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Join Gabby Logan every week as she speaks to some familiar faces about their relationship with money, the financial lessons they've learned on the road to professional success, and how they're investing for their family's future.
Visit ii.co.uk for more investing ideas and information.
Gabby: Hi, I'm Gabby Logan, and this is the ii Family Money Show. In each episode I speak to a familiar face about the role money has played in their family life and professional success. This time I'm joined by Lord Sebastian Coe, the double Olympic champion who went on to be an MP, Chair of the Organising Committee for the 2012 Olympic and Paralympic Games, and now the President of World Athletics. In our interview he tells me about the money issues he faced early on in his career when athletics was transitioning from an amateur sport to a professional one, why he was determined to become a politician from a very early age, and why he loves to roll up his sleeves and get fully involved whatever the project he's working on.
Lord Sebastian Coe, it is lovely to see you and to be able to chat to you. Can I call you Seb for the rest of the interview, or is that too informal?
Sebastian: No, no, you absolutely can. Please.
Gabby: Good. Let's go back, as this is the ii Family Money Show, to when you were a young boy, a young lad growing up. How aware were you of your family's financial position?
Sebastian: That would've been before decimalisation then, I guess. That's a good question; I don't know, I'm not sure that I really ever thought about it. I mean, I had a half-sister, two sisters and a brother, and we never felt we were going short of anything. But with effectively four or five children there wasn't a lot; it was spread a little thin. Holidays were pretty much domestic affairs. Actually you'd be pleased to know they were normally in North Wales because I was brought up in the north of England, so that was probably the quickest way, Harlech and Barmouth and places like that. I never got on an aeroplane until I was 18, and that was because I went to the European Junior Athletics Championship. So, no, it was a fairly standard Sheffield upbringing really.
Gabby: And you didn't have chats about financial matters, or pensions, or how a mortgage worked, all those kind of I guess financial literacy. You know, did that come up in the conversation?
Sebastian: No, actually, it’s one of the things that I've always thought, if you think about it, probably are the sorts of staple things that should be in some way included in the normal warp and weft of a classroom. We all rather assume that there'll be a roof over your head, and probably didn't realise that it was a big chunk of wages and salaries every week or every month that went out to make sure that happened. And if you were lucky, you might be in a family where there was a company car, but the upkeep of cars was pretty expensive as well.
So, no, I think it probably is that blissful ignorance that kids have where they just assume it’s fine, that it all goes on until sadly sometimes it doesn't, and that’s a huge wrench. And I saw that in families at school where suddenly – you know, and a father would die, and you'd suddenly see a massive shift in just the general – not only in demeanour, but the welfare of the family.
Gabby: Did your mum and dad have quite traditional roles then in terms of who was the breadwinner?
Sebastian: No, not really. Well, my dad was an engineer and was born in East London, moved slowly north because that's where engineers tended to go via the US. My mother was an actress and she's of Indian heritage, so my grandfather was Indian. My grandmother and my grandfather met because my grandmother was a dancer, she met my grandfather who was a lawyer, an Indian lawyer visiting London, and then quite interestingly in the Twenties she went off to India, had two daughters, my mother being one of them. And so my mother was born in a hotel in Delhi, and then came back to the UK really around the start of the war – their marriage collapsed – and then she was evacuated to Northampton. And she went to RADA, so she was – my dad was an earthy East London engineer, and my mother was from really slightly the other side of the tracks really, and was more Hammersmith and Kensington.
Gabby: And so did she work when you were a child?
Sebastian: It’s a mystery. It still remains a huge mystery in our family as to actually how they ever met. And the first date didn't go particularly well, because my dad was a manic motorcycle enthusiast and thought it was a really good icebreaker to stick her on the back of an Ariel Square Four and take her down the Portsmouth Road at about 105 miles an hour. Apparently she didn't speak to him for three months after that.
Gabby: Something clicked though, something worked.
Sebastian: Something. Something.
Gabby: Yes. When you were growing up and obviously showing great talent as a young athlete, obviously you went to university as well, but how much in your mind was the possibility that being an athlete could become a full-time professional job? Because it was an amateur sport, wasn't it? So was it ever in your mind?
