know each other and start cooperating.
An important part of our business are partnerships with companies offering innovative solutions. Thanks to them, sports organisations can directly benefit from modern services that will improve their quality. You could say that “we make demand meet the supply”.
Matthew Lentowczyk: There’s a lot of discussion about the strategic development of the sports clubs. You, as a FUTURE OF FOOTBALL BUSINESS Conference organiser, know many decision-making people from the world of football. What’s the approach of modern sports organisations when it comes to strategic development? Do they invest in solutions that will make them be ahead of their competition?
Thomas Maurer: When it comes to the core of the sports clubs activity – their regular competition on the pitch – many footballers and coaches refer to the “game-to-game approach”. From the standpoint of scoring the points in the table, this attitude seems to be very appropriate. However, it should be banned from the clubs’ head offices.
Those who manage sports organisations should be able to see the bigger picture. Notwithstanding, it still very often constitutes a massive challenge for small- and medium-sized sports clubs to implement a long-term mentality. If I were to give them the advice, I would tell them: the better you define your milestones and plan your development, the stronger your position on the market will be.
The investment in innovative solutions is not only a method to be ahead of your competition, but also a great possibility to remain flexible and agile with the ever-changing reality. The current situation – COVID-19 pandemic – proves it very strongly. These clubs that are based on many solid foundations are capable of dealing with the crisis in Match Day revenues.
Matthew Lentowczyk: You’ve mentioned a critical point – COVID-19 breakout – which has an immense impact on many branches of the economy. In your view, what was the effect of the pandemic on the sports clubs operations?
Thomas Maurer: There are two directions that I’ve noticed so far.
The first one refers to the clubs that perceive all the changes as the opportunity to develop. They set their mindset to treat COVID-19 as a challenge rather than a threat. They see that innovative solutions need to be implemented in order to stay in the game.
The other direction touches on those sports organisations that are “frozen” because of the pandemic. They face problems figuring out what to focus on. They’re stuck in the moment and see no potential to develop because of the lack of financial resources.
It also shows that when times are good, you should dedicate part of your attention to preparing for the worst. These clubs that concentrated too heavily on developing their first squads instead of balancing their budget with the new revenue streams, now struggle with many issues.
Matthew Lentowczyk: An opportunistic approach to the business, which stands for seeking solutions rather than over-discussing problems – that’s what defines the best entrepreneurs. So, when we look at the small- and medium-sized sports clubs, what opportunities should they focus on?
Thomas Maurer: Regarding the small- and medium-sized sports clubs, it’s also a question on how you define them.
Matthew Lentowczyk: We perceive medium-sized sports clubs as those that are between 40th and 300th position in the “UEFA Club Coefficient Ranking”. Do you see it in the same way?
Thomas Maurer: There’s no one appropriate definition of small and medium-sized sports clubs, but the assumption you’ve made seems to be reasonable. Nevertheless, before the discussion, when I was thinking about a medium-sized sports brand, I considered organisations that generate less than 200 million [euros] of revenue per year.
All the biggest clubs from the less competitive leagues could also be treated as the representatives of medium-sized sports clubs. FC Red Bull Salzburg, Legia Warsaw, AFC Ajax. If we perceive them as those midsize brands, I would strongly recommend them to focus on implementing solutions that will give them the horizon of options to develop no matter how external variables fluctuate. One of such alternatives is to invest in digital transformation.
Matthew Lentowczyk: Technology is undoubtedly changing the landscape of the sports industry. When you discuss this topic with the representatives of the clubs, do you see that they understand that? Do they invest in digital products and solutions?
Thomas Maurer: Yes, indeed, they do!
Those that invest in digital transformation understand the hidden values that it brings. Evolution of the club, new revenue streams, modern communication strategy, “content explosion” – digital transformation is not only about possessing the tools but, primarily, about the change in the mentality of the organisation.
Matthew Lentowczyk: As you say, the discussion about digital transformation is actually an analysis of the ways to involve fans in the club’s everyday life. In your view, what are the best ways to enhance Fan Experience in the new technological era?
Thomas Maurer: Before you decide to use any tools to engage fans, it’s essential to define the values your sports club wants to share. You need to create your own history you want to tell to the public. That’s how you build an emotional attachment to your brand.
Another issue is to personalise your communication as much as you can. Netflix, Amazon, Spotify – they gather data about their customers and use it to approach them (almost) individually. That’s a vast hint for the sports clubs on what steps they should take next.
Matthew Lentowczyk: Staying with the fans, there’s this new trend of using Tokenization as a method to engage your supporters. You know that we recently became partners with Socios.com. [KNOW THE SCORE with Alexandre Dreyfus, Socios.com CEO&Founder here]. Do you think that the implementation of Fan Tokens is ultimately a good idea?
Thomas Maurer: It’s difficult to predict the future. Nonetheless, it’s a very interesting opportunity for fans. First of all, they can interact with the brand, which is a value, especially at times of pandemic. Secondly, they can build individual relationships with their favourite clubs. Finally, they’re also able to make decisions when it comes to the development of the organisation.
We should remember that this idea is associated both with opportunities and threats. On the one hand, democratic management of certain issues in the club, if it works properly, is a great way to involve your fans.
