COVER STORY: Mark Arthur
Away from the debts, boardroom upheaval and managerial changes Nottingham Forest chief executive Mark Arthur speaks to Jim Pendrill in a rare interview read on....
It goes without saying that interviewing the chief executive of a football club is never going to be a straightforward affair. It's the kind of job that should carry a health warning. Running the club is almost the easy bit. Opening yourself up to constant abuse from fans and handling all the pressures of the media circus that surrounds you isn't.
The day I meet Arthur is typical. The chief executive of Nottingham Forest greets me in a windowless whitewashed room in the bowels of the main stand by immediately apologising for the fact that he is "in the middle of a deal".
Indeed, we have barely begun to chat when the mobile, which has remained clenched in his hand, goes off. It's the manager. "Excuse me for a minute," comes the inevitable reply.
About 15 minutes later Arthur returns, a beaming smile across his face. The deal is clearly almost done, although our interview will be cut off again in 40 minutes when Arthur strides off to finalise things in person with the skipper.
On the day itself I was sworn to secrecy about what was going on, but can now happily report that Arthur was in the process of spending just shy of a million for Marlon King from Gillingham.
Arthur was clearly in his element and seemed at ease doing the deal. The press were outside in the car park sniffing for news, but Arthur kept them waiting. I kept thinking, it must be like this all the time, but this guy knows how to handle the pressure.
I was rather surprised to hear him later reveal that it had been a very different story when he first transferred to the helm of Forest four years ago from the far more tranquil and profitable surrounds of Trent Bridge. As chief executive of Nottinghamshire Cricket Club Arthur was instrumental during his six years in charge in pushing through schemes such as the £37.2m Radcliffe Road Stand development and negotiating the deal that brought Pakistani paceman Shoaib Akhtar to Nottingham.
"For the first two years at Forest I had serious reservations. I kept asking myself why I had left the relatively safe world of cricket where I could always balance the books for all of this."
I'm glad Arthur has brought up the small matter of finances, or rather the lack of them. Most accountants would argue that spending a million pounds on a player is the very last thing that Arthur should be doing right now.
As of today Forest are nearly £320m in debt, and every day they spend in Division One they are losing money.
But for the time being at least they are losses which club chairman Nigel Doughty, on whose continued support the club relies for day-to-day funding, appears happy to take on. After taking up the chairmanship 18 months ago Doughty now owns 85 per cent of the club (5,500 private shareholders own the rest) and he has now spent some £319m over the last four years on what Arthur admits is "his hobby".
Arthur adds: "The simple choice we face is whether to sell a player or whether Nigel makes up the difference through whatever means. We are very fortunate, and sometimes supporters tend to forget this, that Nigel has committed the funds he has to this club."
Revealingly, Arthur stresses that Doughty has so far committed £319m, implying there is clearly more to come to get Forest back into the promised land of the Premiership. That said, Arthur also stresses that such a situation cannot go on forever whereby the club lurches from one favour from Doughty to the next.
In a stroke of understatement Arthur adds: "The long term aim of the club is to operate without Nigel's support. We do encourage him not to throw money at the situation."
That situation was of course dealt a severe blow following the collapse of ITV Digital, a deal which was worth the lion's share of the £34.7m income that the club received from media sources in their last reported accounts.
Although there are mutterings that the Football League has not given up the battle to reclaim some of the lost shortfall of £3178.5m, Arthur says he has drawn a line under the debacle. "Put it this way, we are not banking on getting anything back," he adds.
The damage that the loss of the TV revenue has done is well documented, adding of course to the perilous financial state of so many Nationwide clubs, not least Forest's neighbour, County (see below).
Until now many of those clubs have escaped freefall by going into administration, an issue on which Arthur has previously made one of his rare forays into the public eye and been strongly critical.
Without Arthur naming names, the classic example is of course that of Leicester City, which went into administration and had 90 per cent of their debts to the Inland Revenue wiped out - yet still secured promotion.
But today Arthur believes we are on the threshold of something more serious for clubs, and strongly believes that clubs will go out of business.
He won't name names but admits that what we are seeing at the moment is "only the tip of the iceberg".
"Next time problems hit clubs I do not think creditors will be so happy in getting clubs out of administration. It's a matter of time before one creditor simply says enough is enough."
