John Grabowski: KSI, Andy Carroll, & The Dagenham & Redbridge Revival (Ep115)

14:43Andy Carroll:Totally. A third of our total revenue comes from the bar. A third of our total revenue comes from the bar. We host 250 events a year that are not football matches. Okay, that's good. Those are things like birthdays, weddings, funerals, council meetings. We are open for business. We are a community asset in the truest sense. And some places talk, oh, we're a football club. We got to be part of the community. Like we really are. We had a NHS blood drive there last week. Like that's the role that we play. We've got a big parking lot. We were open 365 days a year. You can get a beer there on Christmas.

15:20Andy Carroll:We host a warm room group. So that's just people in the winter who might otherwise get exposure and chance to socialize and interact with people. They come in for tea and coffee and a chat to talk about sporting memories, which at Dagenham is a good thing to talk about, as most of our greatest moments are from the past.

15:38John Grabowski:Okay, so you lose$1.6 million, but what are you turning over? What's revenue?

15:42Andy Carroll:So total revenue is call one and a half. will make about 500 from the bar and another sort of 400 from tickets, from season tickets and match day ticket sales. And then everything else is ad hoc.

15:54John Grabowski:Okay, so talk us through, because we didn't like get to that moment where you go, right, this is the one then. You see all of this, you're looking at the business model, you're looking at the history of a club, the successes it's had in the past and the challenges that it faces now. As I said, like from an investment perspective, there's a lot to like about that, but there's also a lot of work to do. So at what point do you go, yeah, right, this is the one we've been looking for a while, oh, we've got this money. This is the club that we're going to put our investment behind.

16:19Andy Carroll:I met the owners, the then owners, and had this sort of plan and project in place. They were US-based, US ownership group. And I was based here. So I was kind of like, I'll be the man on the ground. Really, it kind of fit together pretty quickly. I think when things make sense, they often do. I think what I was looking to bring, what the club already offered, what we just talked about about the opportunity that it represented and then the the current owner's kind of willingness to invite me in to play this sort of leadership role then it all sort of landed it landed quite quickly and like i said i went to a game um i went to another game i went to three games conveniently they didn't lose any of them that always helps always helps

17:01John Grabowski:um so you're saying you the you're the good luck charm well and then you're in the mascot suit

17:06Andy Carroll:I have taken a drum and banged it in the stands. Like, I was a mascot in high school. Like, it is not beneath me to do what is necessary to cheer for this football club. So that all kind of comes together. And like I said, it just sort of makes sense.

17:23John Grabowski:What did you buy it for? Is that public? No. I was always a first. But, okay, so in the context, can you just explain for us then the context of, like, the price of a club in the sixth era of English football versus the other types of assets you were looking at? Was it about the same?

17:40Andy Carroll:So every one talk, because these are all loss-making entities, when people are valuing football clubs,

17:45KSI:they typically always just talk about multiples on revenue. Is that one and a half?

17:48Andy Carroll:Yeah, between one and a half and seven, maybe is probably the loftiest I've heard.

17:52John Grabowski:You've heard 7x revenue? I've heard that. Are you serious? I don't know if they got it, but that was maybe the ask. LAFC? In the UK, I mean, yeah, US. I mean, yeah. don't yeah premier league maybe you can get a few up there but certainly in like football league championship and below that's incredible wow okay about one two three four okay that's kind of the i like what you've done there you've kind of protected you you've stopped us from being able to work out what you paid for it there by going like one and a half two three four yeah basically it could have been i'm gonna put money on 2.3 you need 2.3 yeah i think i yeah i would say about 2.5

18:26Andy Carroll:but who knows hey look this is it and anyone watching me we talked about so we talked let's just talk about talking about money for a second because i think it matters um we when we met you kind of made the comment no one wants to talk about money and i'm kind of like what's sort of a british thing the americans are always willing to talk about money you get into a room it's like what do you make how'd you do last year how much you're paying in taxes how can i pay less like that's the line of conversation um whereas in the uk it's very much not that and in the context of sort of investing in football clubs, it is a little cagey.

19:02Andy Carroll:And why is that? Well, I think I've worked it out. It's a competitive disadvantage to for the world to know your club's finances. It becomes a stick in which they beat you with. Why? Because if your budget is this and your performance is not. So if your budget is really high and your performance is mediocre, then the manager's getting stick because the world knows your budget this and you're not performing well enough. Or if your budget is small, then the owners are getting stick because why aren't you investing in the club? And there's no insulation. There's no safe harbor in that conversation.

19:39Andy Carroll:And then also players show up, hey, we're trying to get a good deal for a player. And now they hear, oh, the budget's this and that person's on that. And now we're negotiating against ourselves trying to sign players. So it creates a rod for your own back. I said, you know, a stick that you get beaten with by the public, a difficult point of information in a data point in a negotiation. So there's reasons to protect that information. But I think sharing the revenue numbers is also one, if someone's like properly financially literate, they can jump on and see our accounts on companies house and work most of what I just shared with you out themselves.

20:14Andy Carroll:But two, I think that's a friendly reminder of the realities in which we're in. And, you know, and again, if we come on to talk about wider issues in football or just the football ecosystem at the whole, it's account season and everyone's filing. So everyone knows what everyone made. And 24, 25 and, you know, smart people and great commenters in the space and the Swiss Ramble are kind of going through and making the point that look at all the money that all these clubs at every level are losing. And we sort of question, oh, is football doomed? Is that the bubble that's going to burst? are all these poorly run businesses.

20:49Andy Carroll:And I think the bone of contention to the point that is a worthwhile dialogue, I don't think football is a struggling business. I think the interest, the demand, the appetite all suggest the contrary. Player wages, really valid question to ask. And why are they high? How do you protect that? What is the outcome of this over a long enough term? all these players kind of taking so much money out of the game perhaps it's not one that i think should really affect us intimately because the level that we're at and the way that we insulate ourselves the way that we is by being i think upfront and honest and be like this is the reality we're a club at this level this is what we make you're a player who's playing at this level like and sort of level set expectations in a much more proactive way do you pay play like is it

21:39KSI:fully pro?

