Geelong Cats CEO Brian Cook has a unique approach to the business of sport, embracing the idea that excellent people, leadership and planning are vital elements for building a great sports club. This approach has seen the Cats achieve huge success in his time at the helm, winning the premiership on three occasions. Mr Cook spoke to The Australian Business Executive to explain why character always comes above talent.
Mr Cook moved to the Geelong Cats with the help of Frank Costa, the executive chair of the Costa Group. Mr Costa was Mr Cook’s first chairman at the Cats, recruiting him for the role of CEO at Geelong in 1999.
“Frank Costa is a character first man,” Mr Cook says. “When I went through his Derrimut offices, I noticed on the wall that there was a huge sign that said ‘character first, talent second’, and he was the one that orchestrated the initial momentum around this.”
When Mr Cook arrived, the club was in dire straits, turning over just $16m and sitting in $10m of debt, with a dilapidated stadium and a captain and coach who were both on the verge of leaving for pastures new.
The club was also in the unsustainable position of having six players who were taking up half of the Total Player Payments budget. This put immense pressure on the salary cap, around $6m, meaning drastic action was needed to manage salaries.
“It was a real mess, and so we basically tried to develop a plan to get out of that, Frank and me and the board, and it took about twelve months before we could see any light at the end of the tunnel. We did turn it around eventually, but it took some years.”
A careful combination of cultural and financial strategies was put into place to lift the club out of the mire, including the decision to begin hiring and firing with an emphasis on values, putting the inspirational words from Mr Costa’s office into practice.
“We rewarded people on not only talent and winning but also on values, how they did things. We let people go on the basis of, even if they had a lot of talent, if they weren’t developing the values, particularly the team things, we let them go.”
This resulted in the club parting ways with nearly 70% of its staff in the first two years of Mr Cook’s tenure, and in the first three years seeing nearly half the players leave. This huge turnaround laid the foundations for the rebuilding of the club with new priorities.
“We started to develop a master plan for our stadium,” explains Mr Cook. “We’ve been on the go for fifteen years now on this stadium, and we’ve been able to attract, including our own money, $200m of funding for four stages, and we’ve got one to go.”
Each stage of the build has required funding from a combination of federal government, state government and local government, as well as from the AFL and the club itself, meaning there has been nearly 20 different funding grants over the four stages.
The stadium itself is a huge part of the club’s continuing plans to increase yield, with the club making about $900k profit per game, pulling in an average crowd of nearly 25,000, giving a yield of over $35 per head.
“This has become our most important contract in the footy club. Not our best players, but the stadium contract, because this is what keeps us alive, it drives our economic engine, profit per game.”
The stadium at Kardinia Park was so dilapidated in 1999 that there was talk of the club playing its games in Melbourne. It has only been more recently that the ground’s longevity has been discussed, the idea being for it to become a regional hub of elite performance.
These plans have been boosted by the sale of the naming rights to Simonds Homes in 2011, and in 2013 the stadium had floodlights installed for the first time, meaning it could begin to host night games.
“The current Victorian state government has established a management trust to look after and promote the stadium now, and that’s a real positive I think. It means that there’ll be an independent body who will manage the balance sheet, who will promote the special events, and we’ll simply become a tenant.”
Mr Cook believes this is a huge plus point for the club, as any club’s core focus should not be on stadium maintenance and development, as it has been for Geelong for the last twenty years, resulting in the club’s activities being spread much thinner.
“I have eight general managers,” Mr Cook explains, “because of the nature of this area and of our stadium. I have an infrastructure general manager, a community general manager, an IT general manager, an HR general manager, a footy general manager, and a few others.”
Building a Culture
After many years with Geelong Cats, the defining moment of Mr Cook’s career came in 2014, when he was offered the chance to make a big money move to North Melbourne Kangaroos, an offer he declined after much deliberation.
“I decided,” Mr Cook says, “mainly because of the people at the club, whether they be directors or staff or players, I had developed relationships with them and I’m quite engaged with them. Should I have started again somewhere? Who knows.”
Seventeen years with the Cats has seen Mr Cook grow comfortable in the role, and at the time the decision needed to be made, he found he couldn’t leave, after being on the verge of deciding to do so.
“I was very close to going, really close. I actually had made up my mind that I would probably go, but I wanted just a week to think about it. By the time I got back, the board had met and made another offer and I had pretty much decided to stay.”
The key to his decision was the amount of time Mr Cook had put into helping to develop a fantastic team ethos, which he hopes can be embedded in the club for many more years to come. Such a culture can take a lot of time and dedication to create.
For Mr Cook, the key to getting the best out of a sports club as a business is to first identify what the club’s competitive advantage is going to be, something he believes most clubs have still not managed to do.
“Is it going to be their ability to recruit fantastic talent? Is it going to be their ability to train up talent and get the best coaches in Australia? Is it going to be the branding of the group, their community programmes, their profit per seat of the stadium?”
He admits, however, that in the equalised environment offered by the AFL, this is easier said than done. The league structure is intended to make it equally likely for each club to win the premiership, making it tough for clubs to develop true uniqueness.
