Interview with Derby County Football Club’s Chairman, Peter Gadsby
1. How have you managed to turn Derby County FC around in 12 months?
Well what happened was that 12 months ago, due to the demise of the club and local people asking for something to be done, a group of people got together and invested a substantial sum, had a discussion with the bank about where they would like to be and basically they were supportive of us and we took over the club a year ago and it was very difficult with debts. Those debts have now been removed and we set about restructuring the club. The first thing we did, is like in any business that we take over or get involved with we took the tough decisions. The tough decisions hadn’t been taken so the tough decisions were taken with regard to the previous manager, with regard to the staff, with regard to players and so we got stuck into it. And then the key thing was finding the right manager and that was about like finding a new chief executive of any business, we kept looking, got all the figures, statistics, who’d been the most successful and Billy Davies fitted the bill. He was in play-offs which was he’s second time, he was ambitious, he was with a club that was smaller than ours and therefore hadn’t got the budgets and so we persuaded him to come and one of the things he said at the time Jackie was, if I come to you and I get up will you support me and that’s something interesting that we are doing now. So Billy Davies, we had a three year plan which was to get us into the Premiership in three years and that was the plan and that’s been thrown apart because we got up in one year and we got up the great way, which was Wembley which was a magnificent day, a tremendous experience, but that’s created its own problems, it’s a bit like a business winning a big Marks & Spencers contract redistribution when you are only just geared up to do a small part, you take the business from Marks and you then try to do it and we are doing that. We’ve taken the premiership, we are delighted but we have got to get the infrastructure right now. So what we are doing now is rebuilding the club and it’s a very exciting part.
2. What encouraged you to get involved with Derby County FC?
Traditionally people have never made money in football, its been one of those businesses that has been one of love, that you want to support your club. I guess that’s what we have seen, although we have now seen Premiership status and 55m and clearly the club has now got a turnover of £50m and is valued at probably somewhere around about £50m and that’s because of the Premiership. No we came into it because we were local people who cared for the club and getting local people to care is good but its not easy always managing or chairing strong minded business people and so its had its own issues to deal with. But fundamentally everybody has got the club at heart and what we’ve done is made sure that we bring in a whole new chief executive, operations director, finance director and very much like our own businesses put people in charge who can run the business, so that was the experience and that’s what we have done really.
3. With regards to the play-off final in May, it was billed as one of the most expensive games in football (£50m). Share with us your emotions from the day?
Well, the day at Wembley was one of… very much like getting married. You are waiting for the big day and you want to make sure that you don’t do anything wrong. And many people say that after the day is finished you think gosh I wish I’d done this, I wish I’d said hello to somebody. I wish I’d gone and done that. And that was very much my experience that I was first of all conscious of the responsibility I had in terms of conducting myself that if we lost, I must conduct myself properly and be part of the thing and not do what I do sometimes. Well you know when you playing at home and you lose you can go and sneak off and sit in the toilet and kick like mad but you have to bear in mind that you’ve got the whole of the world really looking at you. So Jeremy Pierce and myself who was with West Brom met and said one of us was going to be disappointed but we will deal with it in a proper way and shake hands. And something that perhaps many people didn’t know but I’ll tell you is that you have an agreement that is something that nobody knows about, that the loser gets all the money. Normally that is split 50/50. And up until I think two years ago what they said is that since the money is such a big reward to win, the TV money, the two million pounds, I think it is that you get on the day from the revenues goes to the losing club. So we shook hands on that and that’s something that nobody knows really. It’s a handshake and the £2m went to West Brom. And so I was thinking to myself, well at least it’ll be £2m million if we lose.
You’ve then got an enormous amount of protocol to go through on the day when everybody wants to meet you and say hello. But in your mind all you’re thinking about is what Billy said is that such-and-such is struggling or you know what it is. But Billy Davis was absolutely positive he was going to win, and he even told me, as you probably read about it, who would score the goal. He actually said that, you know Pearson will come into the game and when he will actually score the goal? So he’d got his plan laid out.
