First Artist: Jon Smith

The agent turned media mogul on celebrities, product placement and commercialising football


Meet ‘one of the men that changed football’. Jon Smith began his journey in the 1980s as an agent to the top flight of English soccer, before floating his business on AIM and diversifying to create a £50m media, events and entertainment empire with a roster of A-list clients. He talks to Growing Business about business, celebrities and, of course, the beautiful game

Like many great UK entrepreneurs, Jon Smith’s inspiration for First Artist was drawn from the US. Following the sale of his music production business in the early 1980s, he moved to LA where he became fascinated by the glitz and glamour of US sports. He realised that the slick marketing, big sponsorships and ‘family fun’ of teams like the LA Raiders had a home in the UK – specifically in English football. “I spent a lot of time watching the LA Raiders and they had this great anti-hero marketing campaign,” he recalls. “I thought that, although football was a little lower down the food chain, this type of marketing would still work.”

Following an opportunistic purchase of the First Artist name (previously a film company owned by several Hollywood movie stars) and a partnership with retiring footballer Paul Mariner, Smith was ready to begin a project that would revolutionise the national game.

Kick off

There’s no place better to start than at the top, and First Artist’s initial client was the English Football squad. Again, this was an opportunistic move as the squad’s previous agent Harry Swales had stepped down. “The players voted on who their agent should be,” Smith explains, “and my business partner was Paul Mariner, who had just left the team, so he knew all the players.” However, Smith had to find imaginative ways to get around two big forces in the game, namely the England kit sponsor Umbro and the as yet unreformed English Football Association.

First off, Smith spotted that the relationship between players and the press could be exploited to the commercial advantage of both parties. “Back then, the press had to pay if they wanted to talk to a player. My idea was that they wouldn’t be charged but the player would wear a T-shirt for the photoshoot and that was the picture they had to use.”

Using his leverage with the players and offering the press a deal they couldn’t refuse, Smith was able to entice big sponsors such as Coca-Cola, back into the game (Coca Cola later sponsored the League Cup). But this was just the start and TV was next.

Substitute footballers often seem to check their laces are tied before they run on. The camera dwells on them as the game halts before their arrival. Smith says that in games that were already as good as won, he would get players to do this on purpose to ensure that the boot manufacturers’ logos were displayed on the screen. “We got 30 seconds of prime-time TV,” he says. “It was a huge amount of money.” Similar tricks were devised using the physio’s bag, and after this the advertising boards on the ground were spotted as ideal locations for players to celebrate their goals.

“Gazza was the best,” says Smith. “He’d score and you’d see him looking around for the other players and then he’d run down the pitch. The other players would follow him and then he’d fall over in front of the board!”

A points system was devised to divide up the cash between the players, and Smith’s prestige with footballers and advertisers alike was maximised. As a soccer agent, First Artist now employs a “floor full of people” who handle the affairs of players. Requests are diverse, ranging from transfer arrangements and commercial activities to booking cinema tickets for a player going out on a date. 

True fans

Smith soon branched out into other areas. Players have enormous cache among many people, and politicians and artists are just as excited as the ordinary fan to meet one of their teams. Smith is something of a name-dropper and will happily regale you with tales of how he introduced Ozzie Ardilles to Phil Collins or persuaded New Order and the England Team to record World in Motion – arguably the first ever decent football song, which was recorded for the 1990 World Cup. As he knows everyone who is anyone, or so it seems, it was a natural progression that he would soon begin managing artists too. Later this would take the form of First Artist Management, with notable clients ranging from the likes of ex-footballer turned commentator Andy Gray to former Soviet leader Mikhail Gorbachev.

But Smith didn’t diversify quickly enough, as his first priority was to boost his company’s reputation. Football agents generally get tarred with the same brush, so in 2001 he decided to reveal all and take his business public, first on Ofex (now Plus), then AIM in 2002. However, the stock market has its risks and First Artist learned the hard way just how big they can be.      

Injury time

“We were riding the crest of a wave, and then someone took away the ocean,” Smith recalls. It was 2003, and the European Union (EU) provided First Artist with a double whammy of misfortune. It demanded a review of Sky’s dominance of football rights, and German channels and ITV Digital threw their hats into the ring. First Artist had been employed by Sky to promote their football games since 1993, but now this contract was weakened.