21:40Andy Carroll:We're a full-time professional team. The way in which pro is determined is down to effectively the step five. So step five, which is the ninth tier of the English football pyramid, is the first tier that's actually considered amateur. Anything above that. Now, you can still be playing amateur football and get paid, but it's deemed amateur. Anything above the step five, as we call it in non-league, is considered professional. And then the question is whether full-time or part-time. So in the National League South, the league that we're in currently, last year I think there was about seven or eight full-time teams.

22:19Andy Carroll:I think now that number is probably up closer to sort of 12 full-time teams. So that means training in a normal week, Monday, Tuesday, Thursday, Friday, match day, Saturday. and so the players typically would get off on a Sunday and a Wednesday and so that's a full-time program whereas a part-time team probably trains twice a week and I'm so sorry players are getting paid like 40 to 50 around a year it ranges but that's the sort of ball I'm genuinely not prying I'm super intrigued some less some some some make less a lot of you know younger players to live at home I think catchment area is a really important thing housing players is another thing that clubs have to do to get players to come, oh, we'll pay you this, which is maybe a modest salary, but we'll also give you somewhere to live.

23:10Andy Carroll:And clubs in other parts of the country that maybe don't have the same sort of catchment area have to do that quite often. I think catchment area needs to be an advantage of ours. 260 ,000 people live within three miles of the stadium. So we can't sign overseas players. And that's not a footballing rule. That's a home office rule.

23:29KSI:Oh, wow.

23:30Andy Carroll:You don't pass the labor market test if you are trying to come in and play non-league football. The country believes that there's enough footballers with British passports to fill out every team in the non-league.

23:40John Grabowski:On the money side of it, I hear you, but you made this investment. You must believe there's a good business here for you and your investors. You must believe there's a chance to make money.

23:49Andy Carroll:I think there's a chance to add value and you don't have to squint that hard to see it. If we can, we're a football club. If we do everything wrong, a thousand people still turn up on Saturday. Now, I'm trying to create a world in which we aren't doing everything wrong. We actually start doing things well and even maybe better, maybe excellent. And in that world, more people come. Every ticket sold is all upside, margin straight to the bottom line. We fill that stadium up with more people. And every increment more brings more audience, more atmosphere. The atmosphere then turns out onto the pitch.

24:30Andy Carroll:We win games. The team travels. The pubs around the stadium get more traffic. The cafes sell more bacon rolls. Like, we can be a driving force. And I'd say the upward mobility of the neighborhood might be a little bit grandiose. But in a place like Dagenham, I think that that is the ambition. And I don't think it's out of the question.

24:51KSI:What do we need to actually do to make that happen? That all sounds great. But is it just performance on the pitch? We win games and that happens?

24:57Andy Carroll:So, and this will kind of move our conversation along a little. I think it's two things. Got to keep the main thing the main thing. And that's the stat. We talk about numbers. We talk about money. The stat that matters the most is three points on a Saturday or a Tuesday night. And if we can do that, yes, a lot of the good that we all imagine follows. But the other thing is bringing new fans to the stadium. We don't exist for another 25 or 50 years if we are not able to attract new fans. And I don't think just winning football games is enough. I think we need to be very proactive in inviting people and getting new people to come to Victoria Road.

25:37Andy Carroll:And when they come to Victoria Road, we want to make sure they have a great time and they come back. And if they come back twice, then maybe they come back a third time. And if they come back three times, then I think we have a chance of selling them a season ticket. But in that story, they build a connection, come to a stadium before the age of 14, 95 % conversion rate, you become a fan for life. We need to be using those numbers in our advantage. Barking and Dagenham is the youngest of all London boroughs from a demographics perspective. There are a ton of young kids that we have the chance to invite in and become Daggers fans who will then help us live that story.

26:13Andy Carroll:It then stops becoming numbers on a page, but it becomes young, excited, vibrant people in the stadium cheering for hopefully a successful football team. And that mix, that's if we can do half of what I just described, I'm also confident we can add enterprise value.

26:29John Grabowski:And a big reason like this, you made a massive splash, right? Tell us who you kind of got involved.

26:33Andy Carroll:So KSI, global YouTube celebrity boxer, the musician, the ultimate multi-hyphenate, has joined the club as a shareholder and strategic partner. And among many of the things that he can do for the club, help us attract new audience and new fans is right up there near the top of it.

26:57John Grabowski:Okay. I'd imagine KSI gets pitched a lot of opportunities. And I would imagine this is not the first opportunity he's had to get involved in a football club. So for you sitting on one side of the table going, I absolutely appreciate that there's massive opportunity here, but I want this to be much more than just a marketing tool. To him going, this is actually a standout opportunity and different to the other stuff I've seen that I now I want to get involved in. Talk us through those two things and how you actually get this deal done.

27:23Andy Carroll:Yeah, so I think the starting point is he loves football. He is truly passionate about the game. It's part of his own story from early YouTube videos playing FIFA, the road to Division I, which was something that was played on with the announcement. So getting involved in football, you're absolutely right, is something that I think he's looked at for a while, but was obviously looking for sort of the right opportunity and probably also the right time. He talks about the project from first introduction as long-term and what can be built here. I think he views this probably as part of a legacy and a long-term thing that he can build and create.

28:09Andy Carroll:Speaking less about KSI and just generally about influencers and content creators and their own business models, it's very time-intensive. Like you have to be doing something, whether it's filming or traveling and the opportunity to get involved and build businesses that can sort of outlive your own time commitments, I think is interesting. And football in the platform that it can be, you know, we're a bar restaurant, we're a e-com business, we're a merchandise, we're a brand and we play football games and we fill a stadium. So we're all those things that can be always on. maybe it was a timing thing you know it was the club did you see on day one a dramatic increase the minute that it was announced so yes but not nearly as way it was uh reported there was some fake news some like ai clout farming out there that suggested that we sold uh three million pounds worth of shirts um that would be 78 000 shirts uh at the price that we sell them for and i certainly don't know where we could have stored them um so that is to fully debunk that um does Is that not good fake news?

