The Big Interview – David Paton

David Paton, Managing Director of Kinross Sports Advisory, speaks to sportindustry.biz about the on-going transfer window, the impact of UEFA’s Financial Fair Play, and the secrets to success in German football…

The transfer window is a very busy time for you, could you tell us a bit more about your involvement?

One of the reasons I founded Kinross Sports Advisory was that there are a lot of sports, football in particular, that have yet to become a true business in every sense of the word. 

One area that is still a massive issue in football are the agents, their fees and the subject of dual representation. You see a lot of moves forced on players by agents. Kinross Sports Advisory and our Player Due Diligence service gives a bit more power back to the clubs that are purchasing the player, to give them some collateral to say to both the selling club and also to the agent negotiating the terms of agreement, actually that player isn’t quite as good as you think and we suggest a truer value of the player.

Partnered with Scout Seven and Opta, there are three key areas within the Player Due Diligence. The first area covers the stats around a player; it could be that a club is looking for a left back with 90% tackle success rate and 80% pass completion rate, they will then identify three or four players in the transfer window that they think match that criteria. The clubs can’t analyse the stats as well as Opta can because they are their stats and their data and can manipulate them so much better. We can then say to the club, on data alone, two of those four players are don’t meet your recommendations.

Secondly, we use our contacts around the world to get character references on a player just like you would for a normal job – how do they interact with their teammates? How do they react to authority? Are there any issues with drinks, drugs, gambling, extra-marital or anything that might cause an issue? One of the issues we find is that the mother often decides where the player goes. So we can advise the buying club if there is no point talking to the player yet, make sure you have their mother on side.

The third area is social media which we filter down to a detailed level, that allows us to see where the followers are by region and then advise the club where to use that player’s image to generate greater sales. 

We do a simple red, amber, green report. Green means there is no issue with the player, proceed to sign. Amber means that on the whole he seems alright but you might want to check one or two issues and red obviously means that there is a significant issue that needs to be dealt with and resolved before you consider signing.

The bigger clubs, the ones that are more proactive in the transfer window, are the ones that have really taken to this service, because they are planning the January transfer window in September/October and so they are using this process the most. Then you look at Major League Soccer where I feel there is an opportunity with all the designated players they bring in because that’s a bit more strategic as well. The service predominantly works if you are buying a player from say South America, Africa or Eastern Europe –  that’s where we come into our own and really provide that ammunition for clubs to use.

Have you noticed a change in the last few years on the reliance on stats?

There are certain clubs at the top end that are really bulking up their analytics teams, they probably don’t get the full value out of the stats that they are looking at as they could but it’s better than it was. But there are other clubs that claim to be progressive and moving forward and they are still in the dark ages, so there is a mixed bag.

Do you think that is down to there being more American owners in the League?

I think that absolutely has an impact, you see that across all areas of the business, particularly the commercial side and the partnerships, the American influence is huge.

What is the ripple effect of a big transfer offer like Real Madrid’s reported attempts to sign Gareth Bale?

£85 million is an awful lot of money and you have to question whether they would get a return on their investment, even with the Champions League, shirt sales, you have to wonder if they will get their money back.

In places like Barcelona and Madrid the presidents are voted in, so there is an element of crowd pleasing, and not necessarily thinking in a business-like way with a financial head on, it’s thinking of how they can get re-elected. You can see it with PSG and Napoli. PSG buy Cavani for over £50 million, Higuain has now gone to Napoli. Arsenal’s bid for about £25 million was a substantial and realistic bid, and now Napoli have paid over the odds. That’s only happened because Napoli suddenly had money, a bit like Carroll to Liverpool. Suddenly that club is perceived to have this extra money and so it unnaturally inflates the market.

Has Financial Fair Play worked?

I think there are certain clubs that believe that Platini and UEFA won’t enforce it. I think they may come a cropper pretty quickly. From what I know in the background, those clubs are going to come in for a bit of a shock. Platini has to be seen to enforce it or he is going to look weak as the president, however he has got to balance that with the commercial deals. The one thing I would like to have seen this summer in the UK is clubs investing in infrastructure and paying off debt rather than just buying players who may only have a three year impact. Financial Fair Play is something a lot of clubs aren’t particularly bothered about.

The German clubs seem to be getting it right, both on the field with Champions League success, and financially. What does it come down to?

Their success is down to youth investment and academy structure. They have low ticket prices and most of them fill the stadiums, and they have good commercial deals. The clubs are run in the correct manner and they still have that community sense. English clubs’ prices are too high, and they don’t reflect the current economic environment. There are ways of making money back other than just ticket sales, if they get their CRM models correct and look into expanding into other regions, they can replace the slight loss in ticket sales. If you drop your ticket sales by £5 of £10 per ticket but then fill the stadium as a result you could get the same revenue, plus the additional revenue of food and beverages on match day and programmes etc.

There are a lot of things football clubs in this country could do better by applying different principles from across the different industries and sectors that they are just not interested in doing at the moment and that’s where there are a lot of gains to be made.

Could you talk us through your emerging athlete representation service?

There is a problem in football with the power of the agent. When you have players aged 15-17 coming through the ranks agents are picking them up, telling their parents they will look after them and their parents believing them. 

Within Kinross we have an emerging athlete representation service, where we engage with the governing bodies, whether it’s the FA or the ECB for example, and we will represent the player up to the age of 18. We are paid a set amount by the governing body so every deal we do through the player is transparent and we have no vested interest in the deal. That means we can advise in an impartial and independent way to the player or the athlete. 

It works well for those playing at U16 or U17 level. You can see potential and that they are going to come through, but it also protects the player. At the age of 18 they have the choice, they can stay with us and we can manage them rather than be their agent.