“Some clubs win three premierships in five years, like us,” Mr Cook explains. “Or Hawthorn, three in a row. How do they do that? Well, my feeling is they work on three or four or five, or ten things, which are really relevant and unique to their own development.”
This way of working then becomes part of a club’s DNA, and over time it is cemented and improved upon. Geelong’s unique areas come from the club’s ability to attract and develop great people, to develop excellent leadership and culture, and to always have a great plan.
“What runs through all of these things is values, and so values become a big focus for us. If you talk about great people, you talk about people with enough talent, but with great values, with great behaviours.”
For Geelong, the club is run on the basis of ‘character over talent’, prioritising the recruiting of the right people with the right attitude to the club. Mr Cook believes this ethos has been a main driver in the club’s growth and success over the years he has been in charge.
Mr Cook cites Sydney Swans and Hawthorn Hawks as examples of two AFL clubs with great cultures spanning many years. It is no surprise that these two clubs, along with Geelong, are generally regarded as the top clubs in the league for player satisfaction.
In addition, the club has staff members who follow the sporting landscape regularly to observe developments in other sports, with regular trips to the US to watch the NFL, as well as time spent observing rugby teams such as Scotland and New Zealand.
“We send four of our executive team to Harvard,” Mr Cook says. “I think our managers get as much if not more mixing it with fifty CEOs or GMs from other industries and other countries as they do by mixing it with other sports organisations.”
Decades of Change
Having begun his career back when the original Victorian Football League (VFL) became the Australian Football League (AFL) in 1990, Mr Cook has seen plenty of changes in the way the sport and the league is run.
“I’ve been in the AFL/VFL system now for two decades, for twenty years,” Mr Cook explains, “and it’s amazing what’s gone on in terms of change, not only culturally but economically. It’s changed dramatically.”
Mr Cook’s career began in 1986, when he started working for the Western Australian Football Commission, in charge of its football development area. Back in the 1980s, many elements of the game were significantly different from how they are today.
“I remember for instance, the broadcast rights, they were with The Winners on Channel 2, and the AFL were getting about $1 million per year, for the whole season. When the new broadcast rights are triggered in 2017, the AFL will average $2.25 per game.”
This change in the level of broadcasting revenue is just one indicator of how big the sport has become in the last thirty years. The economic shifts in the game have been colossal, and Mr Cook has been around the sport long enough to have witnessed many first-hand.
“I remember starting at the West Coast Eagles in 1990, as CEO, and we were turning over $4m. I think they’re turning around about $80m now, and our football club Geelong is turning around $55m. So there’s been just huge growth in that economic side.”
At the time of Mr Cook’s arrival at the Eagles, player wages were at an average of around $50k, whereas in 2015 players are for the first time in history demanding an average of around $300k to pull on the team jersey.
“There’s all those types of stats that are around that indicate the enormous growth,” Mr Cook adds. “There was something like 1 in 60 people in Australia were members of a footy club back then, and now its 1 in 28.”
The growth in popularity of the sport has been meteoric, with an AFL game now averaging 33,000 fans, the third highest average attendance of any league in the entire world, an astonishing achievement.
“The industry has become more equalised. If you want talent, if you want dollars, if you want good fixtures, you need to understand we’re an equalisation system and it’s structured and it operates in such a way that only one team is supposed to win it every eighteen years.”
The continuing equalisation of the industry has seen the AFL get closer to parity than any other sports competition in the world, with the possible exception of America’s National Football League.
One of the biggest changes in the league currently is the digitalisation of the game, with more and more opportunities available for people to watch the sport and engage with their favourite teams.
“There’s going to be more usage of mobiles, whether it be for Instagram or whether it be Facebook or whether it be the games themselves, live television, ordering food and beverages at games, we’re certainly moving into a digital and mobile world here in the AFL.”
For clubs like Geelong, the question remains of how to go about commercialising the digital area, with social media becoming particularly important. Mr Cook admits to moving the club’s social media from its media arm to the commercial arm to reflect this importance.
Geelong’s location as a smaller city just outside Melbourne has proved advantageous for the club, helping it avoid direct competition with the big clubs in the Melbourne region, which has traditionally represented the league’s stronghold.
“[Geelong] has its own communities, and really has its own territories,” Mr Cook explains. “Once upon a time, other AFL clubs did have that through their zoning, but they don’t anymore, and so we have that unique advantage.”
The club is in the position of being able to promote, capture and integrate with the community in ways other AFL clubs are unable to, a position it tries to exploit at every opportunity to maximise revenue.
“In fact, we extend that uniqueness to being what we think is attractive to all regional Australians, so that people who live in the rural areas can attach themselves to our brand, being a regional club, and we’re the only regional club in the AFL.”
Research into the club’s fan base shows the club attracting nearly 50,000 members for the first time in its history, with around 26,000 of this number living in Geelong, about 18,000 in Melbourne and 6,000 in other parts of Australia, particularly regional Australia.
“We have two markets, much like Hawthorn are trying to develop two markets – one in Melbourne, one in Tasmania – we’ve naturally developed one over a century I suppose, and we have a hybrid element to our club in terms of its marketing arms.”