On the other hand, it creates the risk of putting too much decision-making in the hands of people who won’t be able to take advantage of it. The greatest challenge with the process of implementing Fan Tokens is to find the right balance of the possibilities that the club offers to the supporters.
Matthew Lentowczyk: That’s true, there’s still a need to provide education to the clubs and fans so that they use Tokens properly. One of the main challenges is to differentiate between the Utility and Security Tokens, which we recently discussed in one of our blog posts on TISA [check here]. Nevertheless, we perceive Tokenization as a great opportunity for clubs as it gives them the possibility to quickly open a new revenue stream, which is very rare nowadays.
Another trend that we see refers to sports clubs transforming into entertainment hubs or media houses. Do you think that this drive towards “sports clubs TV”, with the help of the tools such as OTT, is a proper way to attract this 99.9% of the fans that are outside the stadiums?
Thomas Maurer: For me, a transformation into an entertainment hub is the key to sports clubs’ long-term development. It seems to be the most efficient way to increase your everyday reach and share the values you have with the public. If sports clubs want to go even further, they should consider combining their video content with loyalty programs.
Once you have the right infrastructure for that – an appealing website, a functional mobile application, a creative team providing exciting content – it’s easier to make more people follow your brand. That’s the ideal path that sports organisations should strive to take.
Matthew Lentowczyk: To finish our discussion off – we’ve talked a lot about the opportunities that small- and medium-sized sports clubs have in a new technological era. Do you have any efficient examples of sports organisations that are doing well when it comes to the development and adaptation to the new challenges?
Thomas Maurer: Yes, actually there are quite a few of them.
The first club that comes to my mind is PSV Eindhoven that uses digital solutions to prepare very individualised content. They segment their communication by collecting and managing data, which allows them to take very efficient actions. This enhancement in fan profiling also leads to a better value proposition for their B2B partners.
Another example is Brentford F.C., a club that creates unusual fan engagement campaigns, in which they are turning towards the involvement of the youth. Recently, they prepared a special communication strategy to include the kids from the city who painted their favourite players.
Forest Green Rovers is a great example of a relatively small club that makes a significant impact on society. They stand for values such as sustainability or environmental protection and build their brand around them. That’s what allows Forest Green Rovers to engage people outside of their city to identify themselves with their brand.
The big clubs such as A.C. Milan or Inter Milan act like role models for the medium-sized brands such as Club Brugge KV or FC Red Bull Salzburg when it comes to the transformation into a media house.
I would also like to mention Eintracht Frankfurt here as they managed to use their local conditions for the better development of the club. Frankfurt is often referred to as the “financial heart of Germany”. Eintracht utilised it to start cooperating with financial companies based in their city, which allowed them to create new revenue streams.
By the way, if we already have the opportunity to discuss it. You, as TISA, also cooperate with many football clubs, and you certainly have lots of interesting examples of well-managed organisations. Anything on your mind right now, Matthew?
Matthew Lentowczyk: My interest is a little bit biased because of the cases we work on, but of course, I do have a couple of examples. When you were discussing the Club Brugge KV and FC Red Bull Salzburg cases with OTT, I was thinking about PAOK FC from Greece. They also proved that they understand the values coming from the implementation of your own “sports club TV”.
Recent cases that we analyse relate to the implementation of Fan Tokens. Here we have Galatasaray S.K. that is an excellent example of how you can create a new revenue stream in the short term while breeding loyalty in the long term. Another club that comes to my mind is Apollon Limassol FC that allowed fans who purchased Tokens to choose the formation and the footballers that were to play against their rival in a friendly game.
Soon you’ll also learn more about the use of Utility Tokens in the case of a relatively small club from the European perspective – Jagiellonia Białystok. They became our partners, and we will help them in creating a special offer for their supporters.
Legia Warsaw – another Polish club that can be shown as a model. Their coverage of usually unoccupied winter break, allowed them to leverage the tools like OTT, to fill in the gaps between the official games when the big broadcasters don’t invest their financial resources.
Moreover, when the pandemic broke out, they created a charity action – #ReadyToHelp, during which they financed more than 250 000 meals for the golden-agers and pensioners. Legia engaged their community in various efforts such as delivering. It created a positive effect on the image of this club. Recently, they were nominated for the “More than Football Award 2020”.
The last club that now comes to mind is SC Heerenveen. They filled their empty stadium with 15,000 teddy bears to raise money for KiKa, a child cancer research charity. They proved to be ready to quickly adjust to the new reality by preparing actions that bring immediate reactions. Thanks to their “out of the box thinking”, they created a “snowball effect”, which helped those in need.
Thomas Maurer: The SC Heerenveen case reminded me of one more thing. Recently, Club Brugge KV published a book for children where they promote tolerance among fans of different teams. Have you heard about it? The main heroes of the story are animals that are wearing scarfs of all the clubs in Belgium. The Club Brugge aim with this campaign was to teach kids that we are all united by one – our love of the sport. We have different colours, but at the end of the day, we’re all equal. It’s an inspiring story that can be used in other countries.
Matthew Lentowczyk: Great, I guess we’ve provided many substantial examples that may serve as a model for other clubs to make the best decisions. Thank you very much, it was an insightful conversation.
Thomas Maurer: Thank you for the invitation, it was a pleasure. See you soon at the “football-business” field!