29:20Andy Carroll:That was good fake news. Unfortunately, I thought we did well. There was a lot of really exciting things that came off the back of the announcement. But then I was then suddenly compared to this fake news story. Everyone thought we just had three million getting wired to the account.

29:35KSI:What was the most meaningful metric that moved on the back of it? Attendance. I'll keep coming back to it. What went from to what?

29:43Andy Carroll:Everything gets easier if we put an extra 800 people in the stadium. um so is that what happened so on the match that before jj's first match um we did maybe i think it was 1400 people were there um maybe 1400 at a push because standard practice across the industry you count every season ticket whether they turn up or not because you've saved the seat for them and that's kind of a given so if there were 1400 announced maybe if there's a better part of a thousand or eleven hundred in the building um the match before one week before and then the first one with him we had uh 2400 so about a thousand reported thousand person increase over over you know what's that sixty percent six percent up on where we would have otherwise been without him and that translates to all the other the other things and then the match after that similar really a little bit of a drop when people didn't think he would turn up and then we were up over 2000 again we've had apart from boxing day we've had our four highest attended games of the season

30:48KSI:since he's been so you are seeing retention yeah even without him being there you think that will

30:54Andy Carroll:stay a lot i think a lot of the people that are coming um were like keen to be invited back you know they were like late latent uh dagenham fans who probably remembered the good old days but have been like, what a drag. I don't, I'm not going to, you know, go back there. You know, they haven't had a winning season in a little while. So, but they have that in them. They are fans. They remember Wembley finals and, you know, you know, promotion finals. And when now we give them a reason to come back, which JJ does in so many ways, let's just see how, what this looks like. Oh, this is fun. There's a vibe.

31:32Andy Carroll:There's an atmosphere. There's more songs and chanting. Actually, the Guinness pour is pretty well here and it's pretty well priced. Oh, they've got a new chicken shop in addition to the burger van. And oh, OK, I can come back here. It's a decent little day out. What does the deal look like with KSI then? He buys into the club. So he's a minority shareholder in the club and has commitments to support, which he kind of manages and governs himself. I shared with you kind of before. he is very generous is probably the wrong word because he's not doing it out of the goodness of his heart he's emotionally bought in so he's coming to the games, he's streaming from the games he's filming a documentary which will then be put out on his own YouTube channel immediately ton of new audience and reach that will be generated from that, that's been in production since before he was announced so all of these things create new opportunities for us as a club okay so commercial side of that

32:38John Grabowski:tell us what that does for you looking at building the revenue streams that you know can be improved to move that needle because what he can do is he can bring that eyeball which means that you can sit there and go from a data perspective we've got great reach now well i tell you what it does

32:52Andy Carroll:it increases the pressure you know the world assumes that oh this is a layup now you've got KSI involved and you guys are just going to kill it. You're going to unlock all these, you know, commercial opportunities. You're gonna make tons of money. Everyone assumes that we're now flush with cash, which again, as a reminder of what we already went through, we're a non-league football club and we need to be kind of grounded in our own realities. So, and that's a little bit of a flippant response, but we have so much work to do. We have so much work to do. There was another, I was talking to a chairman at another football club at our level they do 3x the sponsorship revenue that we do and they're just a normal

33:30KSI:club at our level so we're not even a sponsorship revenue being shirt sponsor alone side sponsor

33:35Andy Carroll:what does that look like totally it's uh it's sort of a mix of the the obvious assets shirts

33:42KSI:front back do you have a shirt sponsor today we do how much is the shirt sponsor i won't share What they do bring is an incredible credibility and connection to the community.

33:56Andy Carroll:Our shirt sponsor is West & Co. They're the oldest company in Dagenham. They're still family owned. Jeremy West is a luminary in the community. And what they bring, beyond just being financial, is sort of this very meaningful and obvious connection between the club and the community. They're a funeral service provider. They are, which draws a wry smile from people. And I think there's this tendency to be like, oh my gosh, what's the funeral service doing sponsoring a football club? But people know their business at their times of greatest need and loss. And so when I say there's this real connection, I mean it.

34:37Andy Carroll:So that's our furniture. But actually, I think the bigger upside is a lot of the sort of smaller always on deals. So match day sponsorships. You have an individual sponsor for every match. you often have a ball sponsor for every match um so there's a ton of active selling that needs to take place do you have a sales team to do that we have a sales person okay um and myself you know i was brought in to be the kind of commercial lead and um and admittedly a lot of what you know i talked at the beginning about the levels in which you operate um those partners are largely local community businesses.

35:14Andy Carroll:And it's either a big day out, whether it's employee entertainment or putting something on for a big client. And that's why they come to Dagenham. They're local, they know about it. It's kind of a nice thing to do. Yeah, we don't have a ton of multinationals coming down and sponsoring a match at Dagenham at Redbridge.

35:30John Grabowski:But you're not necessarily looking for that right now, right? You're looking to move that needle just about enough so that you can start incrementally improving those numbers. You don't need to go from 50 to 500 on day one. You need start building a proposition that people want to invest in. And that's the thing that when I hear

35:45Andy Carroll:what some of the other clubs have done from a revenue perspective, it seems like others do better than us. So that alone is an area of improvement within the day-to-day set of responsibilities. That's before we talk about what KSI can bring and the additional media reach and eyeballs and audience that also comes from it.

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37:01Andy Carroll:involved in the club andy is you know andy was came on board last summer um as a footballer um he he's got family his family are all local really to to the club and and essex and was looking for an opportunity to be home be closer to his kids be closer to his family um because and he'll tell you first that's you know it's a priority for him and when it was kind of made uh when we were informed of sort of the opportunities that he was open to considering. Our manager at the time, Lee Bravery, said, hey, John, you should, you and Andy should meet. So we met last summer and Andy kind of went a step further than just saying he wants to play football locally.

