The Times - Ron Gourlay determined to preach financial reality as new Chelsea era dawns
Matt Hughes, Deputy Football Correspondent Imagining a world in which Chelsea are no longer brash and flash takes a considerable leap, like picturing estate agents without shiny suits or MPs deprived of their expense accounts. Yet that is the vision of Ron Gourlay.
The new chief executive is determined to make his mark by smoothing the club’s rough edges and re-engaging with supporters, although many of them will not be too enamoured with the first decision taken on his watch, to sell the naming rights to Stamford Bridge.
Gourlay talks a good game over dinner in a Madrid restaurant filled with photographs of the new galácticos — one of Lassana Diarra, as good as given away by Chelsea when he went to Arsenal for £2 million, is the source of some embarrassment — but it would be unwise to regard him as a soft touch.
The Scot speaks earnestly about Chelsea’s hopes of winning two Champions League titles in five years and the club’s willingness to compete with the seemingly endless riches of Manchester City in the transfer market. But it is his obvious desire to distance himself from his predecessor that first causes the ears to prick up.
Peter Kenyon, the outgoing chief executive, has played an important role in Gourlay’s career, taking him from Umbro to Manchester United and on to Chelsea, but Gourlay is determined to draw a line under his reign.
The down-to-earth Dundee fan will not be drawn on specifics, but concedes that mistakes were made and a change of tone is required, even if the club’s ambitions remain the same.
“You get what you see with me,” Gourlay said. “Brashness? Everybody has a different style. People always say to me, ‘You worked with Peter Kenyon for a long time,’ but we’re two completely different personalities and I do things differently.
“Hopefully if there was brashness there then, maybe you won’t see as much brashness going forward. You’ll still see as much energy, you’ll probably see more will to win, with realistic goals. We’ve learnt a lot in the last five years.”
Kenyon was also involved in smoothing the path for Gourlay’s succession and is still involved at the club as a non-executive director, but in some respects he has given him a hospital pass.
Behind all the bold talk it has also fallen to Gourlay to pass on some bad news, most notably that the much- heralded goal of self-sufficiency integral to Kenyon’s original five-year plan will not materialise as planned next year.
Given that Chelsea lost £65.7 million in the most recent financial year, such a failure hardly comes as a shock, but it is the first time anyone at the club has acknowledged it. Although he does not say so directly, it is understood that Gourlay is working to a revised timetable, with Chelsea aiming to break even by 2013.
“I like to operate honestly, but realistically,” Gourlay said. “Selfsufficiency is still the goal of the football club. Is it going to happen this year? No. It won’t happen soon.
“It’s still the goal to get there, but certain things have happened along the way. It would be nice to go to the owner and say we don’t need any more cash, but that’s not where we are today.”
Chelsea’s biggest problem is their huge operating costs, with a wage bill of £150 million exacerbated by a series of compensation payments to sacked managers and coaches totalling £23.1 million in their most recent set of accounts.
In terms of generating revenue, the club are performing well, with group turnover up by almost 100 per cent over the past five years, but they are stymied by the size of the stadium — hence the controversial decision to sell naming rights to Stamford Bridge.
Many fans will be up in arms, particularly given the wealth of Roman Abramovich, the owner, but they cannot have it both ways. Chelsea can aspire to develop into a mature, self-sufficient club or remain as a wealthy Russian’s plaything, and if it is to be the former, tough decisions will have to be made.
The alternative of moving to a larger stadium, which would have to be outside the Borough of Hammersmith and Fulham, would be even more unpalatable. A redevelopment of Stamford Bridge is not an option because of planning restrictions and the cost of a limited expansion would render it pointless.
“The difficulty the club’s got is that we’re competing against Manchester United and other clubs who operate from larger stadiums than ourselves,” Gourlay said.
“There are three revenue channels: broadcasting, where we compare well with our competitors; commercial, which is sponsorship, where if you look at the last figures posted Manchester United were about £66 million, we were £61 million and I think Liverpool were about £54 million. The biggest challenge is match-day revenue and we’re limited with a capacity of 41,800.