Then I went into the royal box; it was perishingly cold as you remember, and I refused to wear a coat because I hadn’t worn a coat for the rest of the season, or the preliminary rounds. And I was freezing and I sat there and Lord Wahinney was next to me and various dignitaries and they were talking to me and I was just watching the game and saying quietly please let this happen please because we had been always the favourites to go up and you know I was saying if it’s to be it’s to be. And when he scored the goal Pearson, it was the longest 30 minutes I’d ever had. And when it happened and it wasn’t about the money it was about the fact that we’d actually won something. Because what I’ve said to Billy was, that Pride Park, which I was involved in when the stadium was built 10 years ago hadn’t had any success. We’re a club that in the 1970’s you always saw Derby County, Leeds, Arsenal and they were always in the top three as you’ll remember. And we’re a big club but we’d had no success for years and years. And I said to Billy you know what this club needs is some success and Pride Park needs to be a winner. Because all we ever talked about is what was happening before and suddenly we’d got success and that’s now all around Pride Park and all the club talks about now is Wembley. And so that was very emotive and then I left and the process was that I wanted to get on the pitch to see Billy but the problem was that I couldn’t find my way down, so I ended up in the kitchens. And the reason I was late and everybody else was… I was in the kitchen and I’ve got this guy I was trying to ask how the hell do I get to the stadium? And he was going football football and at the end of the day I ran down this corridor and I missed unfortunately, a lot of what was going on and then I arrived and saw Billy and he cut short his interview and came over. And we had a big hug and he said we’re going to enjoy this.
And then I wanted to get back up again because of course they present the cup and if you look at the pictures I’m not there receiving the cup so I should have been up there with Lord Wahinney when the cup’s brought up but I couldn’t get back up again. So what I said at the beginning was, it’s a bit like when you think to yourself I would do things differently so if I was going to Wembley again the next time, first thing I would do is make sure I knew my way down. Secondly, I’d wait there, but anyway. So you know and I didn’t go and see some people who were friends who had said that I’d got tickets for because the day just went by and then at the night time it was a tremendous party at Windsor. Billy had said that if we stay down and we’ll have the party at Windsor. We were against it because everybody tells you that if you lose the best thing you can do is get in your car and drive. I don’t know what we’d have done Jackie if we’d have lost. Because I couldn’t see anybody wanting to sort of party. But we did and that was good. So that was the day.
4. You’re the bookies favourite to go down this season. Where do you think you’llfinish this season?
…. Middle of the table. We love it that we’re favourites to go down. Plastered on the wall in the dressing room already. Billy loves a challenge; he can’t wait for it. You know that’s what we are. We were 125-1 to get promotion this time last year, believe it or not. 125-1 to get promotion Derby County were. And we got promotion. What a bet that would have been, so get a bet on us if you think we’re going to get relegated.
5. How do you think the influx of overseas owners will affect the dynamics of the game?
Well it’s already affecting it. The football league, the premier league, I was with a premier league chairman last weekend and he’s concerned Kayborn? was making a statement that they wanted a meeting because I think everybody’s concerned, why and how this money is coming into the premier league from sources that are yet unqualified quite frankly, creating an enormous problem for clubs like ours. Because the money that they’re bringing in is money that is not normal money in football, and I’ll leave it at that, when I say not normal money. But what it’s doing is creating an artificial inflation in wages and buying. So we’ve got to tackle this now and people are saying that what happens when these people withdraw? I don’t know, I think there will be some clubs that will actually just be left to the wall. Whether that’s a year, two years or five years I do believe they’ll withdraw. Because they don’t have it hard. I can’t withdraw. I can’t just say I’ve decided I’ve had enough and you know I’m no longer investing in Derby County because you know that would be my reputation and everything. But there’s less and less people now who are family people or local people who own football clubs. I think it’s only six. And an interesting thing again to your listeners is that you only need 14 clubs to change the whole of the structure of the Premier League and I think there’s 13 clubs now in foreign ownership.
