Luton Town CEO talks financial risk and not joining the mayhem of the Championship big spenders

After 12 years out of English football’s second tier, Town CEO Gary Sweet tells offthepitch.com the club’s "astute" transfer business will serve the club well in the Championship.

The Hatters notched a hat-trick of loan signings on a hectic transfer deadline day last week, adding Manchester City’s Luke Bolton, James Bree from Aston Villa and Chelsea’s Izzy Brown to their squad.

But Town’s £1.3 million signing of Croatian goalkeeper Simon Sluga, breaking the club’s transfer record, was the only player bought in the summer. In total, ten players joined the club on loans or free transfers.

"We have got good value because we cap ourselves on salaries and all the players we are bringing are of a lot more value," Sweet said. 

"So we are grateful to the loaning clubs to help in that regard because we don’t want to break our salary structure. They recognise that when they come to Luton they will learn and develop. It’s a good win-win situation."

Spending wisely and reducing the risks 

Sweet claims Luton’s shrewd signings underscores the club’s unique approach to player recruitment, where rival clubs may have spent millions to strengthen their squads.

"We do believe there is a very, very good market on players, and what we would rather do is to spend the money on their salaries to increase the wage budget and also in areas of the backroom staff, and player care and development, and the facilities and the equipment we have got in aiding their development," he said.

"What we want is for players to know that if they come to Luton they are going to end up better players in a short space of time and even better when they leave. That’s the most important thing for us, that’s where we invest our money.

"So we don’t feel the need necessarily to spend fees on what we class as ready-made players when we are comfortable in bringing in free transfers and developing them ourselves."

He cites the examples of Manchester United academy graduate Ryan Tunnicliffe and former Everton defender Brendan Galloway - players with Premier League experience who can, according to Sweet, mature at Luton and hopefully fulfil their "huge talent."

"Everything in the transfer window is a risk," Sweet said.

"You either risk a couple of million to buy a player but you reduce the risk when he steps on the pitch and performs. Or you take a risk in a different way, you don’t spend the £2 million, you put the risk in the faith and belief in that individual and that in our environment we will bring the best out of him. We see that actually as a lower risk."

Looking for value in competitive transfer window

In the matchday programme notes before Luton’s 3-3 draw against Middlesbrough on the opening day of the season, Sweet laid out the financial challenges facing the club this season.

"We enter a world where as many as a third of our competitors will be in receipt of dozens of millions of pounds of parachute revenue from the Premier League that is creating a staggering diversity ratio in wealth between clubs," he wrote, also noting the controversial sale-and-leaseback stadium deals done by Aston Villa, Derby County and Sheffield Wednesday "to disguise their breach of Financial Fair Play regularity."

Despite the financial gulf between league newcomers and Championship clubs "with complimentary windfalls as a reward for failure" or blessed with "immensely wealthy benefactors who seem to be on a personal ego trip," Sweet said Luton Town would do things differently. 

To avoid becoming another Bolton Wanderers, the North West club beset with deep financial difficulties, and to compete in the second tier, Sweet says they "need to operate creatively, intelligently, boldly and bonded together."

Asked to elaborate, Sweet talks up Luton’s player recruitment policy to offthepitch.com: 

"We made a conscious decision when we came into the transfer market this summer. Here’s one example: Because of the intense competition within the Championship, some clubs battle it out for one player. 

"What generally happens is that the club will overpay in terms of the fee and the salary for that player, so you get poor value for money. Wherever we have entered the market for a player and there is competition, we will go and find another player. 

"We try and find players where there is no competition or where that player specifically, for whatever reason, wants to come to Luton.

"Actually, I am really pleased and proud to say that bar none every player has effectively made a choice, he has done his research on our club and wants to come to Luton.

"There are things we are doing that are attracting footballers. I think that is primarily in how we invest our cash, how we take those risks. We do it in a different way. And that results in us not needing necessarily to join the mayhem."

Ownership connected to community

Gary Sweet completely understands why clubs take financial risks and gambles - with so much gold in the pot at the end of the rainbow. 

"But you have to have that money to lose - and we don’t. 

"That’s not because of a lack of generosity from our investors or board members. We decided we want our ownership profile to be grounded and connected to our community and our football club, which effectively restrains that profile to people from our locality generally and who are Luton supporters. 

"We all share that risk, but the financial risk is going to be very, very much smaller than an overseas investor coming into English football, investing into a football club as someone who has no real emotional attachment to that community and who is willing to take the risks that we won’t be."

Fiscal prudence the watchwords

Navigating the choppy waters of the transfer market has been the biggest priority for Sweet in order to prepare the club financially for a tough season.

Luton’s whirlwind of transfer activity also included securing the services of James Redden, who joined Graeme Jones’ Hatters staff as head of sports science. It follows the 30-year-old’s eight-year association with Tottenham Hotspur.

 

"When James walked in the door we were knocked over by his enthusiasm. He’s excited by the opportunity here and the fact that we are going in the right direction," the CEO said.

 

Sweet is satisfied with Luton’s financial position: 

 

"Our priority for the season is to break even. What we don’t want to do is buy our way into the Championship. 

 

"We want to do it in the right way, we want to become a fully fledged member of the Championship but being fiscally prudent and maintaining our culture and principles. That element is fundamental to it. We just simply can’t lose money, or certainly nothing significant," Sweet says.

 

 

He points out that if you look at where everybody is in the Championship, the majority of clubs are losing tens of millions and that isn’t a place Luton can afford to be.

 

"It’s utter madness actually. That’s all within their control, it’s not as though anyone can blame anybody else for that. So, therefore, it’s within our control and it’s our decision as to whether we want to join that party or try and buck the trend and do things our way. 

 

"We have always wanted to do things our way. We have always wanted to correct in some ways what we see as being, let’s say, malfunctions in the football industry, and there are plenty of them, even if it is just for our own sanity."

 

Bigger role for new finance director

 

The departure of the club’s finance director, Simon Gibb, in July may have triggered alarm bells about some turmoil at Luton.
Not so, according to Sweet. The split was amicable. 

 

"There are no issues," he said, adding that there will be no short-term impact on the club. 

 

"None at all. We have a perfectly capable set of people that can keep the business going."

 

Now that Luton have wrapped up the transfer business and the club have completed £1 million of upgrades to Kenilworth Road, including goal-line technology, new TV camera positions, press areas and dugouts, the focus can turn to Gibb’s replacement.

 

Sweet said the strategic finance director role comes with a wider remit due to the bigger ticket items of doing business in the Championship. 

 

"In addition to that, our property business is growing rapidly and we’re attracting investors and partners and we need a different profile and skillset in our accounting team. We probably need somebody with more property experience.

 

"There’s no real rush. It’s more about getting the right person," he said.