Angus Kinnear is doing things The Arsenal Way

Arsenal Football Club has undergone something of an international revolution in recent years, both on and off the field. The club has been a pioneer in the recruitment of foreign players and is now turning increasingly to foreign soil in its recruitment at executive level. One man who has been at the centre of it all in recent years is Arsenal’s UK head of marketing, Angus Kinnear.

January heralded the dawn of a new era at Arsenal Football Club. The English Premier League soccer side appointed Ivan Gazidis, then deputy commissioner of Major League Soccer in the USA, as its new chief executive. The first eight months of Gazidis’ tenure were decidedly low-key. He watched and learned, assisted manager Arsene Wenger in the transfer market, and went quietly about his business in the background. In the last weeks, however, Gazidis has made his move, spelling out a new global vision for the club and making three key appointments: Svenja Geissmar, a former General Counsel at MTV Europe who becomes the club’s first in-house lawyer; the appropriately named Trevor Saving, who comes in as head of people and operations; and, most crucially of all, former NBA, Gatorade and Nike executive Tom Fox, whom Gazidis has brought in as chief commercial officer.

The Arsenal board it seems, though renowned as being one of the most ‘traditional’ in English soccer, is increasingly turning its attention to the arguably more sophisticated world of sports marketing in America. Indeed, the club has undergone something of an American revolution in recent months. There is Gazidis of course – although the former MLS man was born in South Africa and educated in Britain – Fox, and Stan Kroenke, the owner of several American major league franchises and now the majority shareholder at Arsenal.

One man in the thick of the revolution is Arsenal’s UK head of marketing Angus Kinnear. A sports marketing veteran despite his youthful appearance, Kinnear spent some time in the US himself, working as a freelance brand consultant. Having also spent two and a half years at Coca-Cola and four years at Proctor & Gamble, Kinnear arrived at Arsenal in 2004. Speaking just weeks before the Emirates Cup, the airline’s showpiece soccer tournament at Arsenal’s stadium, Kinnear has nothing but praise for Gazidis’ appointment.

“From a personal perspective,” says Kinnear, “I think the board were very judicious in making sure that they appointed somebody who had an absolute understanding of the values of the brand and I think all the fans’ groups would testify that Ivan has demonstrated that straight away.”

Indeed, the Arsenal brand is one of the most valuable in world soccer. Valued by this magazine as the 21st most valuable sports property in the world, the club is rooted in a sense of priceless tradition. As Kinnear explains: “It is sort of known as the Bank of England club. What is very true about our board is that they are great guardians of the Arsenal brand. Previously I used to work at Coke and P&G, so obviously around branding, but the way they define the brand here is ‘the Arsenal way’. And it gets referred to things all the time. So if, for example, we’re dealing with a particular supporter who’s got a grievance, someone will say ‘well, that’s not the Arsenal way’. There’s a great sense of that throughout the club – of doing the right thing. The phrases linked to it are ‘quiet dignity’ and ‘assured judgement’. And everybody likes the fact that that differentiates ourselves from what would be seen as our competition."

Gazidis, it seems, has been quietly entwining himself in ‘the Arsenal way’. Yet, as much as the spirit of the club provides the marketing men with a useful brand to sell, Gazidis has recently expressed his concern that not enough has been done in the past to spread the club’s message internationally. Speaking with popular Arsenal fan site Arseblog.com earlier in the summer, Gazidis said: “I do believe that if we’re looking to develop our value we have to embark on a medium to long-term project of better articulating the values that the club represents. I don't think we have developed our brand as much as we could do, either domestically or internationally. And ultimately, if you do that effectively, the revenues come off the back of that.

“I do believe that Arsenal represents some things that are quite special, particularly in the modern world of football. We need to preserve those whilst articulating them to a wider public.”

Very much on message with his new chief executive, Kinnear echoes Gazidis’ sentiments. “Despite the fact that Arsenal has some very deep-seated traditions and values,” he says, “It’s actually pretty entrepreneurial and we do talk about the club as being ‘tradition with vision’. So it’s about not forgetting our roots. What Ivan has started to do is to set the agenda about what the brand means internationally and how we can grow it, and to think about things rather than in terms of how do you immediately monetise it. It’s more about how do we make connections with people, what does the Arsenal brand stand for?”

There is of course an inherent problem associated with developing the Arsenal brand internationally: unlike their Premier League rivals – Manchester United, Chelsea and Liverpool in particular – Arsenal are reluctant to undertake money-spinning but fatiguing tours to far-flung corners of the world; manager Arsene Wenger preferring yearly low-key pre-season trips to Austria to better prepare his players. “Arsene is focused on the football primarily,” Kinnear explains. “So the club supports his requirement and therefore the team isn’t traipsed around Asia on money-making schemes.”