6. What have you been doing to tackle the challenges of getting into the Barclays Premier League?
Well as a business to take advantage of the tremendous opportunities in revenues. I mean the Sky money is substantial and in any other business you have a huge sum of money coming in that hits your bottom line straight away without having to pay any extra. Theoretically you could take the money and run. That isn’t the way it would be now, but what you’ve got to think about is all about players and wages so that’s going to be your additional overhead. And it’s our balancing act now which is how much of that we’re going to put in to make sure that we stay up. Clubs like Watford didn’t really do it last year. They basically took a view that they might be a yo-yo club. Nothing wrong in that, but we’ve decided we’re not going to do that. We’ve already spent £10m and I guess there is quite a bit more to come.
But Billy has his own brand of promotion of players. But what we’ve done is first of all made sure that the revenues, the turnovers right, the shirt launch, everything else is there, the corporate was sold out, the season tickets were sold out. We’ve just launched our new initiative on development to make sure we capitalise on that. And then the next thing is to do is to make sure that we compete. And I’ve been spending a lot of time talking to chairman, some of whom are already up some who’ve been down. And asked them, tell me what it is I should be doing? Tell me what are the secrets. And they’ve come back and they’ve said first of all Peter, fear. Don’t be frightened he said. One particular chairman told me at Charlton that it took ten games before the manager suddenly thought I can beat these teams. So watch us Jackie we’re saying ok there ain't going to be any fear. The other thing is don’t change it too much. Another manager said, ‘I changed it too quickly.’ I got rid of all the players that had got me there. I lost the team spirit. I got better players in, but it took so long to bed them in and therefore if you look at our club, the Darren Moors and people like that who’ve been part of our club will stay with us. Whether they stay the season I don’t know but they’ll stay with us to get us going and to be part of it so we don’t lose that spirit that we had. And so I’ve been really learning about what the secrets are like in any business what the competition are doing and I’ve got a plan, which is, I’m not going to tell you.
7. What has been one of the biggest learns in your career in terms of running a business?
I spent six months of my life doing this stadium and Birch was growing and I remember we lost a big contract. And I said to the chief executive why did you lose it? Why wasn’t I involved? He said, ‘Well you didn’t come to the meetings.’ I said but why didn’t you tell me I’d got to be at that meeting. He says because you were still at the stadium. And I said ok. And I realise now and this time I’m not the same so I’ve put enough structure in but I don’t throw everything into football. I actually make sure the business is being run. Because for a lot of people if you get chairman of a football club, it’s your dream. You know, it’s just you know going to London to premier league meetings. You’re meeting billionaires, your meeting. You could just say, that’s my job now you know. But I don’t, I keep my feet on the ground and I want to make sure that I’ve still got my business.
8. You’ve just announced plans for a £20m redevelopment of Pride Park. What does that mean for the city of Derby?
Well when we bought the club one of the things we looked, at when we were evaluating it, was what assets were underutilised and where we could get added value. And being in property and development we could see that there was large car parking and other clubs that have been Reading, Liverpool many of them are now developing their stadiums and what they’re doing is they are making the assets work and providing more opportunities for fans and other people to bring income into the club. So what we’ve done is we’ve launched a £20m development to bring in retail, restaurants, offices and a new hotel linked to the club so that we can join in with our conference facilities just like other clubs have done. And we’ve gone for planning on that and we anticipate getting planning because we’ve been in consultation with the council now for some time. And that will start next spring and it will bring a substantial… many millions of revenue into the club which would’ve been in our plan of three years Jackie, given us a change to have had a next boost to get into the premiership. Now we’re in the premiership what we’re doing is we are using that money to take us that bit further. So it’s using the expertise I’ve got in business to make sure that we capitalise on every bit of opportunity there is.
250 jobs 150 full time, 100 part time. Pride Park is 8,000 people work here. I built half of it. It’s been a huge success. And there’s no facilities on here, of retail, or hotel, not many of them anyway. So what we’re going to do also is capitalise on the opportunity there is here and sort of indigenous group of business people who wants facilities. So it’s going to be a very big success because football will make it a success but then there’s no football everybody else will be using it. And it’s going to create more revenue for the club.
9. Barclays Spaces for Sports has just opened a brand new site in Derby. What impact do you feel this will have on the local community?