Such problems aren't just confined to Nationwide clubs. On the day we meet the front pages are full of Leeds United and their battle to stave off administration.
It remains to be seen whether a big name will ever fall, but, for the time being at least, back at the City Ground the club clearly have Doughty to thank for everything. But to take things forward with less reliance on the chairman's deep pockets, Arthur stresses that the club's relationship with the city council, which owns the land on which the ground is built, remains crucial on two fronts.
Firstly, the club wants the authority to underwrite a new 20-year bond so that it can refinance its £320m debt. Secondly, the club is trying to negotiate with the council a 250-year lease which will increase the capacity of the ground to 40,000 by rebuilding the main stand.
As things stand the club is naturally unwilling to spend money on the stadium - which has a capacity of just over 30,000 - without guarantees over its future.
Arthur says discussions over the lease, which have been continuing over the past 12 months, are reaching a conclusion (he hoped to have completed the deal by the time this interview was published).
"We needed the talks to be concluded by the end of the year. There is still quite a way to go but there is a willingness on both sides to make a deal happen. Our intention has always been to stay here and redevelop the ground."
Two of Forest's three leases which cover the ground expire in 2013. They would all be rolled into one, with a new level of rent being set. The aim is that if and when a deal is struck the club could then team up with the authority to develop land alongside the River Trent and the Grantham Canal at the back of the Brian Clough Stand.
Forest's share of the proceeds could then be ploughed into replacing the main stand, which, built in 1968, is now beginning to show its age. Such ground improvements would also help the club attract other sporting events such as rugby union (it has previously hosted a Heineken Cup semi-final) and more general entertainment such as musical concerts.
"We have to strike a deal that helps us go forward and do other things within the ground," adds Arthur.
And the negotiations of the lease and the debt go hand in hand too.
"Long-term certainty over the tenure will get us better terms with the restructuring of the debt."
However, the club's negotiations with the council have attracted criticism in some quarters from those who think taxpayers' money shouldn't be going into the pot.
In particular, Rushcliffe MP Kenneth Clarke, one of the club's highest profile fans, has claimed it is wrong to divert public money towards helping private corporations.
Arthur takes strong exception to Clarke's outburst."I think it's fair to say that Ken did not have all the facts at his disposal when he made those comments. I would simply put it this way. If Nottingham Forest did not exist in the city then taxpayers would suffer greatly and so would businesses that see the club as a significant part of both the history and present-day business life of the city."
In fact a precedent has already been set in the city, with the council - which is keen to be fair to both city clubs - recently agreeing to help out Notts County by guaranteeing a loan taken out by supporters (see sidebar).
Arthur reveals that the situation at the County Ground has also complicated negotiations with Forest. "Our negotiations have been protracted because of the problems that County have faced."
Ground expansion for Forest is still some way off. For the time being every spare penny will continue going into the playing side to get the club back into the Premiership, insists Arthur.
"We would hope that once we have secured membership of the Premiership once again and consolidated our position we can complete the refurbishment."
One thing is for sure. If and when the club returns to the Premiership (and the play-offs already look the best bet this season) Arthur has certainly succeeded in making sure the club are ready when they get there.
In areas such as raising attendances, youth development and sponsorship Arthur has made a big impact.
Take attendances. Four years ago the average attendance was 17,000. This season it is touching 25,000. Take season ticket sales. Last year they were 8,000, this season they have almost doubled. Take merchandise turnover. Four years ago it was approaching £3500,000. This season the forecast is treble that. All figures that are, of course, so important now that gate receipts are the prime source of revenue for the club.
Arthur's focus on boosting and fostering the club's image in the community has paid handsome dividend. Earmarking youngsters as potential supporters has had a remarkable effect on merchandising through schemes such as its free shirt campaign.
"Wearing the shirt is a symbol of allegiance, affinity, pride. We are striving to emulate clubs like Newcastle United on that front," adds Arthur.
On the sponsorship front Experian recently announced funding to re-equip an ICT suite which provides after-school educational support for over 200 pupils from the city. The centre has also provided an educational base for Forest's Academy players.
Earlier this year Forest also announced the biggest sponsorship deal in its history, with Capital One. Arthur has described it as the "most perfect sponsorship fit that I have ever conducted".
