WHY SKILLED BUSINESSPEOPLE LOSE THE "LOCKER ROOM"?

It's not uncommon to see otherwise successful businesspeople enter the world of football with grand ambitions, only to encounter challenges and a seemingly endless series of poor decisions. Why is it that otherwise intelligent businesspeople can end up making so many almost amateurish mistakes when they become owners of football clubs?

Over the past four years, I have worked with a number of football clubs, owners, and investors. And let me quickly say – making peculiar, irrational, and emotional decisions is not a phenomenon isolated to Denmark, although we have been "spoiled" with quite a few headlines on this account. Just to mention a few; Anton Zingarevich and Fremad Amager, Pacific Media Group and Esbjerg, Core Sport Capital and Vendsyssel, Klaus-Dieter Muller and Jammerbugt, Robert Platek and SønderjyskE, Jordan Gardner and Helsingør, and Fabian Ernst and Næstved Boldklub – to name a few cases. But believe me, this is far from the last time we will see headlines in the football industry about mismanagement of ownership. It's only just begun – we've only seen the tip of the iceberg.

In just the last 4-5 months, I have had intense dialogues and numerous meetings with clubs, owners, and investors from Norway, Sweden, Denmark, England, the USA, and Italy. And in all cases, we are dealing with intelligent businesspeople in their fields. And in most cases, also extremely pleasant and sympathetic individuals. BUT, nonetheless, almost all meetings revolve around a crisis management axis. And why is that? And is there a solution to minimize missteps?

Below, I provide examples of what I believe are some of the problems and what a solution might be. It is far from exhaustive, as it is almost impossible. One must remember that NO, as in NO, business form in the world has as many stakeholders as a professional football club. And if we add a stock exchange listing to the club, then we are dealing with the most complex managerial "engine room" imaginable. The complexity is enormous – the passion is perhaps even greater, and right in the wake of this combination is perhaps naivety…?

Here are 7 areas I regularly encounter:

1. Lack of Cultural Due Diligence:
   
   Many businesspeople underestimate the importance of understanding the unique culture that exists in the football world. Thorough cultural due diligence should be a crucial part of the transition, as it is not just about business, but also about deeply rooted passion and identity. When a new buyer of football shares begins their due diligence, it quickly ends up in spreadsheets, which is fine and very necessary. But often, the cultural due diligence is completed through a few meetings and stories. But here, a new owner is really shooting themselves in the foot. For with a deep understanding of their immediate environment, they can truly go far. Understanding macro trends in the football industry is easy, and the information is accessible. But, as seen in the example from SønderjyskE, where Robert Platek did not understand why it could be problematic to hire his daughter as a leading figure in the proud SønderjyskE football club, and his American daughter at that. And then let her live in the center of Copenhagen, occasionally appearing in SønderjyskE – and without any experience in the industry trying to lead a Jutland organization. It was obvious it would go wrong. Or when Klaus-Dieter from Jammerbugt, let young African (some even too young) football players be transported by bus to Jammerbugt in Northern Jutland, in the light of quantity, trying to make a big transfer, then they have completely misunderstood the game. And it's not because people in Jammerbugt are racists, but they are indeed local patriots, and it's nice to be able to pronounce the names of the "local" boys on the team.

These are just two of many examples of where major problems could easily have been avoided. In fact, in both cases, it was almost the first snowflake in a subsequent avalanche.

2. Lack of Understanding of Group and Team Dynamics in Elite Football:
   
   Elite football environments are complex, and businesspeople who do not understand the dynamics of a collaborating team can struggle to create a winning culture. And team dynamics in an elite football team are not the same as team dynamics in a "normal" workplace. The reasons for this are many, but one of them is that the pace of the core task, the football match, and the result of the effort can be read one-to-one in real-time. The players feel a more "painful" dependency on each other, and thus environments can arise where the law of the jungle may be the most prominent. If an owner has bought a club where this phenomenon is most prominent, it cannot be read in any spreadsheets or data points. One needs to know what to look for and listen to and what questions to ask the sports sector. And here, passion for the game absolutely helps nothing.
   
   
3. Misunderstanding Leadership Styles:
   
   Leading a football team requires a unique leadership style that differs from traditional corporate management. Decisions made in a business context are not always directly transferable to a sports arena. Navigating the psychology of players and coaches requires on one hand a very emotional approach and simultaneously the ability to be almost dictatorial. Success in football requires more than individual skill; it's about building a cohesive and collaborative team. Essentially, it's about winning more than losing! And this fact places different demands on the leadership style in a locker room than on the polished floors. Leading the squad, coaches, and the sports staff requires the owner to be familiar with and quickly navigate between different leadership styles. The sports sector, especially the players, are used to being led during short breaks in play and during halftime – and sometimes autocratic leadership is needed, only to switch to coaching leadership in the next moment, perhaps ending in a more transformational leadership style. All within record time.
   