37:42Andy Carroll:He wanted to invest in the club and be a stakeholder going forward, which changes the initial conversation when you're looking at, you know, the world thinks, oh, you brought in this big signature striker. And, you know, we certainly feel we have. but that they're willing to kind of put money where their mouth is in a way that maybe not all athletes are always open to. And that he was willing to do that from conversation one showed kind of the commitment that he wanted to make to the club at the time, which he's only doubled down on. So now, although Andy has been out for a bit of an extended period with injury, when he was fit, he was incredible at this level.

38:23Andy Carroll:I think it was seven goals and a couple assists in 11 games. But since he's been out with injury, he's also taken over as our interim manager. Wow. Andy Carroll. You're sweating him. We're sweating him. On the bench. We're on the board of the AC Express right now.

38:39KSI:You're really getting your money's worth from Andy, huh?

38:41Andy Carroll:I think he said when we first met last summer that around the investment and becoming a shareholder in the project, didn't see himself as a manager. He knows he's going to be involved in football all his life, but he didn't see himself as a manager. And that's fine. His network, his relationships, his experience, there's a lot of different ways that we knew he could contribute. But as the season's gone on, getting to know the group, the team, in the dressing room, I think he sort of had this itch that if there was an opportunity before he would see it just go from one manager to the next, let me see what I can add and contribute.

39:18Andy Carroll:And so when we made the decision to move on from our manager, thinking about how do we get through the rest of the season, not wanting to feel rushed to kind of put someone back in that position, not wanting to make the wrong decision. Andy kind of stepped up and said, let me take the group.

39:36KSI:You've been through a couple of managers. You mentioned downstairs you've had a couple of birthdays where you've had calls replacing managers. What do you know now about replacing managers that you wish you'd known when you started?

39:48Andy Carroll:I say as often as I can, if I have a successful career at Dagenham and in football generally, I'll never make a football decision. There are a lot of people that know more about it than me. And all you'll have to do is watch the World Cup this summer. And there'll be 40 ,000 people that know, you know, who should be the choice that Thomas Tuchel makes coming off the bench in the 80th minute of a nil-nil game. And every one of those people knows better than him. 40 million people. Yeah. And then the rest. I try to be as removed around the sporting side of that decision and as connected to the personal and professional side as I can be.

40:30Andy Carroll:If we're making that decision, it's obviously a difficult thing. It's a difficult moment for – it's a difficult decision for the club to make. Someone said to me, the most expensive thing you can do is change your manager because you're not just changing one person. And then they have, they come with their own ideas or team, sometimes back office, often on the pitch. And so it's not a decision that you can make lightly, despite what we tend to see at different levels of the game.

40:52KSI:Okay. Play this one out for me.

40:53Andy Carroll:How do you, how do you do it?

40:55KSI:Bring, bring, bring, bring.

40:58Andy Carroll:So I've, I've, I've only had to have that conversation one time and I made sure I had it in person.

41:03KSI:Okay.

41:04Andy Carroll:So it's not a bring, bring. It's like, can we have a coffee? And at that point they know what's coming. It's not nice. Can we go for a walk? I like a walk to talk.

41:15John Grabowski:I like it because then I didn't have to look.

41:16KSI:Oh, yeah. You can look down. A little confrontation avoidance.

41:20John Grabowski:Well, I love that and it sounds great in theory. Is it possible? Are you able to actually separate yourself from those decisions?

41:27Andy Carroll:I do a decent job of it because there's so much work to do.

41:30John Grabowski:So who is doing it instead?

41:33Andy Carroll:And should it be you as the leader of the organization? I, well, I know my point of view is, which is no, but, um, my job as a leader of the organization is to make sure we have capable, talented, competent people empowered in positions to make those decisions. Um, and, and maybe it's easier said than done, but I think if you tell someone, this is your responsibility, this decision is yours, they, they either accept it or they're not the right person for the job so um yeah i i try to be pretty pretty fiercely removed from that as best i can be there's no shortage of things for me to do to fill my day and for what it's worth if i'm getting bogged down in a conversation about should we sign this person or this person or this meal it's kind of like hey guys you know what the budget is do your best what's the worst

42:24KSI:decision you've made since taking charge oh gosh um maybe coming on this podcast

42:31Andy Carroll:yeah questions around pricing often come up um pricing in pricing increases very sensitive we've gone the other way we actually reduced the prices our season tickets last year in a relegation year and then we've frozen those prices this year i think what does it cost um oh no one pays full price tell you that you know concessions students juniors uh you know all these different levels A few hundred quid? Yeah. So right now we're running a loyalty pre-sale, and I think you can get a season ticket for like$240. Then that goes up to like$265, and then that's the early bird pricing, and then you've got your full price.

43:07Andy Carroll:Now, if you're paying a full price for our season ticket, it means you've just found out about the club in August, and you're like, let me get on board, and all the power to you. Great. I'm thrilled to have you, and next season you'll get a discount for signing up early. So a lot of games are you getting. We haven't made those increases. is maybe some of my, maybe the worst decisions I'm making are not cashing in more on the heat moments. I didn't order enough shirts. What? I didn't order enough shirts. So this is the worst decision I've made. This is the worst decision I've made. So we introduced a new, so you buy a football club.

43:46Andy Carroll:What's the deal everyone wants to do? You want to do a new shirt deal. Like you want your team to look a certain way. You want to do a new shirt deal. So run a little process last January. It's already pretty late to be designing new shirts. But we had to deal with Admiral, which was fine. But there wasn't a ton of commercial value associated with it. They basically gave us a very great price to buy kit. And we bought kit. We bought kit for the players. And we bought kit for the shop. And that's fine. That's the way a lot of clubs work. I was like, we can do better. Let's see what we can push.

44:19Andy Carroll:So ran a little bit of a process, got some offers, did a new deal with Kitlocker. So Kitlocker owned the sub-license for a number of brands. One of them is Umbro. Again, if you want to talk about tough businesses, sports apparel. So Umbro really are just a brand nowadays. They're owned by Castore. Castore only want to service clubs at the Premier League and some at the championship. But if you want to wear Umbro, they'll then give that license to certain levels of the pyramid to, in this case, kit locker. And I like Umbro for all the reasons that we all do. Heritage, British brand, chance to change, change it up.