Arthur's success in laying foundations in the boardroom has been repeated on the pitch too following the appointment of Paul Hart who - just like Arthur - has been very quietly putting the club back on the right track while staying loyal to the club's strong traditions post-Clough of nurturing young talent. He is a manager who "believes in all the good things that Nottingham Forest has always been about," adds Arthur.
But just as Hart continues his fight to get the club back into the Premiership, so Arthur knows there is plenty more to go at. It has been estimated that there are up to half a million Forest supporters across the globe.
"If there was any doubt about Forest's global identity it was removed by two goals scored by Trevor Francis and John Robertson in Munich and Madrid in 1979 and 1980," adds Arthur.
"But perhaps because our success in that era came very quickly it's possible that the enormous spin-offs were not maximised as well as they might have been at the time.
"Because of past exploits the name of Nottingham Forest is still a brand leader in the East Midlands and retains the global identity that was created two decades ago."
It's a brand that is also far stronger than the East Midlands brand itself, believes Arthur.
"It is difficult to brand the entire region when it is basically based around three cities. I can understand what bmi are trying to do at the airport by suggesting it be called Nottingham Airport. It is far more logical. However, if I was being fair about things it would be better to call it Derby City Airport than East Midlands Airport."
Regarding the wider region Arthur also has some telling words. "Do people from the rest of Europe and further afield see the East Midlands as a destination? I very much doubt it. Do they see Nottingham as a destination? Yes. However, although Nottingham has reinvented itself pretty well over the last 10 years even here there is still a job to do regarding its perception and what it now represents."
Forest themselves continue to reinvent themselves, albeit in a quiet and unspectacular fashion. Arthur admits that when he took over he deliberately aimed to be unseen and barely heard outside the confines of the football ground.
"I've been quiet up to now because we didn't have much to shout about. I wanted to make tangible improvements to the club. I didn't want to make empty words. We did not want to be shouting from the rooftops."
Indeed, as Arthur kept reminding me during the interview, "the club is all important, not personalities. I am doing this interview for Nottingham Forest, not for Mark Arthur and I want to stress that."
And on that note the phone rings again
The mystery of Derby's financial backer
It isn't just Nottingham's football clubs that have seen recent upheaval in the boardroom. Just take a drive down the A52 towards Derby.
Another month, another East Midlands football club changes hands.
At the end of last year it was the turn of Derby County where Lionel Pickering's colourful reign finally came to an end.
A month after the club was put into receivership by the Co-op Bank, a consortium of businessmen led by barrister John Sleightholme, business financier Jeremy Keigh and marketing entrepreneur Steve Harding came up with a refinancing package to buy the club from Derby County Ltd, the parent company which went into receivership.
But that was only the start of the fun. At an initial press conference reporters were still left scratching their heads about who the new owners of the club actually were.
Sleightholme, a barrister and also deputy coroner of North Yorkshire, said that the £315m that had been needed to make the takeover possible had been put up by someone else, who wished to remain anonymous.
A week later he stressed that the ownership of the club was no mystery - he owned two-thirds and Keith owned the other third. But quite where the £315m came from remained a mystery. It was subsequently revealed that the backer was a company called ABC Corporation, a Panamanian lending institution which also helped QPR out of administration with a £310m loan last year.
Sleightholme has refused to talk about where the money came from, but suffice to say that the loan was used to reduce the club's debt with the Co-op Bank to about £316m and to clear its debts with financial house Lombard. The club's debt remains at about £331m but its loans are now structured so that their affordability is in line with the business.
Whether the new owners actually now have any funds to invest in the team remains the great unanswered question.
Notts County saved
Days after our meeting with Mark Arthur, Notts County, the country's oldest football club, finally found a way out of administration.
The Blenheim consortium bought the Division Two club just a week before the Magpies were facing expulsion from the League after having been in administration for a record 17 months.
If County had not met a 9 December deadline to come out of administration they would have been expelled.
Peter Joyce and John Mounteney, both former directors of the club, are leading the Blenheim group and, along with Roy Parker, a former Leicester City director, and the supporters' trust, they are now in control.
The supporters raised £3250,000 of the £34.2m required to satisfy creditors, of whom the Inland Revenue was the biggest.
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