“It’s very important that if there was ever a move for the club, it would have to be in a close location and that’s never really opened up. I’d prefer to stay at Stamford Bridge, although we could fill a 55,000 or 60,000-seater stadium on a regular basis.
“But it’s quite a lot of work to take the Bridge up to 50,000 and you’d end up with a stadium that’s unbalanced because there are some sides where we can do no work on.
“We had a ten-year plan, we’ve just finished the first five and the plan for the next five is very much working with a stadium of 42,000. As we stand today, we’re staying at the Bridge.”
For all these problems, Gourlay remains bullish about Chelsea’s prospects, particularly regarding their ability to compete in the transfer market for the best players demanding the highest wages.
The 46-year-old has no plans to reduce a wage bill standing at 70 per cent of turnover, but appears relaxed about the situation, as was shown by the club’s willingness to give a huge pay rise to John Terry to keep the captain out of the hands of City, whom Gourlay believes will find competing with the elite more difficult than they imagine.
“It’s no secret about our wage bill and that isn’t going to go away,” he said. “We’re setting ourselves goals that will see the percentage of wages of our turnover remain static. That is still one hell of a lot of money to play with.
“Are Manchester City a threat? With the players they have, they’re certainly going to try and push their way into the top five. But commercially it’s not that easy.
“They’re very much a Manchester-centric club. To break into the ‘big world’ and start developing your business in Asia and in the US, you need to really start winning some trophies and not just one Premier League.”
The man in charge
• Ron Gourlay, the new Chelsea chief executive, was a regular spectator at Dens Park, the home of Dundee, as a child, having been taken there by his father. However, the 46-year-old is reported to have told a Chelsea fans’ forum that he is a Rangers supporter.
• He had trials with various clubs in the Tayside area, but nothing came of them.
• Gourlay spent six years working for a glazing company in Dundee, four of them as an apprentice. He had previously made a habit of calling into shops to sell snacks to workers.
• Having demonstrated his eye for business, he moved to Umbro, the sports clothes and equipment manufacturer, in his early twenties. He spent time there as business development director and also as sales and marketing director.
• The Scot’s 15 years’ work at Umbro persuaded Manchester United to acquire his expertise in 2000. He was appointed commercial director at Old Trafford, operating alongside Peter Kenyon, with whom he had worked at Umbro. Kenyon left for Chelsea midway through Gourlay’s five-year stint with United.
• Gourlay joined up with Kenyon for the third time in 2005, when he moved to Stamford Bridge. He has filled a variety of roles at Chelsea: managing director (merchandising), commercial and venue director and, until recently, chief operating officer. It was announced in September that he would replace the departing Kenyon as chief executive.
Words by Matt Hughes
Spot the difference
Peter Kenyon, the previous Chelsea chief executive, had big ambitions for the club and was not scared of articulating them. So how does Ron Gourlay match up in the talking stakes?
“Over the next five years our plans are simple. To turn the world blue.”
Kenyon, 2005 “Over the next five years we’ve still got to shoot for the stars. I’d still like to think we can win the Champions League twice in the next five years. That might sound aggressive, but I do think we can still do it.”
Gourlay “The winner of the title will come from a small group of one.”
Kenyon, 2005 “We go in every season to win trophies. We will all feel the pressure if we don’t win any trophies. Not only will there be pressure on Carlo [Ancelotti], there will be pressure on me.”
Gourlay “We did set ourselves an objective to be break even by 2010 and we’re confident.”
Kenyon, 2006 “I like to operate honestly, but realistically. Self-sufficiency is still the goal of the football club. That’s what we’re trying to attain. Is it going to happen this year? No. It won’t happen soon.”
Gourlay “Other teams in England should be knocking on our door — teams like Tottenham, Newcastle, Aston Villa, Everton. It’s more about them getting their houses in order, rather than us coming down to their level.”
Kenyon, 2008
“Are Manchester City a threat? With the players they have, they're certainly going to try and push their way into the top five. But commercially it’s not that easy. They’re very much a Manchester-centric club.”
Gourlay
www.timesonline.co.uk/tol/sport/football/premier_league/chelsea/article6905573.ece