He continues: “This season we negotiated [pre-season] fixtures in Hanover and Valencia – two away games which are revenue generating, where teams are paying a fee to have Arsenal. The figures for those games are dwarfed by figures if we were to be able to travel to South Africa, the Far East, the United States. What’s more challenging is the brand extension opportunities and the brand expansion, which is about activating that presence and activating it through membership and supporters’ clubs and retail and fan acquisition. And that’s the challenge we face at the moment: how do we grow the brand internationally, knowing that the team is unlikely to have any presence there? And that is a challenge versus Man United and Chelsea.”
The controversial ‘39th game’ idea put forward by Premier League chief Richard Scudamore last year, was designed to give opportunities to every Premier League team to enhance its visibility in foreign territories. The scheme attracted much criticism when it came to light last October, but Kinnear is cautiously positive about the idea. “Our board was initially very supportive of it,” he says, “and that’s on public record, but I don’t think the announcement of it was handled particularly well and sort of killed it before it got proper airing or proper debate. What I would say is, clearly, a team’s presence in a territory makes a fundamental difference to how you can develop supporter and sponsor relationships in that country. And whether that comes from a friendly or competitive match is less important. But I think that’s the key and it’s not a phenomenon unique to the Premier League: that is what the NFL have seen, the NBA have seen, and I think everybody’s recognising that you’re imposing a limit on your growth unless your team has some level of presence.”

As director of UK marketing, Kinnear is something of a factotum at the club. His remit is incredibly wide-ranging. As he explains: “The thing I love about this job is the diversity of football as a business – I will go from one meeting talking about how we are going to recruit six year olds as Arsenal fans to another meeting about how we’re going to leverage the naming rights with Emirates further, which is a multi-million pound deal, to selling more UK£150,000 boxes, to what’s our concert strategy going to be next year and what acts can we secure [Arsenal have a licence to put on three concerts per year at Emirates stadium].

"So the breadth of revenue streams and of brand building itself… because our audience is so diverse, you know, there’s a corporate Arsenal brand, there’s an Arsenal brand for Junior Gunners [Arsenal’s youth supporter club], there’s a membership brand, there’s a brand for Highbury Square [the site of Arsenal’s previous stadium upon which the club has built and is selling luxury flats], and so we’re managing a portfolio of diverse offerings to different target audiences. Culturally, the really big advantage here, and I think it’s what Arsenal excels at, is that we make decisions fantastically quickly. It’s a really flat organisation and there’s no politics. The board give people a lot of autonomy.”

One area that Kinnear has been focussing on in recent months is the Emirates Cup. The pre-season tournament at Arsenal’s home ground has now been held for three successive years and has become an opportunity for Arsenal to close the pre-season revenue gap on their touring rivals. The two-day tournament, which is always a near sell out, makes some US$6 million for the club, while providing the team with varied, first-class opposition. Kinnear has been working closely with specialist soccer marketing agency Kentaro to ensure the success of the tournament, and explains that the concept came about as a method of monetising pre-season but has now proved so successful that it is being emulated, to varying success, across the world. “Arsenal’s got a great reputation for being operationally fairly slick,” Kinnear explains.

“So when these teams come over, from the moment they arrive they are greeted by an Arsenal representative, they’re looked after in hotels, they’re escorted to the press conference, our media people are dealing with them, their directors are looked after in fantastic facilities, their corporate guests are looked after and that has been one of the competitive advantages of why teams want to come – Real Madrid were desperate to come back this year but it didn’t work in their schedule. In terms of tournament for them, they love London, they love the stadium and they love the quality of football that’s played.”

From Kinnear’s point of view, one of the key benefits of the Emirates Cup is the opportunity it provides him and his team to build relationships with potential new partners. The tournament falls outside the contracts of Arsenal’s regular season sponsors. “In terms of developing the Arsenal business, it’s a good way to introduce brands and potential partners to the business in what is a relatively low-cost format rather than them signing a multi-year deal.” This year’s Emirates Cup was backed by the likes of online gaming company Bet-at-Home and Thomson travel agency. Moving forward, those opportunities to develop new relationships may prove crucial.

Arsenal's two major sponsorship deals, with Nike and Emirates airline, were both signed some time ago and only bring in about US$33 million a year. As a point of comparison, title winners Manchester United generated some US$60.8 million last year from their two key deals with Nike and AIG. Asked recently about the comparative lack of revenue that the club’s two standout deals yield, Gazidis’ response was telling: “I think there’s no question that the partnerships with Nike and Emirates were fundamental for the construction of the stadium and those are strong, long-term relationships. It's always easy to second guess deals but they give us, as a club, stability and effectively a guaranteed return.”

The UK£100 million, 15-year deal that Emirates signed with the club in 2004 is increasingly looking like good business for the airline – especially given the success of Arsenal’s move to the new Emirates stadium.

