FD interview - Championship points

Tony Hughes has been finance director of The All England Lawn Tennis & Croquet Club for almost 25 years. Jenny Hirschkorn lobs a few questions about life at Wimbledon.

For 50 weeks a year, the genteel suburban streets surrounding The All England Lawn Tennis & Croquet Club (AELTC) are a haven of peace and tranquillity. But on 20 June a kind of organised Bedlam will descend on the neighbourhood as the Wimbledon Championships get under way.

Each year, the two-week event represents the culmination of months - and, in many respects, years - of planning on the part of the Club's management, staff and members, and for financial director Tony Hughes it is a busy time. After a slight lull in his workload during April and May, when all the planning has been done, Wimbledon fortnight means getting out there and making sure that things are all going smoothly.

'With 35,000 visitors on site each day, all the services are being tested to destruction,' he says, 'and one of my roles is literally just walking around, talking to people, seeing to it that everything is working as they wish.' He is talking about the nitty gritty. Things like rubbish clearance, toilet cleaning, security. It's all pretty far removed from the glamorous image of world-class tennis, but without such attention to detail the event would risk losing its cachet.

Hughes, 58, has been a fixture at the Club since 1981 when, as financial controller of Sterilin Ltd, a manufacturer of disposable medical products, he looked in the newspaper because a colleague had told him that Wimbledon tickets were being advertised. He found no tickets, but instead stumbled across an ad for the post of financial controller and, as an avid tennis player and fan, he 'rather fancied seeing the Club outside The Championships'.

Genetic pull

Accountancy had not been part of Hughes's game plan: in fact, he had made a concerted effort to avoid the profession since it would mean following in the footsteps of his father, a London District Society chairman. Instead, he was going to become a civil engineer and got a scholarship from British Rail, with the idea of doing a year's placement with them before going to Southampton University.

But he was not impressed with the way things worked at British Rail and realised that he would have to rethink his plans. 'I couldn't go on fighting the genes any longer, so decided to go into accountancy after all.' He went straight into what was then Deloitte & Co (now PricewaterhouseCoopers), giving up his place at university. It is something that even today appears to make him somewhat uncomfortable. 'No degree, I'm afraid,' he says in an apologetic tone.

A series of financial posts in medium-sized private manufacturing companies followed before Hughes spotted the Wimbledon opening. After a tortuous three months of interviews, during which his wife, Philippa, was put under almost as much scrutiny as Hughes himself, The All England Lawn Tennis Club finally had itself a new financial controller. So what sort of organisation was it that Hughes was joining?

'There was a retired naval commander who wrote up the cash book but didn't do things like bank reconciliations, and a retired tennis club secretary came in two mornings a week to pay the wages.' This was at a time when wild child John McEnroe had just knocked out supercool Bjorn Borg on Centre Court; when Martina Navratilova's star was in the ascendancy; when the surplus funds generated by The Championships exceeded £1m for the first time. Yet the whole event was being run more like an Edwardian gentlemen's club than an international sporting business.

'Just four years before I joined,' Hughes adds, 'Chris Gorringe (who retires as chief executive in July) had been writing up the cash books himself. I've still got one of them and I'm certainly not throwing that away.'

Initially, with the Club staff totalling only around 40 people, Hughes's own responsibilities were pretty diffuse: as well as taking on everything financial, he was in charge of the dressing room, catering and a wide variety of other areas. But over the years the management structure has become much more professional. 'Very slowly we took on new directors: we took on a Club secretary first of all to deal with all members' matters, so catering sort of disappeared, and then we took on a marketing director, a director of television and an IT director.'

These days, the Club employs about 120 people year-round, but this mushrooms during The Championships. In addition to a temporary staff of several hundred who are directly employed by the Club, there are something like 6,000 others working on site every day, including those provided by contractors, voluntary bodies and public services as well as members of the media.

'Because not everybody works the full fortnight, we end up accrediting about 24,000 people. It's a huge operation,' says Hughes. Since the personnel manager reports to him, it is an aspect with which he is very closely involved.

The Club's finances have, to the extent that they are published, shown a similar pattern of growth. The £1m surplus of 1981 increased steadily until the late 1990s, when it peaked at just over £33m. It has now dropped back to settle at around £25m, which Hughes explains is the result of increased insurance costs and a decision involving European television, which meant getting a wider audience reach for a reduced income. The entire surplus is passed to the Lawn Tennis Association (LTA) for the development of British tennis.