Sebastian: Gabby, it didn't cross my mind. I joined a club in Sheffield at the age of 11, The Hallamshire Harriers. Everybody worked in the club, I mean Sheffield was a mining and steel city, and even some of the athletes that you looked up to, and that made it into the British team, and there was a very well-known local runner, a guy called Trevor Wright, who got European and Commonwealth medals at the marathon but was still a fitter working in one of the local factories. And nobody ever thought about it, even in – you know, I slithered my way to a degree, and while I was doing that, I got accepted onto the trading floor at a bank for foreign exchange. It's the sort of thing that you applied for.
I didn't remotely think about athletics, and that was 1979. In fact, just before – just after I got accepted, I broke the world records, and suddenly the world completely changed. But even then, I didn't think about that as being a career destiny, it was something that gave me profile, but it was not something that immediately paid off. And if you look, I mean people you know, Gabby, like Brendan Foster, throughout the bulk of his career he was a chemistry teacher. Alan Pascoe was out there building a business. There were plenty of examples of athletes who were combining. I can't think of anybody I was in the British team with in the late Seventies that wasn't combining their career with a pretty tough outside job.
Gabby: And was that an even playing field globally, because you – was that the three world records in 41 days at that point?
Sebastian: Yes.
Gabby: So in terms of the rest of the world was everybody in the same situation, other countries? I mean obviously you'd have the state sponsored athletes in the East, wouldn't you?
Sebastian: It’s a really perceptive question, and I'll try and synthesise it because you've really tapped into some interesting history for our sport. It wasn't the same. What was interesting was that yes, there was appearance money, and we're quite open about it. And it wasn't life changing, but if you had a certain cache at a certain level of the sport, and even in the Forties and Fifties there was appearance money, particularly on the Scandinavian circuit in track and field, but it was minimal and it was very limited.
And what was interesting is that if you look back at the way cricket and football, and to a certain extent more of late rugby, dealt with that transition between the amateur through to the professional, it was quite explosive. Cricket had the Packer Tour and the complete disruption. I seem to remember as a tennis fan that Wimbledon, I think for a couple of years, had some of the professional players that refused to play there.
Rugby you know better than I do is still going through some of those growing pains. We adopted quite an interesting hybrid model where you had a trust fund. So for instance, when I broke the world records, I then signed a modest first contract with a shoe company, and at that point the funding went into the trust fund. It was managed by what was then the British Amateur Athletic Board. I was able to draw down from it what they called subvention payments that allowed me to train overseas for a few weeks of the year, or get medical. I couldn't go out and buy a Lamborghini or a 20 up, 20 down.
But what it did do – and the historical perspective in this is important, there was a real fear in athletics, particularly in my predecessor but two, Primo Nebiolo, that because there was no such thing in the Eastern bloc as professional – the word did not exist – so although most of their athletes were actually more professional than we were in that they were in state supported systems, some of it a bit questionable as we now know, and many were in the army, many were in police forces; they never saw a parade ground or a pavement. And so the reason we adopted the trust fund was to make sure that the sport didn't fracture down the middle, and you just had western sport and Eastern bloc sport, and it was quite smart.
And in an odd way I don't think it was – it certainly wasn't by commission, it was probably more by omission, the system just broke down. But it didn't break down in a livid or a violent way; in simple terms, if you were good enough you got paid, and if you weren't, you didn't. And it still meant that I could run in a major championship against athletes, for instance, at the Three A's Championships or a national championship that were not possibly at that stage of their careers at my standard, but it did keep the sport together.
Whereas cricket and particularly tennis – and it wasn't that many years earlier than that you had the £10 wages cap in football as well. And they were quite violent moments when things changed, but athletics actually genuinely did it in a much more controlled and constrained way. And the reason behind it was as much to make sure that the sport didn't fracture down the middle, because obviously the Eastern bloc in our sport was so much more important than it was in cricket or tennis, or even football.
Gabby: I was going to say, it's interesting how geopolitics has worked alongside this, or is entwined with all of this in the development of the modern day athletics landscape, isn't it, in terms of –
Sebastian: Oh, completely.