These two arms of the club’s marketing are in Melbourne and Geelong. The club also boasts the league’s highest percentage of female members, with 40% of the club’s 50,000 members made up of women.
With the global development of the game encouraging events such as Port Adelaide Power heading out to play in China, Mr Cook is aware of the pressure in the modern game to move the club from its local markets into the international sphere.
“I think we’ve really got to capture Greater Western Sydney and the Gold Coast and make them work to be honest,” he says. “That’s our priority. Let’s capture Australia first, and we haven’t quite done that yet.”
Mr Cook believes the league should be aiming to have the game become the dominant code in every Australian state first and foremost, but agrees that China in particular offers great opportunities for clubs to grow their international brand.
“A media deal in China is probably worth fifty times the media deal might be worth in Western Australia, for instance, and I understand that, it’s relevant. I’m not so sure the game comes first though. I think it’s a bundle of activities that probably need to take place.”
This bundle would need to include a significant amount of television and promotional activity, as well as offering the chance to recruit one or two Chinese athletes onto the rookie list of a number of AFL clubs.
More important than any overseas expansion is the club’s community activity, the centrepiece of which is the Deakin Cats Community Centre at Simonds Stadium, which has seen about 240,000 people pass through in the last three years.
“This is an amazing feat given the total population of Geelong is 220,000. We have a lot of deep dive projects, like ‘Closing the Gap’ and ‘Read the Play’ for depression. They’re all related to good decision making in young people.”
In addition, the club regularly visits hospitals, schools and clubs to help out the community. All of the club’s players are involved in these visits, taking on ambassadorial roles in the club’s community strategy.
“We’re really proud of what we do in the community, and I think that’s one of the unique things that we do have. It would be fair to say that our club doesn’t see its success as simply winning games, it’s more than that. It’s about engaging with the community, living our values, being commercial and considered.”
As with any sports team, taking advantage of commercial opportunities is vital to sustaining financial stability. Geelong has benefitted from many such relationships, most notably its longstanding partnership with Ford.
“The Ford sponsorship is a magnificent one,” Mr Cook says, “because it’s been going since 1924, so its approaching over ninety years now. We’ve got a contract that goes until its ninety-fifth year.”
This deal is one of if not the longest in the history of sports, and represents a significant achievement for the club, something which can only be matched by high profile deals such as Wrigley’s sponsorship of the Chicago Cubs’ baseball stadium.
“We wanted to put ourselves into the Guinness Book of Records, but what we had to do was prove every year that we had some correspondence from Ford or that we’ve provided Ford, and we just haven’t been able to do that, we haven’t got the records.”
The partnership with Ford has been fantastic for the club, in the early days, there were assembly line jobs given to the team’s players, as well as the players being provided with cars. Every year the partnership has grown. hugely benefitting both parties.
“They’ve found in their own research that pro-rata on a per-head basis, the sales of Ford are the highest pro-rata in Australia, in Geelong. So, there’s more people in Geelong pro-rata buying Fords than any other car.”
More recently, Ford has ceased manufacturing in Geelong, but maintains a high sales and marketing presence in order to continue selling cars, meaning the strength of the relationship remains despite the change.
The change in broadcast rights over the years has meant increased opportunity for corporate sponsors, with the club looking to increase levels of branding, marketing and sales through television, attendance and in particular social media.
“The sponsorship world, the corporate world, is just moving all the time I reckon, and it’s quite dynamic at the moment. Simonds [Homes] are becoming a public company now, you’ve got the changes at Ford, you’ve got the changes at [health insurers] NIB and their market which is international now, not simply in Australia.”
Mr Cook recognises the need for clubs to be aware of what corporate sponsors are working on, and how they can be linked with the club to create new campaigns to benefit both the club and the sponsor.
“That tends to me to be the biggest change,” Mr Cook adds. “It’s not simply about signage rights and a few drinks in the box anymore. It’s offering relevant assets to the sponsors in order for them to improve their business.”
The club’s continuing business strategy still very much runs along the lines of Frank Costa’s maxim about character, and within this the identifying of competitive advantages to bring the best out of a club.
“We think it’s not necessarily about talent here anymore,” Mr Cook explains. “I mean, you need to have enough talent, but it’s supposed to be equalised, so if it is equalised, we’ve got to find other things.”
For Geelong this means finding great people with good talent and values, having great leadership based on humility, resilience and aligning people to a shared mission and vision, looking after stakeholders and collaborating internally.
“There’s the great culture that we think we’ve developed, or are trying to develop, and finally, we always have what we think is a very good plan. They’re the things that we really concentrate on.”
The main thread running through all of these areas of development is values, which is one of the most important elements the club considers in all of its dealings, making sure it has the right people with the right values.
On top of values, the club looks to take advantage of its place in Geelong as the league’s only regional club, making sure the entire city is engaged with the club and the team to help breed success both on and off the field.
“Our mission is a lot different I think to some other sports clubs,” Mr Cook concludes. “We try and add layers to our mission, like community work, so that we actually mean more to the community at the end of the day. It’s a good way of attracting a lot more people.”
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Written by Nicholas Paul Griffin.