Since joining the club in 2004, much of Kinnear’s considerable energy has been spent on the process of relocating from the club’s old stadium, Highbury, down the road to the Emirates. The UK£430 million project saw the club transform an industrial estate just yards away from the 38,000-capacity stadium it had called home since 1913. The project included the relocation of the multifarious businesses housed at the new site, the construction of the stadium itself, and the redevelopment of Highbury into a complex of luxury flats.

Off the field, the recession hit Arsenal at a critical point in the stadium project. The club had expected to recoup some UK£350 million; UK£270 million from the sale of the luxury flats at the Highbury redevelopment site and a further UK£80 million from the regeneration of nearby Queensland Road. Although the club is now saddled with a debt of some UK£400 million, largely made up of mortgage repayments for the stadium, the Emirates provided an immediate financial boost.
The 9,000 premium seats in the middle tier of the three-tiered stadium, Kinnear explains, now generate the same amount of revenue as did all 38,000 seats at Highbury put together. Matchday revenues “were UK£30 million at Highbury,” says Kinnear. “They’re UK£90 million here.”

He adds: “The 51,000 seats we have on top of those 9,000 are just a bonus. Similarly, at Highbury, we had a shop which we almost had to close on busy match days because it couldn’t handle the demand. We’ve now got a store which is like a small Tesco store. There’s another one on the other side, at Finsbury Park [an area just north of Arsenal], and that can really handle the volume. Same with non-match day activities: Highbury wasn’t suited for non-match day activities. Here, every single day there are two or three conferences going on every day in our large conferencing suites. Conferencing and banqueting is a big business here.”

The figures are already impressive – Arsenal made UK£20 million more than their London rivals Chelsea in matchday revenues in 2008, and just UK£7 million less than league champions Manchester United. Thanks to the new stadium, the club takes annual revenues of over UK£200 million with 45 per cent of those attributable to matchday takings at the new 60,355-seater stadium. “The focus was firmly on delivering for us,” Kinnear recounts proudly, “and it was delivered on time and on budget and the beautiful thing about the stadium is that there was no element of architectural folly or ego in it. Everything was about delivering revenue. So there was no spectacular arch or box kitchens with Welsh slate tile on the floor and that kind of stuff. It was all about monetisation.”

What impressed the most, however, was the speed and efficiency with which the project was undertaken. Planning permission was sought in November 2000 and granted by May 2002; a UK£100 million sponsorship package with Emirates was in place by the beginning of October 2004; and the stadium was officially open for business on 22nd July 2006. It put the shambolic seven-year project that was the UK£800 million construction of England’s national stadium, the 90,000-seater Wembley, to shame.

The Emirates stadium project was a triumph, Kinnear posits, because of the proactive nature of the Arsenal board. “The success of the build and the commercialisation of the stadium was done on the fact that there were effectively five people all sitting next to each other who could make decisions almost instantaneously,” Kinnear says. “I think other stadia projects have struggled because they’ve been bogged down in politics and different interest groups.”

Arsenal have settled in the new stadium now, although Kinnear reveals that the club is working with supporter groups on issues like naming different sections of the ground to better accommodate fans. The challenge going forward, at every level of the club, is very much an international one.

Of primary concern for the team itself is competing in the Champions League, which is worth some UK£20 million a year to the club. Having qualified for Europe’s premier club competition for eleven successive years, the club has come to rely on the financial support that competition has to offer. Kinnear insists, however, that the club does not take it for granted and contingency plans are in place should the team slip out of the top four positions in the Premier League that offer Champions League soccer. In an echo of ‘the Arsenal way’ mantra that permeates all levels of the club, Kinnear says, “What you’d expect from Arsenal is prudent accounting, so budgets are prepared so that if we weren’t to qualify there is a level of insulation so that it’s not the end of the world. But, clearly, if you don’t qualify for two or three seasons the impact is, you know, a little harder.”

Kinnear is embarking on what promises to be an exciting time for Arsenal as a business, and he is in no doubt as to where his energies will lie in the near future. “Focus for the marketing and commercial team is on owning a relationship with the fans,” he says. “So we’ve invested a lot of time in trying to perfect our fan communication. Football clubs are at a distinct advantage because they should know everybody who interacts with them. So Tesco or Coke just don’t have an idea about who’s buying their product; we have the records of everyone who’s interacting with us and we’ve invested a lot of time in trying to create a best-in-class CRM system, which is really the foundation of all our communication with the fans.

"Increasingly, and this is the way the job is changing, it’s about international development. Arsenal, depending on the survey you read, has 40 million supporters worldwide and at the moment, if you strip TV out of that, 90 per cent of our revenue comes from 10 per cent of those people, or even less. And I think that’s one of the things where people talk about the size of their supporter base, and often that is about taking that relationship from being just about an awareness of the brand to actually being a more involved relationship where there’s a level of affinity there.”

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