45:01Andy Carroll:And we then also redesigned a, not a throwback, but definitely a retro style kit. So, collar, you know, can't to not pop the collar kind of energy. Red and white vertical stripe. I figure if Barcelona can do it, you know, it's good enough for them. It can be good enough for Dagenham. So a red and white vertical stripe, thick with a little white pinstripe and a collar. And we're feeling pretty good about this design. We're like, this is going to be cool. And then we sign Andy. And I've got one sample of the shirt. And we're like, well, we have to, when we announce Andy, we have to, he's got to be wearing the shirt.

45:37Andy Carroll:So we get him in the shirt, which is the sample, which was a slightly different color blue. We slightly darkened the blue in the finals. but we knew we were doing that. So we had to then kind of color mask the color slightly so that when we, the announcement video reflected the jersey correctly. So we announced this jersey and we've put in the order for our shirts. Now I'm the American commercial guy, you know, and I don't want to come in and totally overcook it and say, oh, we're going to order, you know, 5 ,000 shirts. But I felt we were going to do better than the year before. so i was like we'll just order the same amount as last year so i can't be faulted for over ordering and having a ton of stock left on the shelves how much shorter um and we ordered the exact same amount which is basically round numbers like a thousand shirts we sold we announced with andy we got the shirts in in july we sold out by august reorder so we order another basically What's the lead time?

46:34KSI:12 to 14 weeks.

46:36Andy Carroll:So we then get the others in October. And now we sell out again by Christmas. The story gets worse. We'll keep going. As we've just been talking about. We then announce KSI three months later. I've got no shirts. The whole world would buy a Dagenham shirt that would have otherwise not prepared to, you know, six weeks ago. And we're, so we're waiting. And you legit have no shirts? We have no shirts. We have, for anyone listening, we have a small selection of junior shirts in the home kit and that's it. So if you're under 12, you're in luck

47:11KSI:listening to the business of sport. Oh my god.

47:14Andy Carroll:That must hurt. That hurts. And anyone that works in retail and e-com knows that death knell is a high supply. I mean, you've lost 100 grand there. Probably. That's the worst decision I've made. Not being aggressive enough early enough.

47:30John Grabowski:You said just before that, I think that's a good answer.

47:35Andy Carroll:That is a good answer because we can all agree with that.

47:38John Grabowski:But also just before that, I think you were kind of pushed into that position where you're trying to think of an answer and you did say cashing in is maybe a mistake. And I will vehemently disagree with you. I think you not doing that is good. That may have helped you in the short term and it may have moved a little bit of that needle. But you know what it's like in football. You jack up the prices because suddenly something happens. The fans feel taken for granted.

47:57Andy Carroll:That's it.

47:58John Grabowski:You're not doing anything for your long term.

48:00Andy Carroll:Totally. And I say this and we have to mean it and we have to kind of revisit it is we need to bring everyone on the journey with us. No part of what we just talked about and the opportunity that we believe we have gets easier by alienating existing fans. This is all about adding on top of, not changing or moving away from. And price is such a sensitive way in which to do and not do that. And so, you know, there were some questions about going that way, reducing the price last season the way that we did, freezing it this season. At the time we made the decision to freeze it, there was still admittedly outside chance of promotion.

48:36Andy Carroll:But we're like, this is the prices and a great way to tell all of our existing fans, hey, we've just, you know, announced KSI. We've got the BBC and Good Morning Britain coming down here and all this other attention and fanfare. but we're going to lock in the ticket prices for all of you, especially those of you who've been here last year, our existing season ticket holders, get an additional 10 % discount off of the new price because they're already here and they should be rewarded accordingly. Yeah.

49:06John Grabowski:Okay. So for all of this, we're still a football club, right? And we all know that a great way to build value into a football club is to win. It's not everything, but it is to win. So when you're looking at performance in this model and this plan, and we're now getting to the part where fans obviously are the most passionate. What's the plan? How are you looking at improving the performance?

49:25Andy Carroll:So last summer when the then current owners chose to sell the club, we had been relegated, we changed managers, you're dropping down at levels, so sort of expectations for our wage structures change a little. Last summer sort of lent itself to effectively a full rebuild. now this season despite getting off to a slow start we won only one of our first 11 games in the last 30 games were actually playoff form and in and there was an image i saw i don't know if it's the case after the easter weekend but prior to where we were in top three in the last 15 So we do believe that there's talent in the building and the job now with the team that has football decision making responsibilities is to tweak, evolve and improve.

50:22Andy Carroll:The other thing that's so often easily forgotten is the upheaval that goes around around just changing people all the time. And so we brought in 16 new players last year. we then talk about, oh, woe is me. We only won one of our first 11 games, but we've got a full new team. It would be wrong to expect them to be excellent from day one. So I think we have to bring a culture of support and stability in football that's probably easier said than done. Well, it's often not even said, but I actually think that there are footballing returns that come from that sort of consistency, see, whether that's in the dressing room, but also all the way from the touchline up to the boardroom and having that structure in place.

51:07Andy Carroll:You know, obviously the change in ownership doesn't affect whether we score a goal on the weekend or not, but it does in other ways affect people's commitment. Am I going to be here next year? Am I going to be like, where are we at? And so I think structure, stability, and then a culture of constant improvement, 1 % better every day. We say that, but I think I can mean it because I know there's so many ways to get better. and if we can do all those things on and off the pitch i do think we win more football games and i also know that there's people in the building who all have the ability to be certainly competitive

51:40John Grabowski:and potentially excellent at this level how have you found your relationship with the fans and by extension working in a business where you are the owner technically but really all fan bases know the community is the real owner that's how they feel at least so you have to balance that yeah i

51:58Andy Carroll:I think I get a lot of credit for turning up for work. I think that goes a long way. I'm at the club four, five, sometimes six days a week. And what I've said, I mean, you know, recently it was announced that I've been appointed as a CEO, but the job doesn't change. What I try to do is just be helpful and useful every day. So some days that is renegotiating a commercial deal and others that is resetting the Wi-Fi router on the far side of the stadium. And that's honest. Like that's how you have to operate not to be successful, just to exist at an organization like this because it is that sort of grassroots.