Well I mean, its grass roots, I mean if you go and look at football the amount of children and people associated is tremendous. That’s a big responsibility we’ve got and I think that the responsibility you’ve done to put some funding into that is tremendous. It will provide you know facilities for people and its communities, many of the things that we deal with is communities. It’s a word that’s easily used communities but it’s it is communities is us. It’s what it’s all about. And I think that you’ll not be able to value, in monetary terms, what actually that is worth because you know like we can’t as a football club. Barclays won’t be able to value it but it’ll be immense because it’s going on all the time so I think it’s a good thing.
10. How did you get into the property business?
Because I had a flair you know I was in other businesses for the first part of my life and I was glad that I did that because that gave me the discipline. I became a marketing and managing director of various businesses but I found myself self-building properties very early on and that was my hobby and passion and that became a big success and I sold quite a big portfolio of properties that I’d built up in the early late 70’s or 80’s. And then I started up a housing company because the housing market was starting to take off. I found I had a skill, I could see opportunities and I built up land banks and I built houses, up to 400 houses and then as a banking organisation you will know that the housing business requires a lot of funds and I was borrowing an awful amount of money. And to go on to the next stage from 400 to 500 houses to a thousand would require substantial gearing.
And an opportunity came to sell, which was substantial, nearly £40m, and so I sold the business and it was a little bit of a thing about wanting security, you know, I’d been working hard all my life. I wanted to know I’d made it. And that was what I’d wanted. I wanted to know I was never going to have to worry again. And I thought my ambition had gone but once I’d had 2 or 3 months kicking around I decided to start again. And I started again but more in the commercial property than residential and today we’ve got a business, our capital which is close to £85m turnover, so, employing about 80 people. And I find that I still like the cut and chase of business and that’s something that I think I’ve got and I enjoy it so. We’re now a very very strong business and its got a lot of the people who used to work for me before are working for me and it’s a key part of the business.
11. As a property and construction expert, what are your views on the UK property market?
Well it’s a very pivotal interview this because we’re now looking at a time when the property market has started to run out of steam. We have two sectors, residential and commercial, the residential market is now levelled out, and if it wasn’t for the imbalances of London we would be seeing probably a very stagnant market. Which is one of the problems why we’ve got interest rates is that the property market is a key driver here. I think there’s two things; first of all you and many of your colleagues would have all done very well at property in the last 10 years and it tends to have been down to one of the biggest residential booms there’s been. And that happens every 20, 30, 40 years right. Nobody could see it coming and it’s been tremendous. And that’s created its own problems but it’s given an opportunity for wealth and asset value to be tremendous and people are still going to use that. And I don’t think that can change. I think people are finding themselves in houses worth half a million pounds will still want to use that to enable their lifestyle. Inflation will still be an issue and clearly that’s the one thing that is going to be the thing that is going to be really the benchmark to any interest rates.
Commercial property of which there’s been a tremendous boom. There’s been a wall of money. The markets have been strong. 2002 saw the share price collapse. People who were in shares exited to property. We saw an enormous amount of money come into property in the early part of this century. And that has created an absolute boom in commercial property which we’ve benefited from. And it still is there. There’s still a wall of money in commercial property. The key issue that we have now is to make sure that the yields aren’t going to go back and that we can still consider to drive the business.
12. You run your own property business with an annual turnover close to £85m, you're Chairman of Derby County FC, is there anything else you're involved in?
Well I have been, and still am involved in advisory boards, which using my expertise I’ve been proud to be a director of the Regional Development Agency which is ?? I enabled the City of Derby to get their status as regeneration city through cityscape and I’ve been on various other boards that I find quite interesting. I only ever serve on them for three years because I believe then you know it’s time for other people to move in and although I’ve stayed on some an extra year. But that’s what I’ve believe strongly in and I believe you should spend some time in the region giving your experience back. So I’ve enjoyed that.
13. As a successful businessman with a proven track record, what top tips could you give to other business owners to emulate your success?
