August 31, 2004 3:00 am

Pure theatre on and off the football pitch

There are some things money cannot buy. Not just love and happiness, but football clubs too. That is the view of Paul Gregg, the entertainment multi-millionaire at the centre of a boardroom battle at Everton. "I did not register [when I took a stake in Everton] that a football club is a business you might own, but which never belongs to you," he says, speaking at his headquarters in Oxford. "You will always have half a million people - the fans - telling you how to run it, and who live and breathe its success or failure."

The unsolicited advice from supporters has become deafening in recent weeks, as Mr Gregg has struggled to oust Bill Kenwright, a theatre impresario, as chairman. The move, Mr Gregg has claimed, has been vital to engineer a much-needed £15m cash injection from new investors.

Winning the sympathy of Scousers was always going to be a struggle for Mr Gregg. Aged 63, he is a low-profile Yorkshireman who had little interest in football until he bought a stake in Everton and a seat on the board in 2000. The fight has been made harder because his opponent is a Merseysider. Mr Kenwright is an obsessive Everton supporter and a former star of Coronation Street.

"The fans say 'you did not watch this or that game', that 'you are only interested in getting your investment back', and that 'you have never been interested in Everton like we Evertonians are'," grumbles Mr Gregg.

Initially disappointed by the criticism, he has since mellowed. "When you get to know the fans, you realise that if you are involved in Everton, you are involved in their lives," he explains. "Last week, I had a letter from one lady saying: 'For Christ's sake, sort this out because my old man is waking up in the middle of the night and pacing the bedroom over it.' "

Mr Gregg can offer little comfort to the insomniac fan of the Toffee Men, as Everton's footballers are popularly known. For the moment, the fight has gone out of the entrepreneur. He and Nita, his wife, own about 32 per cent of True Blue, a holding company with a 71 per cent stake in Everton. That is "marginally" more than Mr Kenwright. But the voting system means that Mr Kenwright is able to call the shots, provided he has the support of one other True Blue director. Jon Woods, who is also an Everton director alongside Mr Kenwright and Mr Gregg, has proved a stalwart ally of the ex-actor.

Mr Gregg admits that there is nothing more he can do. But he remains hopeful that new management will take over Everton and revive its fortunes by turning it from what he currently thinks is a hobby business into a commercial company.

So far, with the indebted club finishing a feeble 17th in last year's Premiership, Mr Gregg has received what he calls "a kick in the stomach for our seven-and-a-half million quid". But he finds it difficult to believe that new financiers - even those with whom Mr Kenwright is discussing a £20m cash injection - will be ready to invest without demanding a controlling stake and the dissolution of True Blue.

If that happens, Everton could become a viable business, perhaps through the stadium-sharing agreement with Liverpool Football Club that Mr Gregg believes is "the only way forward for Everton". Negotiations are, he believes, continuing with foreign investors, even though Russian oligarch Boris Zingarevich, and his son Anton, are probably out of the frame.

The frustration for Mr Gregg is that until their involvement with Everton, he and his wife had proved pretty good at reviving underperforming businesses. In 1999, that knack had earned them £129m, the price SFX Entertainment paid for Apollo Leisure, their theatres business.

The Greggs had begun with just one theatre in Ardwick, Manchester, in the mid 1970s. They traded this up into a chain of 27 theatres - the largest in the UK, which includes the Lyceum on the Strand - partly by reviving venues other operators saw as lost causes.

The son of a refrigeration engineer, Mr Gregg has proved to be good at playing an unpromising hand. At school in Scarborough he was, he admits, "hopeless": "I was always 30th out of a class of 30." He left school at 16 and failed in his first ambition, which was to work for Odeon cinemas. "They asked me at the interview what 5 per cent of £100 was and I couldn't give them the answer," he recalls. He then went to work for ABC Cinemas as a trainee manager. This involved "making the sandwiches on a Saturday afternoon".

By the time he was 28, he was a council employee, running the Floral Hall at Southport, near Liverpool. Like all the best entrepreneurs, Mr Gregg appears to have had no awareness of his limitations, in this instance as the callow manager of a little-known venue in a rundown resort. He attracted Marlene Dietrich, one of the great screen icons of the 20th century. Other performers were Ella Fitzgerald, Count Basie and Duke Ellington.

By the mid 1970s, the Greggs had struck out on their own as theatre owners and operators. Their speciality was taking over struggling venues and turning them round. One example was the Liverpool Empire, which was losing £750,000 a year in the days of Derek Hatton, the high-profile council leader. The Greggs leased it, realising "that with a different approach to management and operations, it could be a home to big musicals: we thought we could make a difference and we did".

Mr Gregg is also proud of having reopened the London Lyceum in the 1990s at a cost of £14m, after the theatre had been closed for 10 years. Andrew Lloyd Webber's revival of Jesus Christ Superstar ran there for two years, followed by Disney's Lion King.

The Greggs sold out to SFX in 1999 because "we were running a family business and suddenly we realised there were 5,000 people in the family".

Mr Gregg agreed to become SFX's European operations director. He warns other entrepreneurs against following suit. "If you sell a business you have been particularly close to, do not stay on there - it can never be quite the same again."

Last year, Mr Gregg bought back Apollo's cinemas and bingo business from SFX's acquirer, Clear Channel. He paid £23m. There are 12 cinemas, including the expensively revamped Apollo West End on Lower Regent Street, and four bingo halls.

"Admissions at the cinemas are up 10 per cent this year against the industry average," he says, "and we are very proud of that." Together, cinemas and bingo generated pre-tax profits of about £1.5m on turnover of £12.2m in the year to March 25. From this, the Greggs took £240,000 in dividends.

Entrepreneurs are stereotypically brash and boastful. But Mr Gregg, a large and diffident man, is humble. The nearest he comes to articulating a business philosophy is when he says: "You have to have a vision of how things should be."

The Greggs' business interests have, as he puts it, "grown like Topsy". Gregg Air is one example. Mr Gregg bought his first private jet a couple of years ago to take him to and from football matches. The company now operates six jets, including a new Raytheon Premier. Gregg Air's management service enables clients' planes to be hired out when they do not need them. A share of the proceeds could help Gregg Air, marginally profitable on sales of £5.5m this year, reach its target of a seven figure profit in 2005.

Another idea of Mr Gregg's is a service allowing wealthy football fans to pay £10,000 to £15,000 a year in return for guaranteed flights to all the away matches of their favoured club. It is a horrifying prospect for those who cherish the flat cap and brown ale heritage of the beautiful game: millionaire businesspeople jetting to an away match in Newcastle as casually as they might to a performance of La Traviata in Milan. But Mr Gregg will persist in seeing football as a business, and this, in his attempt to win popular support among Everton fans, is where he has come unstuck.

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