Old-fashioned accounting practices

But in an age when business is all about increasing transparency, the All England Club still clings to some of the old-fashioned accounting practices that have largely disappeared in other sectors. Indeed, it is far more reticent about its finances even than other sporting bodies.

So there is no information available on the Club's income, which is largely derived from gate receipts, media rights and official suppliers' deals.

What is available is the report and accounts of The All England Lawn Tennis Ground plc, of which Hughes is company secretary. This company, formed in 1920, owns the grounds at Wimbledon and is jointly owned by the AELTC and the LTA. Its income is largely made up of a facility fee for hosting The Championships and revenue from sales in the museum and tea lawn shops. Of last year's retained profit of £2.1m, £1.8m was transferred to the Championship Building Reserve.

But far more crucial to the Ground company's finances are the funds received from the sale of debentures. Originally issued in 1920, debentures are now sold every five years and it is from this source that the Ground company derives the funds to meet capital expenditure. Hughes briefly outlines the concept of debentures. 'They are simply a loan of money. We get people to lend us the money - £2,000 in the last Centre Court issue - and they then pay a non-returnable premium of £18,000 plus VAT on top. We then convert that premium into bricks and mortar.' As a result, all the major building work at Wimbledon is completed without significantly adversely affecting the surplus.

Managing the debentures takes up something like a third of Hughes's time.

'I'm responsible for drafting all the background notes, liaising with professional teams and advisers and generally running the whole issue.' Working with professional advisers, Hughes has been successful so far in resisting 'attacks' by the Inland Revenue (now Revenue & Customs) on the non-taxable status of debenture premium.

Until 1997, debenture issues had been confined to Centre Court, but then Hughes initiated the first issue on No 1 Court. 'It's also important for me to see that the debenture holders are well looked after and that, after five years, they want to come back.'

Debenture holders are entitled to one ticket for every day of The Championships during the lifetime of the debenture, and these are the only tickets that can legitimately be sold on the open market. Hughes works together with the Club's marketing director to recommend buying and selling prices for the market.

One of the management's main challenges is concealing from the paying public the fact that, to a great extent, the grounds are a building site.

In 1994, work began on an ambitious long-term plan designed to protect the future of The Championships. 'We may have something like 50 building projects of differing scales going on at any one time,' Hughes, who is secretary of the ground sub-committee, explains. This year will see the opening of the new turnstile building at Gate 3, which will house a new Wimbledon Lawn Tennis Museum, shop, library, bank and administrative offices.

But by far the most ambitious project in the pipeline is the multi-million pound renovation (again, no precise figures are published) of the hallowed Centre Court, due to be completed by 2009. Preparation work has already begun to allow the installation of a retractable roof, which will see an end to those miserable scenes of fans huddled under umbrellas which intersperse the inevitable replays on our television screens.

In addition, the court's capacity will be increased from 13,800 to 15,000 and there will also be more comfortable seating as well as improved catering and media facilities.

For Hughes, the end of The Championships is far from a chance to relax.

'Our financial year end is 31 July, so I then have to re-motivate everybody to prepare for that.' And, once that's done, it's start all over again for next year.


Who: Tony Hughes

When: 19 May 1947

Where: Sutton, Surrey

Qualifications: FCA

Work: Financial director, Subsidiary Holding Group, Howden Godfrey Group Ltd; financial controller, Granger Associates Ltd; financial controller, Sterilin Ltd.

Life: Gardening; theatre; walking (especially with much-loved English springer spaniel, Redd); and, of course, tennis.

The All England Lawn Tennis & Croquet Club facts:

•    The first meeting of the Lawn Tennis Championships at Wimbledon took place in 1877, when the only event was the Gentlemen's Singles.

•    The first Ladies' Singles took place in 1884.

•    Some 450,000 people attend The Championships each year.

•    Over 50% of the Club's total income comes from television rights.

•    This year, total Wimbledon prize money will exceed £10m (£10,085,510) for the first time, with the Gentlemen's Singles Champion receiving £630,000 and the Ladies' Singles Champion pocketing £600,000.

•    The All England Club is an integral part of the bid to bring the 2012 Olympic Games to London.

•    Throughout the fortnight, spectators are expected to consume some 28,000 kilos of strawberries, 7,000 litres of cream, 17,000 bottles of champagne and 300,000 cups of tea and coffee.

•    In 2003, film makers were given unprecedented access to the grounds during and after The Championships during the production of the movie, Wimbledon.

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