Well I think and I do get many people Jackie asked me you know for advice and things. I’m very happy to do that but usually along the way for people to make the wealth I’ve made there’s two things: risk and reward. And in the early days in my business there was a lot of risk. You know, I had to put my house on the line to borrow money. If things hadn’t gone right it would have been very difficult so you know, are you prepared to take that risk and reward? And usually people aren’t. You know usually they’ll say well I’m ok but I’m not going to go that far. So first of all I say that it’s an exceptional business which is risk and reward.
Turning to formulas which possibly make success there is no substitute for hard work. You know probably you gather I work very hard. I still spend 10, 12 hours a day even though I could afford not to. There is no substitute for that and when anybody says that he’s going part time he may as well say you’re out of it. You’re either in business or you’re not in business.
What I tend to do, my success has been I’ve had a very very good relationship with staff and people who’ve grown with me. And I try and anticipate the staff’s needs. If you want to grow a business rather than people knocking on your door and saying you know I really would like a promotion or I would like some more money. Try and anticipate. I always try and anticipate and sit down and talk to them. I’m successful. I’m growing. I’m making a lot of money. Surely they’re going to say the same thing. So I sit down with them and say well how can we work together and make sure you share in my rewards.
Communication. Very very important. I communicate a lot with people. The other thing is is not to take yourself too seriously. Always believe other people can do things better than yourself. I always take a view that when we’re looking at deals sometimes somebody might be about 10% better than me so we try and think it through and think well, how would anybody else tackle it?
And ask questions. I spend a lot of time you know in the show houses asking people. Just talking to people. Finding out about what the business is about. So that when I sit in a meeting I actually am informed and I know what’s going on.
And the other thing is: Keep it simple. Keep it simple. Sometimes people try and be too complicated you know. Keep it simple. Work hard, you know. Revisit your business. Keep looking back into it and asking the questions is there anything else that can be done. And usually that’s a success.
And the final advice to give to anybody is sometimes just say now I want to make money. There’s many many opportunities that are right under your nose. The good ones are the ones that are there right in front of you. That it’s just a matter of saying well that’s something I could do or why hasn’t anybody else thought of that? And sometimes people try and be too complicated. Many many opportunities exist if you just look around and say yep there’s an opportunity. I should do that.
14. How do you maintain a work/life balance?
Well it’s really about a formula I’ve had for many years. First of all fitness. I am somebody who really enjoys keeping fit and I work hard at that, even at my age. And I do switch off. I’m very very fortunate that I do switch off. It’s very easy for me. You know sport is a very good motivator for me and I tend to you know relax with sport and I find football at times a relaxation and so you know, it’s the balance thing really for me and I’ve also been taking risks in my life and I’ve got used to measuring those risks and I’m now in a fortunate position where I’m financially secure which wass one of the big things for me in the mid eighties of why I did the first big deal. To make yourself financially secure and when people say to you sometimes how can you do that? One of the best things that can happen to you in your life is if you’ve no mortgage, you’ve got money in the bank and if everything goes wrong you know with a job you can still live. And it’s a great feeling to be in. Not many people can be that. And I had that very early on. So that just gives you confidence. And the confidence is the thing I’ve had for a very long time. And I guess that the confidence helps me a lot.
15. You must have met a number of famous/interesting people along the way. Tell us about some of them?
Well there are many interesting people. I mean you go back to when I was in the premiership before. You know with Man United going through its problems. I think it was the chairman of Marks and Spencer’s was there. In premiership football you know you look at Philip Green associated at Tottenham and Alan Sugar, there’s always the big successful people follow football. They always come in the boardroom. So the great thing about where we’re going down the premiership route is that you will just walk into a boardroom and there’ll be all those people there. And they’re usually very nice people and happy to share their experiences. We’ve got some heavyweights in our boardroom as well. We’ve got Sir Nigel Rudd who’s a big supporter of Derby County and so is his family. And Nigel comes to most games and we’re delighted to see him there but we’re even more delighted if we could get him onto our board but he’s got this thing about fixation about not joining football but he’s a good supporter and he’s very enthusiastic and very knowledgeable actually about football. So we’re delighted to have him.