Gabby: – without that it may have worked in a different way if the Eastern bloc countries hadn't been as into athletics in the way that they aren't into cricket.
Sebastian: Yes. Yes, it's a very good point. Yes, because it may have meant what would our … I often sit and think what would our sport have looked like if we hadn't had some of those constraints. Maybe it would look very different if we'd had the big bang and everything had been thrown up out of the volcano. What would it look like? It might have looked very different from what it is today, because the modern sport is still – no it is difficult for people to understand, but modern athletics, you know it, you follow it; it’s still quite a set of compromises, and some of it is still – is suffused in that slightly Victorian ethos still.
Gabby: Of course.
Sebastian: Certainly some of the events.
Gabby: And I guess one of the other big bangs that happened in this country was the funding provided by the National Lottery. If you're looking at kind of markers of where lifestyles could change, and where people had the opportunity then to really dedicate themselves to their sports.
Sebastian: Yes.
Gabby: And that is different; every country has a different model, doesn't it, about how much state funding there is, or how much people get sponsorship that enables them to do that. Is it better for it, do you think, as somebody who experienced a very different system, do you look at the modern landscape for athletes and think you would've enjoyed the current status quo?
Sebastian: We had the National Lottery in place in about 1994. Ninety-six was probably the first time, but our games in Atlanta were pretty disastrous. And it was only really in about 2000 in Sydney that you could see the impact. So yes, I do welcome the National Lottery. I think Prime Ministers always thrash around for legacy at the end of their careers, and I always – I remember saying to John Major at the Olympic Games in London in 2012, “Look, I genuinely think your legacy is probably one of the profoundest legacies any post-war Prime Minister can lay claim to.”
Because the National Lottery really did fundamentally change the landscape in sport and culture, and certainly in the third sector. So it’s something I don't think he actually quite appreciates still the profound impact. We would never have had an Olympic games without National Lottery funding.
Gabby: Going back a little bit – and we'll get to London as well, but going back a little bit, when you were experiencing – you know, you were in the peak of your powers and you're winning back to back Olympic golds, you’re your – the absolute pinnacle of your career, those years there. Now you are sponsored, and you are able to take appearance fees, and things are changing, and the sports looks from the outside like it was – well it was millions of people were watching Friday night athletics, weren't they?
Sebastian: Yes.
Gabby: And it was really in its prime in that sense. Financially, at this point, you're pretty much focused on athletics, aren't you? This is your main source of income. So how much, at that point, did you think that this was – because it's like young footballers, young rugby players, young whoever they are that are earning money, how much were you thinking about the future, putting stuff away, trying to kind of protect for a rainy day? And how much were you living in the moment with all of that?
Sebastian: I think inevitably it was probably a mixture of everything. I caused quite a stir because I had a very interesting conversation with my father who would've been very – quite capable. He managed businesses, he would've been quite capable of managing that element in my career, but he was really clear that as my coach he did not want that responsibility. He saw it being an absolute conflict straight away.
Gabby: That was very savvy of him.
Sebastian: “I do not want to be …” You know, “I'm laying the schedules, I'm building a team around you; I will tell you roughly how I think you need to get from A to B, but I can't be sitting there worrying that the journey from A to B is going to get diverted because you need to do three appearances for Brand A, B, or C.” He said, “I do not want that problem.” So I actually was the first athlete to sign up with IMG, the McCormack Organisation, and that caused a massive stir in the British media because they said, you know –
Gabby: What was the problem? What did the media have as its biggest gripe?
Sebastian: Well, first of all, they didn't – they'd sort of assumed that the McCormack Organisation was only about rugby and tennis and golf. Not rugby, but certain tennis –
Gabby: American football, and … Yes.
Sebastian: – to golf and all the American sports, and there was a nervousness. There was a nervousness that this was going to pull the brick out of the dam. In fact, all it really did is it allowed me to focus entirely on the athletic side of it. And yes, the financial advisors there started to say, “Well you do need to think about a pension fund, and yes you do need to pay tax as well.” So I know that I’ve got friends that were in the sport that didn’t get that kind of advice and were – still are getting the knock on the door from whatever passed for Her Majesty's Customs and Revenue at the time, and yes, it was uncomfortable.
