Winning Over The CFO For Your Stadium Project
February 26, 2016
You have decided your venue needs to be renovated or rebuilt. Now, what?
The first step is to make sure the Chief Financial Officer is walking alongside you and not kept in the dark during the decision-making process.
The CFO is a valuable counsel and ally in decision-making in capital spending for venues. Engage them right away because they will help manage financial risks and get the project over the finish line.
“If you can convince the CFO the project is worthwhile, you can get the project done,” said Bill Duffy, the Chief Operating Officer of The Aspire Group, and a former CFO in the NFL, NHL, and NBA. “If the CFO is the one suggesting spending money on a capital project, the owner will listen to the idea because the project has been vetted.”
Duffy’s key points to consider when working with a CFO:
- Be prepared to say why the project is needed and what would constitute a successful initiative. Answer this question for the CFO: How does this make us better?
- When they challenge you with specific questions about a project, understand they have a fiduciary responsibility. Do not make it personal. Do not become defensive.
- They want you to think long term. Do not suddenly burst out of your office a month after the yearly budget has been approved and declare, “We need some money for X.” Get your ideas on their radar well in advance.
- They see all budgets. Therefore, they can best advise on the priority this type of project would take and what the optimal window for approval would be.
Duffy, who helped create the first NFL salary cap in 1994, said a CFO may initially challenge a project just to judge your level of commitment. So be prepared for your CFO to skip rapidly to the risk/rewards of a project.
The CFO wants to know the construction timeline and exposure (insurance). They can often help you see additional revenue streams or the long-term value of upgrading amenities. Take it all in.
Why the CFO is a valuable asset…
- They are going to know your borrowing capacity. Have you reached it already or is there room?
- They tour the facilities regularly, sees the decay you see, and understands an update is needed.
- They know better than anyone the answer to the question, “Where are we going to get the money?”
When you go into that final approval meeting with the ultimate decision-maker (president, owner, the board of trustees), it is going to be a smoother meeting with an informed CFO sitting next to you. The CFO will not be surprised by anything in the meeting nor ask a question that is going to create a thud.
“Many people do not think the CFO has a role in the approval process,” Duffy said. “The fact is the CFO is going to be the one to find and generate the capital for a project. It may be the CFO in the end who is actually getting the approval from the owner or University President.”
In the end, the owner or University president is going to ask, “Has the CFO endorsed it’?”