52:39Andy Carroll:But I think – How big is the team? So there's a couple different ways to ask that question. At the highest end, there's probably about 100 and 110 people who are on payroll. But we probably only have, call it 12, like full-time staff. So about six on the footballing side, six in the office or the admin side. That includes an operations manager who kind of runs all the bars. Then we have a ton of shift workers who are bar staff, stewards, cleaners, gate men, security. I guess that's the stewards. So a ton of people that sort of work match days, work shifts. And then we have 26 players at the moment.

53:25Andy Carroll:It's like a big business and a small business at the same time. It's not a big business.

53:29KSI:It's a small business, but it's a small business with a lot of moving parts.

53:31Andy Carroll:What do you know now that you wish you'd known when you bought the club? I think how hard it would be. You know, the challenges.

53:37KSI:And specifically what is so hard?

53:40Andy Carroll:It's, there's so much work to do. And I think if I could just get on with the work, you know, that'd be great because I'm certainly not allergic to work. And I think quite the opposite, you know, embrace it, but there'll be a challenge that comes up in the morning, whether it's on your phone before you get up or, or it lands in your inbox at, you know, five minutes past nine, which was a challenge that you weren't aware of yesterday. It wasn't an issue yesterday. And now today it is. And then that becomes the thing that takes your time and you then don't get to give your time to those other things that you had planned on.

54:13Andy Carroll:And so you feel like you're always chasing your tail a little bit. What I will say to kind of on the positive side of that question is I have a ton of confidence in our ability to be successful. Like despite sharing what I just did about how hard it is, the hard part is the management of it all. But I don't think anything that we've talked about is insurmountable or difficult or unachievable. And I feel very strongly the opposite. Like we have this opportunity in front of us and I think we have the people, the intention, the commitment to deliver on it. Okay.

54:44John Grabowski:I'm now going to move it into the thing that I do think is the biggest challenge. And that is maybe the thing that is insurmountable and unmovable because your ability to impact the wider system that you live in is absolutely crucial to your success. You can buy a football club and you can make all of these changes, but if you don't get more than six, 30 to 40 to 50 to 60 grand a year central from some form of media deal, it's very hard for you to actually move that needle enough to build this business. So I want to ground it in our great friend of the show, Spencer Owens, recent comments and what he's talked about where he has asked for hashtag United.

55:13John Grabowski:He has requested that hashtag United get relegated so they can recalibrate their cost base and spend in the right areas. And he cannot afford to do that, he believes, in the league that he is in now, which I think is the seventh or eighth.

55:24Andy Carroll:He's in the seventh here. So at the request of the relegation, we'll give them a double relegation back down to the ninth.

55:31John Grabowski:An extraordinary move, right? and it created a lot of discussion around what people thought around this. Just the reason why this is different at this level to explain for people. It's very simple. If you are in League One and you go to the championship, let's just use media alone, you're going to get an extra seven to 10 million quid a year, let's just say. So you getting promoted has a serious financial gain. When you go down to the seventh and the sixth and even if it's going down to the eighth, you go up a league and your cost base rises because you are increasing the player quality and there's demands around the club.

56:01John Grabowski:Maybe you need to hire a few more people But what you're not getting is improvement on the centralized revenue to help you cover that cost. So it's still all based on what you're doing. To me, that's a massive wider issue in the system, the structure, and really, like, football, this football pyramid as a whole that we will hold so dear and treasure, even down at that level where you can get 6 ,000 people in a stadium in the sixth tier.

56:23Andy Carroll:Yeah. So I think there's two parts to that. one I agree with completely and the other I would challenge a bit is when you're full up as a lot of league one sides are in the stadium I mean and you sort of feel like your fan base you've captured a large large group of your fan base and you move up from league one to the championship and then you can't really sweat your asset that much harder because now you're in the championship you've been full up since league one and now you're going up to the premier league and then Then you get this additional, let's call it what it is, worst team in the Premier League is making a million bucks just for turning up.

57:00Andy Carroll:So they get a million pounds central distributions from the media deal alone. And now you've got 100 million pounds that was otherwise unavailable to you at a time when you were maxing out your asset. And so then you lose that. You're like, I can't replace that. There's no other mechanism to replace that. Whereas I don't perceive that to be a problem for us right now because of the point I keep making and we've talked about is the attendance. Like our job to grow is to bring more people to Victoria Road. And if we can fill that building up with people, we can augment any, well, I would say deficit.

57:36Andy Carroll:It's not like we lost it, but just the gaps in media and central funding by having a 6 ,000-seat stadium. We can outperform our peers financially because we have a bigger stadium. Our job is to entertain people and play a brand of football that gets people in the door and make people aware and market the hell out of it to get people to come to Victoria Road because if we can do that, that becomes an asset which is unique to us. Really, us and Torquia are the only clubs at our level that have 6 ,000 seat stadiums. And we go up to the National League, there's still not a lot with the same sort of size.

58:08Andy Carroll:So we have a unique opportunity for a couple of leagues to increase our revenue over and above our peers. And I think that's our opportunity to smooth over some of those lumps and bumps. Okay, so that's the bit you disagreed on

58:26John Grabowski:and what I said is that you basically saying that, do you know what, no, actually, we are the masters of our own destiny and this is on us to do it. And regardless of what we get from Central, we're going to be the ones that are responsible for our success or failure. 100%. Okay, the bit you agreed with?

58:39Andy Carroll:The bit I agreed with was that once you get to a certain level, a championship club, they are beholden to the financial decisions, top-down Premier League distribution model, how money is distributed amongst the EFL. So they have a reason and a right to sort of shout outwardly and say, hey, we need a more equitable split because they know that they're doing the best they can and they're limited. They're capped on what they can receive centrally because they're already filling up their building.

59:09John Grabowski:So you know Spencer, right?