And there was this odd period where athletics meetings, particularly up in Scotland, used to get raided by the police if they thought that there was – you know, appearance money was being paid. So the best advice I ever had from my father was, “Look, we'll deal with the amateur code as and when we need to deal with it, but it's easier to deal with the British Athletics Federation than it will be her Majesty's Customs and Revenue, so we're paying tax.”
And so he actually created a small business, and we found a local accountant who helped – he became one of the directors – and we did pay tax. I always remember on the – I think it was 1981 in London, I think it was Lord Exeter's memorial service, and I got invited by – in London. I got invited by an Antonio Samaranch, the IOC President, who was grappling with the issues of what was how were athletes going to start moving into the new era. And my predecessor, again but one, Primo Nebiolo was also in the room.
And I was only in my 20s, and I’d just joined the Athletes Commission, and I remember Samaranch at this private lunch, throwing to me in front of the Federation President, saying, “What do you think the athletes think?” And I said, “Well, in fairness, President, I think the athletes would prefer not to be in this twilight zone. And yes, that probably does mean paying tax.” Well, you'd have thought I'd announced the slaughtering of the firstborn in every family. Primo, who had that Roman countenance, he went off like Vesuvius and looked at me completely like an imbecile, and he said, “Why would you want to pay tax?”
And that was basis at that moment, and that was what – you know, Samaranch was smart enough to realise that in order to make the changes he wanted to in Olympic sport, he needed to take the athletes with him. But there was still some quite reactionary forces out there.
Gabby: Your transition then into the world of work and politics – let's go to politics first, you were a Tory MP, and you also worked with William Hague to try and form a government.
Sebastian: Yes. Yes.
Gabby: In those years, when you’ve won gold medals and you've been a world record holder, and achieved the absolute pinnacle in your sport, a lot of people find that transition hard. How does real life feel, you know, to a lot of people it doesn't feel great. For you, was politics then an arena where you felt you would get that high octane response and feel like you were able to achieve something that could be even remotely comparable?
Sebastian: No, not really. It's a slightly depressing thing to actually admit, but I knew I wanted to be in politics when I was about 13 or 14. I was fascinated by it, and I used to keep a political diary. I know people are thinking, “What an anorak.” But I did, I was always interested in politics. I didn't come from a party political family; my father was old Labour and very socialist, my mother was an old-fashioned Liberal, a Joe Grimond’s school in Manchester Liberalism, and there was political debate around the table all the time. I mean, I'm old enough to remember they walked in the anti-Vietnam marches in London, they were both quite activist in their way. It was quite an interesting moment when I did tell them that I was throwing my hat in the ring potentially as a Conservative Member of Parliament.
And so for me, it wasn't really – I never saw it as a replacement; it's probably what I might have done earlier had my athletics career not gone on into my 30s. And I wasn't sure whether – I knew I wanted to be involved in politics in one way or the other, I wasn't actually sure. For a time I thought about becoming a political writer, or maybe broadcasting. I thought about the civil service for a time as well. So it was really when I – I was Deputy Chair of the UK Sports Council, and I found that a fascinating process because you’re just understanding the way government worked, admittedly in a narrower sphere of sport, and knowing the buttons to press and the buttons to leave well alone.
And I suddenly thought, well, actually, I really quite enjoy this, I'd like to do this at a constituency level. And then I ended up in Cornwall, which was a fascinating part of the world to be in. I never thought I'd get elected there because they kept telling me they never voted for anybody from outside the county, and they didn't like outsiders. And I'd reminded them I was brought up in a county that didn't much like each other up in Yorkshire, so it wasn't too complicated.
And then of course, we lost – I lost the … we got swept away by Tony in ‘97, and then I worked on William Hague’s campaign team to help him get elected, and then he made me his Chief of Staff for four years, so it was a fascinating period in politics to be in, for me. And I learned a lot during that period, but my political timing was slightly off.
Gabby: Did you though find any kind of mental – any challenge in terms of that transition from being so exalted and globally famous and high achieving into a world which can be brutal and doesn't necessarily respect those medals when you are in the debating chamber, or you are sitting late night discussing a bill?
