The secret of getting to the Premiership and staying there, by Mr Ann Summers

Birmingham's balance of risk and prudence is a winner. John Lawless meets owner David Gold

Sunday 25 May 2003 00:00 BST
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David Gold thought he knew the difference between running a sex shop and a Premiership football club: with a sex shop, everybody else vibrates and you make loads of money. With a top football club, you get the shakes while everybody else gets rich. This year, however, everything changed. Gold will shortly announce that Ann Summers and Birmingham City FC have both made healthy profits.

Gold co-owns both. His 61 sex shops, part of the £55m-a-year Gold Group, always make money. But no one would have wagered tuppence ha'penny on a club, in their first year in the Premierhip, making anything but a thumping great loss. "Bizarrely," says Gold, "we are actually going to come in with a profit. It's going to be £4m. Maybe even £5m."

This astonishing result stems directly from a secret business plan, agreed with manager Steve Bruce, which was to see him become the first Premiership coach whose performances on pitch and on paper are irrevocably linked. At the start of last season, Bruce signed up to a formula which tied his ability to spend next season to this year's results.

"We budgeted for relegation as a baseline," explains Gold. "Coming anywhere from fourth to eighth from the bottom, i.e. surviving, was going to be good. We budgeted for good FA and Worthington Cup runs. They didn't happen, but this was balanced by our ending up 13th in the League, way beyond expectations."

Bruce was guaranteed every penny beyond break-even. "TV money and the like is not the issue," says Gold. "Running a Premiership club is about doing what millions of housewives do every week: balancing the books, with an occasional little bit of managed overspending." On the budget of up to £8m he was given, Bruce's business performance has been impeccable: nine of his 13 signings have cost just £2.4m, including the Republic of Ireland captain, Kenny Cunningham, and Christophe Dugarry on "frees".

Gold claims that, at £750,000, Matthew Upson is "the Premier League's best signing of the entire season". Upson will be even more of a bargain, he insists, if he eventually has to post a cheque to Highbury for another £2.75m. "That'll mean Upson is playing for England [he was in the squad for South Africa] and scoring," says Gold. Bruce's four major buys - Jamie Clapham (£1m), Robbie Savage (£1.2m), Alliou Cissé (£1.5m) and Clinton Morrison (£4.5m) - totalled less than Newcastle paid for Jonathan Woodgate.

So dedicated were Gold and his co-owners - brother Ralph and Sports Newspapers owner David Sullivan - to making the plan work, they reviewed it daily with chief executive Karren Brady. "If we suddenly start becoming fans again," says Gold, "she asks, 'Are you sure you can afford that?' "

But, early in desperate December, it was not Bruce but his three bosses who lost their willpower to say no. City were 16th. Arsenal, Chelsea and Liverpool were coming up. Birmingham were already looking down. "We had an inordinate amount of injuries," says Gold. "Against Manchester United, we had a centre-forward at centre-back and a 17-year-old marking David Beckham." Two fantastic saves by Barthez had convinced the three to give Bruce £7m to spend. "We only got beat two-nil," Gold reasons. "We knew we could've drawn it.

"At Christmas, we took a risk. We spent our future income. We brought in six players, more than any other club." Gold fretted about Dugarry, but not because of a £40,000-a-week pay packet. "I knew he'd played 56 times for France, but also that he did not score too many goals. I thought he might be too delicate, too David Ginola, when we needed the battling skills of Robbie Savage." Gold was proved beautifully wrong about Dugarry, but overall got it right. "Had we not bought players, there was no way we'd have gone on to beat Liverpool 2-1."

They were fighting for a half-century-old dream. In 1946, David and Ralph, now 67 and 65, had stood in a 50,000 crowd at St Andrews when Birmingham beat Manchester City 5-0 in the FA Cup. An awestruck Ralph told his brother: "There are three million people here."

"How do you know?" asked David.

"I counted them," said Ralph.

They didn't take much convincing, in 1993, that Birmingham represented the last chance to establish a big-city football club. David Gold persuaded his brother and Sullivan to buy Birmingham City for a shilling and their debts. Having spent £10m to take the club back from near-death in the Second Division to the Premiership, investing another £7m to keep it there was impossible to refuse. But the Golds and Sullivan personally guaranteed the £7m overdraft.

"We are market-grafters," says Gold. "We all started out with nothing. We've reached heady heights, but, collectively, are very prudent. We don't gamble with Birmingham City Football Club. Had we gone into the First Division, we would have lost £7m. In fact, we got it back."

At precisely the same moment as Birmingham went for broke, and won, West Ham's chairman, Terry Brown, was failing to take the same decision. And lost. Brown opted for the opposite, cutting costs. For Gold, West Ham's relegation was more painful than anything. As a seven-year-old East Ender, he never had enough pennies to get into Upton Park. "I bunked in at half-time," he recalls.

As a teenager, he was denied a career as a speedy left-winger at West Ham. His father refused to sign the apprenticeship forms, insisting instead that he become a £12-a-week bricklayer. A couple of years before buying Birmingham, he had tried to buy West Ham, spending £1.5m on acquiring 30 per cent of the shares. "We were blocked from getting on the board by two families," he says.

When he saw the fixture list at the start of last season, West Ham were Birmingham's final opponents at St Andrews. His worst-case scenario was that both teams would be threatened with relegation, and would have to battle it out on the final day. In the event, it was the team he still adores who came to Birmingham needing to win to stand any chance of staying up. "Even by Christmas," says Gold, "I don't believe Terry and his board had believed they could be relegated."

Gold had, long before the final game, invited 12 ex-school chums to join him for the match. "All are West Ham fans," he says. The Birmingham directors' box was humming with claret-and-blue passion. "Even my daughter's boyfriend is a West Ham fan," says Gold. He seated Danny Cunningham out of sight, behind Terry Brown. "Imagine if they had scored, as they did, and the only person in the Birmingham party who is leaping around with glee is Jacqueline's fiancé?"

Gold was left silently praying that West Ham would not win. Under the "ladder payments" scheme, Birmingham would get more from the Premiership pot the higher they finished. "We were playing for £3m," he recalls. Paolo Di Canio's last goal for the Hammers cost him £1.8m. "Bolton had already ensured that West Ham were down. It was so unimportant, I should have rushed down on to the pitch and covered our goal with clingfilm."

Lose some, win some. "The only time we ever made substantial money out of football," says Gold with a huge grin, "was when we sold the West Ham shares. About half a million quid!"

Bruce and Brady will meet their bosses soon to agree next year's plan. A bit of "next year's money" was spent last Christmas. But Gold, who applauds Charlton and Southampton as also being businesslike clubs, is confident that it will not only keep Birmingham solvent, but in the Premiership. Even when accounting for £6.4m of losses the previous season, Birmingham City will have at least broken even in the three years ending next year. "It's like running a sex shop," Gold says, "on a 100 per cent business basis."

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