59:10Andy Carroll:I do. We're in discussions of potentially a pre-season friendly. Nice.

59:16John Grabowski:That'd be good. What do you think then from what he's doing, the issues that he highlights and let's say the course of action he's now taking, now you're an owner in a similar environment? I think there's more to it.

59:27Andy Carroll:I think the point about, give me the relegation, I think there are challenges, like I believe, and I don't know the details, but they just moved stadiums. They're now actually playing just up the road in Redbridge. I think if they won that league, based on the capacity of that stadium, they wouldn't be allowed to be promoted anyway. So there's sort of a lesser gain from being in the league because you can achieve ultimate success at that level, i.e. winning the league. And then you're not able to realize the dream, which is the promotion, because you're limited. You're capped by another thing outside of your control, which I believe in his case is the stadium.

1:00:06Andy Carroll:So I think without knowing the details, the double relegation gives them a chance to kind of get the house in order in other places so that they get another free run at it. How many times they've been promoted? What is it? Seven times in eight years or something to get to this point? So they can take another step back, regroup, and then go again with new infrastructure, which the new stadium move does for them.

1:00:27John Grabowski:Do you know what I noticed from these chats, which is interesting? If you're looking at the business models, going back to when you were talking about making money, really at the top of sport, let's say you have the list at media, commercial, attendance, merchandise. Let's use those four key pillars. Media for the biggest assets. Global sport always comes out top. then it would go commercial, then probably attendance, match day, hospitality, then merchandise. You go down to this level, it kind of completely flips on its head.

1:00:55KSI:Inverse.

1:00:56John Grabowski:Everything really you're talking about here is on how we fill that stadium. This isn't a nice to do because we've got that media money coming in everywhere. This is a core mover for our business. Then it's probably, you know, then it could be the merch opportunity, concessions.

1:01:12KSI:Bar shop, et cetera. When you said bar is a third of the revenue, it's like an F &B business, whereas for Chelsea, it's like three to five percent.

1:01:19Andy Carroll:Yeah. I have to sign up to get a license to be a bar operator. That's not I didn't have that in my bingo cards a couple of years ago. So you're spot on. And I think that's why, because of the things that we just talked about, all the different revenue streams, the one one of the ones you have the most control over is the attendance piece. And that's where I do believe we are captains of our own destiny. And then to bring it all the way back to where we started, you're looking at it from an investment perspective. I'm telling you that one of the biggest things that we can do to increase our margins and drive more revenue and grow the business is something that we still have control over.

1:01:54Andy Carroll:Because we're not sat here having a conversation debating the value of media rights. Which, if you're investing in the top tier of sports, whether it's in North America or Western Europe, the bet that has been made over the past few years is you believe the value of central distributions from the media deals will go up. And on that basis, all you have to do is keep the doors open and you will get access to a larger share of a growing number. A lot of people that think about this a lot are challenging that assumption, rightly so. We're not in that conversation right now. So if you want to invest in sport and you want to invest in sport where you believe you can affect change and grow value, non-league, baby.

1:02:34Andy Carroll:Like, we create that opportunity. Do you think the private equityization of sport is a good thing? I think it's hard to say it's a good thing. I don't think it's a bad thing. I think it's just sort of an inevitability. It's super easy to like paint the sort of faceless PE fund as this villain. And the plight of my football club is tied to this other thing that I can't sort of name or touch or point to that only exists on a company registration in Delaware. So it's easy to cast them as a villain. But I don't know if it's sort of, if it's either here nor there, right? Football clubs need capital.

1:03:16Andy Carroll:Capital allocators make decisions based on their own incentives, almost exclusively to make money. And if football clubs represent a good investment opportunity, money will go there. And if they don't, I think it will move on. I don't think the success of football depends on access to institutional capital being endless, because I think that there is a sort of special je ne sais quoi about this industry and this asset that will find wealthy individuals, whether they're individual benefactors that want to and will choose to fund this space.

1:03:53KSI:In three years time, what will your losses be?

1:03:57Andy Carroll:Over what period? Like annualized? Yeah, you said you lose about a million and a half years. We'll do better. We're going to do better. We're going to lose less money. Okay. But I also want you to spend more. We can do that too, I think.

1:04:08John Grabowski:Because if you're really going to do this, right, you're going to need to have moments where you invest. We use content teams. You're such a VC. I want you to spend more and make less.

1:04:16Andy Carroll:We'll lose less. I want to do that too.

1:04:18John Grabowski:But you're looking at this, like this is a project that you need to, and this is football's biggest challenge. Yeah, they know where to spend. They spend it all on the fucking pitch, right? Yeah. And if you're really going to change the business, yeah, of course, the pitch is always going to need it. but you also need to spend in the right areas behind we mentioned it from a content team perspective right you having this embarking on this project right now there is a massive opportunity and it's not just fucking replicate welcome to rexam right that's being done but there's your own unique story with your own unique talent with a performance guy like an andy carroll in there alongside an amazing brand like a ksi alongside you guys as a us own well you as someone from the us coming in and and having this kind of approach to how to develop a club you know that there's always a story but that will take investment probably your one content guy or girl yeah you know it's going to find that hard to do so my point is yes i'm sure like you want to make more money but also there's probably a recognition that we may in the early stages

1:05:16Andy Carroll:need to spend a bit more i don't expect to start kicking off huge profits but i also believe we can lose less because a lot of the commercial upside is front end you know new sponsorship deals come in typically at beginnings of seasons, season tickets get sold before the season begins. So we can, we can reset our budget before the, before a ball is kicked and say, actually, we could look like this. It does look like this. And I expect that to be higher than it was a year ago. And I talked about the pressure, like what changes is the pressure to deliver on that. Now that's my own expectation to a point, but I'm also, uh, I'm limited by the realities of what's hard about that.