Sebastian: Do you know, it's a really good question, and actually the honest answer to that is I actually felt a slight relief that I wasn't high profile again. It was an interesting process for me, and I always say this to athletes that leave the sport, do not assume that when you leave your sport, even as a world record holder, or a gold medallist, that you are going to walk into your next career at that level. You do actually have to regroup and go back.
So I went into the House of Commons as a backbench fodder. And in a way, I think because I went in with a reputation for having done something outside, it was probably even tougher. Because there was that sort of, “Oh, well.” I deliberately chose not to go for a safe seat because I knew that I would only get an accusation, oh I got parachuted into Surbiton or Esher or somewhere like that, so I chose a marginal in Cornwall which was a great five years. It wasn't career enhancing in the end, but I really enjoyed it down there.
But the thing for me, I think the thing I found most frustrating is that – and you know this from having played sport at a very serious level – everything is objective. There's very little subjectivity about it. In my sport it's a stopwatch, it's the result sheet. And I think the thing I found difficult in politics, and I still do, it’s just the arbitrary nature of preferment; you know, how do people come through? I mean actually statistically it’s tougher to become the CEO of a FTSE 100 than it is to become the Prime Minister. And clearly, given that we've had four in the last year or two, it's not the most exclusive club at the end of the year, is it.
Gabby: So you obviously enjoy, or it would appear you enjoy the process and the governance, and these are jobs that are admin, and being involved in that process is really important if you like sitting on committees, and debating, and all of it.
Sebastian: Well, I wouldn't go so far as to say I really enjoy sitting on committees, but it's sort of – it’s what you have to do. I guess what I like about what I do is that – and it's whatever you make of it – I actually enjoy being in the boiler room in an organisation. I enjoyed the nature of the London Olympic bid by being very hands-on, and then being hands-on in the organising committee. If I'm going to do something, I don't want to just be a name at the top of a headed piece of notepaper.
Gabby: You want to roll your sleeves up and get involved.
Sebastian: Yes, exactly. And I think, funnily enough, going back to the political grounding, that gave me a real – that was really, really helpful in maintaining what I like to think was, quite unusually for an Olympic Games anywhere in the world, it became very bipartisan. The games never became a political football, even around election times. I think one of my better achievements was to get all three political parties in 2005 to agree to the same two paragraphs in the manifesto, word for word. Because I knew that whoever triumphed, whether it was a coalition or whether it was a clear win, I wanted them all to have something in a manifesto that I could turn to and say, “By the way, guys, that's what you sold yourselves at the last election on.”
And we went through, we had different Prime Ministers, different Mayors of London, and a handful of Sports Ministers and Secretaries of State, but the one superstar in all that was really a good example of how politics at its best can work, and that’s Tessa Jowell, because she was the Secretary of State when we won, but she lost her role in 2010 but remained in the process as a really responsible opposition spokesman. And people like Jeremy Hunt and Hugh Robertson who had come through as opposition spokespeople also became well briefed ministers.
Gabby: London was such an incredible success on so many levels, logistically, the actual delivery of the event in terms of how it went, but also what it did to this nation in terms of pulling people together, and people who previously thought they didn't enjoy sport; you know, people who previously thought that they weren't into Olympic sport. When you’d had time to reflect, what was the thing you were most thrilled about?
Sebastian: Well, I don't want to make it sound too romantic, but I was – the sport was fantastic. And you've picked up on a really important point here, it was the public's engagement with the games, and that wasn't [an alloyed joy? 00:28:08] to start with. We were going to market with a concept that – you know, about [grand projet? 00:28:16] in the UK at the time. And remember, this was around 2002, 2003, we got The Dome, we got the overrun on the BBC, the Scottish Parliament. Wembley Stadium couldn't figure out whether it was football, rugby, or even track. But we actually – people forget, we had the 2005, or we were given the 2005 World Athletics Championships. We had to hand it back because Wembley wasn't ready, and they suddenly decided they wouldn't have a track, so we all went off to Helsinki.
