UK sport in need of government support, says broker Lansdown

Billionaire broker Stephen Lansdown had sought to end Bristol City football club’s reliance on his fortune. But the coronavirus pandemic has pushed back those ambitions by several years.

The owner of Bristol City, which plays in English football’s second-tier Championship, said it has been hit hard by the loss of matchday revenue at its 27,000-seater Ashton Gate Stadium with fans having been forced to stay away.

“It’s a tough time but we’ll work our way through it,” said Mr Lansdown, co-founder of investment platform Hargreaves Lansdown.

Mr Lansdown, 68, grew up in Bristol and also owns Premiership Rugby team the Bristol Bears and the Bristol Flyers, a basketball team. The lack of ticket sales has hit them all but rugby and basketball suffer disproportionately because of lower broadcast revenue.

It has crossed his mind that “you can’t just keep throwing good money after bad,” he said. “There comes a point in time when we have to start making some very difficult decisions.”

But Mr Lansdown is pressing ahead with a £100m sports and entertainment development at Ashton Gate, which comes after a £45m revamp in 2016. He has also invested £40m in separate training facilities for his rugby and football teams.

You cannot run a business on expenses alone

English sport is facing a funding crisis as fans remain barred from stadiums, slashing revenues and spurring calls for government support. Before Covid-19, Bristol City’s accounts for the 2018/19 season showed pre-tax losses of £17.7m before player sales worth £30m led to an £11.3m pre-tax profit. Ticket sales accounted for almost £6m of revenue.

Speaking before the second national lockdown was announced, Mr Lansdown said he was frustrated that pubs, restaurants and cinemas had been allowed to welcome customers into indoor spaces, whereas sports stadiums remained closed to spectators. That meant teams were unable to recoup some of their losses from ticket sales.

But Mr Lansdown, who lives in Guernsey and is worth £1.35bn, according to the Sunday Times Rich List, rejected the argument that billionaire owners of sports teams should incur all the losses.

“I can’t run my business because the government isn’t allowing me to run it,” he said, defending his use of the furlough scheme for non-playing staff in conjunction with wage cuts and deferrals for players. “You cannot run a business on expenses alone.”

A proposed radical restructuring of English football that included a Premier League-funded £250m rescue package for lower-league clubs was rejected last month after being criticised as a “power grab” by elite teams. But Mr Lansdown described so-called Project Big Picture as “the most constructive thing I’ve heard in football ever since I’ve been in it [since 1996]”.

He insisted that the plans, which included sharing of broadcast revenues, could have been negotiated. The UK government has said it is unwilling to rescue lower-league clubs because of the billions of pounds of revenues in the upper levels of the game.

Rugby, meanwhile, has been hit especially hard because it is more reliant on ticket sales, whereas 54 per cent of Championship revenues in the 2018/19 season came from broadcasting, according to consultancy Deloitte. Rugby Football Union, the body that runs the sport in England, is expecting a £145m revenue shortfall as a result of the pandemic, leading to renewed calls for government funds.

“It’s desperately needed,” said the Bristol Bears owner. “I’m hoping we’ll see that come through — without it everybody’s going to be in a very difficult position.”

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Last month, the Bristol Bears won their first European trophy, the Challenge Cup in France and made it to the Premiership semi-final. However, this month the team reported a pre-tax loss of £3.2m for the year to the end of May, down from a pre-tax profit of £1.8m a year earlier.

Mr Lansdown says that rugby has not been commercially savvy enough previously but hopes private equity firm CVC Capital Partners, which has bought a 27 per cent stake in Premiership Rugby, the top tier of English rugby union, can drive broadcasting revenues higher. He conceded, however, “obviously, at this point in time, it is probably a little bit more difficult than they thought when they first took it on”.

The pandemic will not deter Mr Lansdown’s interest in basketball. As a fringe sport in the UK with “no real television rights”, it is more a labour of love, he said. But it has reinforced the need to set up his businesses for the long term: “I won’t be around forever,” he said.