1:05:59Andy Carroll:The outside world thinks that that's a given. So I know that we can make more money. We will make more money. And then a separate conversation will be, what is our appetite to lose? And I think it changes on how things are going on the pitch, right? Are you in a position, and we don't have a window, but January just remains a nice heuristic to talk about. Like, are you in a position in January to go for it and win this league, or is it a chance to consolidate and develop talent? So those questions, I think, get led by on-pitch performance in a way. My job, as I see it, is to make sure that we have the strongest and surest footing and foundation on which to make those decisions.

1:06:40KSI:Quick fire round. Who do you, in a dream world, most want to have as a shirt sponsor in three years? You can choose any brand.

1:06:48Andy Carroll:In a dream scenario, I'd love to be so successful you don't need a shirt sponsor, right? Those old Barca shirts. oh well it's what the nfl do yeah that to me that's clean that's commercial success for the barter shirts well the nfl is no brand on the front i think if you look at the brands that are on the fronts of shirts are the biggest clubs in europe it's not because they're aligned with their vision it's because they're willing to spend the most what do you take is there another sport

1:07:10John Grabowski:you take something from you think that they do unbelievably well that you could apply to football

1:07:14Andy Carroll:into the club in particular it's something around match day experience my head does go to u.s sport and what they do well around engaging fans around the game, around the stadium. We're not trying to turn Victoria Road and Dighton Redbridge into a tailgate party, but the ability to bring people in and create that sort of full event experience is something that we lack. Some football clubs are doing better than others. It looks like a Southport County. They've got food trucks and sort of festivalizing their parking lot before a game. other clubs do this better than us, but, you know, something around improving the individual match day experience, you know, maybe like U.S.

1:08:00Andy Carroll:college sport where you're sort of out, they're barbecuing, they're grilling, they're hanging, like it becomes what we've talked about,

1:08:06John Grabowski:which is a community thing. Okay. Yeah. But then also you have the challenge of it's anti-community in a way to some of the businesses and around the stand, because the more of the wallet you pull into the stadium around the game, the less of it, the pubs and the cafes that sit around the stadium. Totally. So it's the hard, It's always a really hard balance between the two.

1:08:22Andy Carroll:Come to Victoria Road and you'll realize that's not so much of a problem. I'll send Johnny. Yeah. We border an industrial estate on one side, which is closed on the weekends, and a park on the other, and then a residential street down the road. There is a series of cafes, and they do say that when the club is winning, they sell more bacon rolls. But it's less of a point of cannibalizing. It's more of the point because we give people something to come out to. Do you own your stadium? We own the building, but not the dirt. Explain that. So it's our stadium. We don't rent the stadium. If West Ham women's play in our stadium, they're a tenant of ours.

1:09:01Andy Carroll:We have a 10-year deal with them. But the council owned the freehold on the land. Do you have a women's team? We do not. Will you? If we do, it'll have to grow organically inside out. So youth football, mixed football, girls football, maybe the girls football team's pretty good at an under-16s level. Then they start playing under-18s. Now they're still pretty good. Can we give them an opportunity to start playing in professional leagues? I see that as the growth plan for women's football. I think we've got enough work to do to kind of top-down, insert a professional women's team into Dagenham and Redbridge right now.

1:09:36John Grabowski:What's the most surprising expense for a football club people don't know about?

1:09:42Andy Carroll:Someone, I think, answered this. They talked about window cleaning.

1:09:44John Grabowski:Yeah, it's on 300 grand Swansea spent on window cleaning.

1:09:49Andy Carroll:Maybe the phone bill? What? We spend more with like, I mean, you got a whole bunch of different lines. That one shocked me. I was like, really? A BT get that off us each year? It's not a big number, but it's a lot more than I expected. The phone bill.

1:10:01KSI:How much is it? Do you still have a landline?

1:10:02Andy Carroll:Yeah, we have like a bunch of landlines. Like a bunch of landlines. It's like upwards of 10K.

1:10:08KSI:You should use a company called Phonio.ai. They'll answer all the phones for you with AI, and you'll do like 90 % conversion on AI.

1:10:15Andy Carroll:Hey, I think what you're touching on here is the football club's ability to be a tech accelerator and tell these sorts of stories because we have so many things that we can get better at and use technology to improve and innovate like quickly. And our surface area to introduce new technology like that is actually relatively small. So our ability to use Fonio AI or any other of your portfolio companies quickly is real.

1:10:40KSI:Final one, what would have to happen this year for you to look back on it and think that was a fantastically successful year?

1:10:48Andy Carroll:Calendar year or financial year? Let's do calendar year. Calendar year. If we're sat here before Christmas, I don't think you'll have me on again that quickly. But if we're talking before Christmas and we've seen a meaningful jump in attendance, that to me is the needle. so if our average attendance is up over 2k 2200 average 2500 average um we're doing something's going well love that we'll do a business of sport day yeah we'll get you down match day sponsor i'll

1:11:21KSI:send them over get everyone along yeah yeah yeah why not get you amongst it get you amongst it me joy oh yeah you'll enjoy it you lost mid-industrial estate or park or whatever it

1:11:31Andy Carroll:opportunities opportunities all I hear is opportunities why do you think he supports Chelsea or Fulham or Fulham either one which is the only time you can support too it's been such a pleasure thank you so much for doing this thank you for having me on yeah long time listener first time caller so great to uh great to be able to do that seat thank you so much to John for joining

1:11:56John Grabowski:I don't know about you but the section where he explained why he thinks football clubs are not advantage by disclosing too much about their financial information was super interesting and made a lot of sense. Yes much of it is made public in accounts but giving more of a narrative does perhaps make them vulnerable. I guess we'll have to think of a new show then. I hope you enjoyed it today and I look forward to seeing you next week. Now if you want to see more from today's show you can do so by going to YouTube or any of our other social channels across Instagram and TikTok. There are more snippets to share and bite-sized chunks to consume and whilst you're there please do like subscribe and follow the show as you will hear from your other favorite pods it makes a huge difference when bringing you the best guests and conversations from the world of sport which is of course our endless aim thank you again for tuning in and we'll see you next week 25 years ago money ball revolutionized baseball then football sporting directors learned the collect more data lesson and now mission accomplished clubs have 60 times more information than they did then but here's what nobody talks about.

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