Worst of all, the EU ruled that footballers have the same rights as other workers. In the ensuing battle, it was decided that all-year round transfers be stopped. This meant the transfer windows of January and June to August were the only periods players could be bought or sold. This cut First Artist’s trading by two thirds and cashflow became a major issue.

Once word reached the City, the company’s share price fell faster than a forward in the penalty box. From a high of 70p, it dropped to just two pence. Smith was tempted to take the business private again. Stormy meetings with investors followed, but Smith stuck to his belief that the company was inherently a good business. “We do make a lot of money but cashflow is so lumpy,” he says. “From this time I learnt two valuable lessons: cash is forever king (and now if I buy I never dilute the cash) and that I should have diversified the business sooner than I did.”

Smith was able to persuade the banks to lend him money so he could expand the scope and scale of his company. “We can make half a million pounds from one deal; there aren’t many businesses that can do that,” he says. “So I remained convinced that we were a good business, but we needed to fill in the gaps.”

Strengthen the squad

Smith went on the trail for acquisitions, looking for companies which, although connected to his original offering, would add new dimensions. He had already worked in events, such as the firework-powered launch of Sky TV’s Premier League coverage. First Artist was also intimately involved in the lives of footballers and artists, so with high calibre and net worth individuals on the books, opportunities abounded.

Smith is inspired by the late Mark McCormack, the founder of IMG, who was dubbed ‘the most powerful man in sport’. McCormack, like Smith, began by signing top players and made millions through sponsorships. Later he was filming tournaments before moving into other sports. “He’s a bit of a legend as he managed to square the circle by handling players, tournaments and filming rights,” says Smith. “I don’t want to be a distributor, but I am interested in content, and that’s what football players and artists are.”

Star player

His biggest acquisition to date was the purchase of Dewynters, a 102-year-old, family-owned business, which handles most of the advertising for the West End theatres, as well as Broadway. “Every acquisition strategy needs a cash cow and Dewynters was ours,” says Smith. “It controls about 80% of advertising in the West End and is a huge name.”

Smith learned through one of his many contacts that the business had just rejected one offer, but that the family was looking to sell. The £15.5m deal would be a reverse takeover as its valuation was greater than First Artist’s. “Because our share price is so low we have to do it this way,” Smith explains. “So there’s always so much more paperwork than if we had a better valuation.”

Nevertheless, the real key to a successful acquisition is to make sure the vendor is happy and that the integration and hand-over go smoothly. “You have to give them enough initially to make them feel that they are really selling something,” says Smith. “The business is their baby and they need to feel what they are getting in return is enough. At the same time, you have to get the balance right, as you need them to be motivated to achieve the full earn-out.”

As a general rule, he has kept businesses intact and allowed each one to operate individually. First Artist takes over the bookkeeping, but tries to maintain the original management team. But there are synergies and crossovers. Smith is chief executive and oversees the operations, but resists direct involvement. “I am no longer at the coalface,” he says. “The key is to understand your strengths and weaknesses. I’m very much about face-to-face, but I need people who can do the nuts and bolts.”

His brother Phil now handles the football agency side of the business, and while Smith is well known among players and the clubs, he resists getting too involved. In Richard Hughes, he also has a strong managing director in the boardroom. 

The future

Currently, the AIM market is somewhat depressed, and Smith clearly wants to boost his share price. It seems bizarre that the company’s shares are valued at just a few pence, but liquidity in the market is a real problem and seems to bear little relation to the actual business. At the same time, football ‘bung’ allegations are continuing to circulate. Smith reckons that football receives harsh treatment from the authorities, and insists that, on the whole, the game is actually very clean – although he admits there are a “few dark corners”. Nevertheless, the game has enormous cache among so many in society that it will continue to open doors for First Artist, irrespective of any bad publicity.

There’s something to be said for the idea that football is recession-proof, but First Artist has learned that the eggs-in-one-basket approach is not one for the stock market. More acquisitions are in the pipeline and expansion into America looks to be on the cards, which in a sense was where the First Artist dream began.

Company stats: Company: First Artist Founded: 1986 Founder: Jon Smith Proposition: Entertainment management Turnover: £48.6m (2007)

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