   
4. Underestimation of Strategy in Football Business:
   
   Football clubs, or perhaps better termed football businesses, have a multitude of stakeholders, from fans to players, sponsors, local communities, international communities, shareholders, employees, suppliers, and many more. Businesspeople who underestimate the complexity of these relationships can face challenges balancing commercial interests with the social responsibility that a football club often carries. In all clubs, big and small, discussions about playing style, systems, and everything else under the sun related to the game on the pitch happen daily. But the long-term strategy for the club, of which playing style is "only" a part, is discussed and communicated far less.
   
   
5. Getting Caught in Wins and Losses:
   
   Football is an emotional sport, and businesspeople who fail to separate emotions from decision-making can be sucked into a cycle of euphoria and disappointment. This can lead to impulsive actions and a lack of long-term strategy.
   
   
6. Lack of Exit Plan and Short-Term Thinking:
   
   Owning a football club requires a long-term vision and a clear exit plan. Businesspeople who act short-term without a clear strategy for the future risk facing challenges when the situation changes – and it will! Having an exit plan doesn't necessarily mean making an exit, but it MUST be part of the strategy. Assigning an exit plan to your investment is entirely normal, but I rarely experience owners and shareholders in football clubs having considered these thoughts. One of my key points in this is that as an owner or shareholder, you must be aware that the club will, in all likelihood, continue long after you have left. There are several clubs in Denmark that are over a hundred years old, and they will continue to operate in some format for many, many years to come. Therefore, it is of utmost importance to understand as an owner or shareholder that you "only" have the club and shares on loan, and they should be treated accordingly. You must be prepared to navigate with the short-term view for daily operations but also have set a goal and exit with the long-term view in mind.
   
   
7. Unrealistic Expectations for Short-Term Success:
   
   Running a football business is the ultimate "marathon." If you try to sprint through daily operations, you will run out of resources quite quickly, both in terms of personal energy and financial means. Having unrealistic expectations of quick success and overlooking the need for patience and sustained effort will simply stand in the way of success. Football club owners who do not invest time and resources over time will face challenges achieving sustainable growth.

But, what should you do as an owner/shareholder?

As described above, owning and operating a football club is a complex task. There are 1,000 holes to fall into, and dead ends and labyrinths to be lured into. Below are a few areas to start focusing on. As previously mentioned, the operation and ownership of a football club is extremely complex, so this is not exhaustive – but essential points of focus.

Focus on the Value of Your Investment:

As with all other investments, the overarching focus for an owner/shareholder should be the value of their shares! As an owner/shareholder, you should be 100% focused on what you can contribute to make your investment more valuable. If you are an expert in commercial matters, then focus on that. If you are an expert in finance, then focus on that, if you are an expert in communication, then focus on that – you get the point! It is, of course, quite tempting to get involved in other areas of the "football factory" than just your area of expertise. But unless you are an expert in the game, stay off the pitch. Consider it as an investment in a production company, for that's what football clubs really are. You need to understand the "factory" as a whole but stay on the floor where you contribute the most value to your investment.

Focus on Recruitment:

Finding the right right-back, goalkeeper, or solid midfielder can be a very difficult task. It's not enough that the player just knows his craft; he must also fit into the team, find his place and acceptance of the culture, and at the same time have development potential. The same applies to all other positions in the club – in the sports sector and in the sales and administrative part of the club. Therefore, it is of great value for owners to spend time and gain insight into exactly this part of the work in the club. You don't need to be an expert in the individual fields, but making yourself an expert in asking the right questions in the recruitment phase is crucial. And that again leads back to having a clear playing style system and business strategy as the foundation.

Focus on Communication:

What story do you want to tell? About yourself as an owner, about the club, about your goals and ideas, about the strategy and playing style, and not least how you will achieve milestones. It is tempting for an owner, especially a new owner, to grab any microphone they have the opportunity to speak into. But you must be 100% clear about what you say, to whom, and why. The very emotional communication after a fantastic victory must be followed up when things go badly, the team loses, the share price is falling, or the star player is injured and out for nine months – and it will happen! A razor-sharp communication plan and internal guidelines must be an important part of the overall strategy.

Focus on a Clear Exit Plan:

It may seem like a strange approach to your new acquisition to be super focused on having a clear exit plan. But it should be seen in light of what it does to internal behavior and processes. You can compare it to having your house for sale. The little things you didn't notice before, or at least didn't do anything about, are now looked at, fixed, changed, cleaned, etc. When I correlate the exit plan with internal behavior and process optimization, it's because you can use your exit plan to stay on track. The decision I make now, does it bring me closer to a solid exit, or further away? This should also be seen in light of the fact that an owner should focus on optimizing the value of their investment. The more owners there are in the circle (unlisted clubs), the more important it is to have an open dialogue and decision about the exit strategy.

Conclusion:

Ultimately, success as a football club owner and shareholder requires more than just business intelligence; it requires an in-depth understanding of the unique dynamics of the football world and the ability to balance passion with business acumen. It is a journey that requires dedication, insight, and a continuous commitment to learn and adapt. It demands surgical precision in the choice of leadership style and communication, and it requires honest reflections on why you are making the investment, and not least how you plan to exit.