So it wasn't the easiest sell at the time, but what I most liked about the games was I thought it showed the UK for what it really is, which is a country that was actually at that stage – I think things have changed – was at ease with itself. It was comfortable with its multiculturalism, it was open, it was expansive, it was proud and protective of its history and its heritage, but it was in a modern setting. And I suppose if that was the high point, I suppose the slight sadness of looking back 10 years and realising actually we could be doing so much better than we currently are in those spaces.
Gabby: You obviously had enormous success and great fame; another level of fame comes from delivering something like that. At the time, did you then think you could deliver something else? Obviously you could go and deliver another big event globally. Or was athletics and running the IWF, was that always something in the back of your mind that you thought you would like to do?
Sebastian: Well, this is an interesting day for you to ask me that question because I wanted to throw my hat into the ring for the World Athletics job, it was the IAAF job. And my predecessor, we thought, was going to step down in 2011; he chose not to and stepped down in 2015. And I was in the latter stages of making my mind up about that and thinking, “Well, that's probably going to be another decade or so of my life if I'm successful.” There was no guarantee; I was competing against Sergey Bubka who is very well known in the sport. And in the middle of all that, out of left field, I effectively got offered the Chairmanship of the BBC.
And yes, you might open your eyes slightly wider at that moment, and I did think quite seriously about it because I am a passionate believer in the BBC, I'm a passionate believer in public broadcasting. And it wasn't, at that stage, without its challenges, and I thought this would be – from a political background, this would be a really interesting period. It was the Chairmanship of the Trust.
I sat down with William Hague who literally said to me, word for word, “If you take that job, I will lie down in the middle of the road to stop you doing that, outside Broadcasting House.” And he said, “That is the most ridiculous thing I've ever heard you say.” And I said, “No, well it's an interesting …” And he said, “It’s an absolute poison chalice,” he said, “don’t go anywhere near it.”
Gabby: I should just say for – because people will listen to this anytime – that we're having this conversation about two hours, three hours after the Director General, Tim Davie, has released a statement after the weekend of Gary Lineker missing Match of the Day, and yes, and all the politics that that threw into the air over the last three days. So that's the irony of that.
Sebastian: And the questioning about the Chairmanship of the BBC in the same breath.
Gabby: Yes, of course, which has also, yes, been front and centre.
Sebastian: I can safely put on record that you had no idea I was going to actually answer that question in that way.
Gabby: No.
Sebastian: And so I then said – and he looked at me and said, “Look, athletics needs you more than the BBC. In the nicest possible way, the BBC will find somebody, but I'm not sure athletics can, and this is what you've …” “For as long as I've known you, this is what you wanted to do.”
Gabby: Was William somebody that you would regularly bounce off ideas?
Sebastian: Yes. And I still do. I still do. And particularly now, given his understanding of foreign policy, some of our issues around that we have to confront as a sport in the global setting is – it’s – you know, you couldn’t have a better – you couldn’t have better intelligence and tutorials. So yes, we speak a lot. And so what I [laugh? 00:33:05] with him, is I’d said, “So, OK, well I'll go to the IAAF for the quiet life.” And of course I’d been there two weeks and we had a police raid on the building. So the next two years were pretty horrible.
Gabby: Speaking of money, Seb –
Sebastian: Yes.
Gabby: – how, across all these incredible jobs, and we could talk and talk and talk and keep going about all the interesting things you’ve done, how much have you put things away, had pensions, looked after yourself for a rainy day should that come? Has that always – back to your dad's very, very savvy advice about taking an agent, it seems that you were …
Sebastian: Yes, to a certain extent, but I don't – I'm not squirrelling stuff away all the time on the basis that I'm going to be comfortable in my old age. I do actually think it's quite important to live for the day. I was reading a really interesting book of essays by Alistair Cooke, probably – personally, I think – one of the greatest essays of the 20th century, and the foreword to this – it was Reporting America – it was his letters, his letters from America from 1946 to 2004, literally, last letter he wrote just before he died.
And his daughter wrote a lovely piece, a foreword, to it, and she actually said that “I think my father found it harder to have money than not to have money.” And I think a lot of people are in – you know, sometimes get torn between that. I know an awful lot of people who have got an awful lot of money who don't obviously appear to be that happy. And there are people who I know are struggling to make ends meet who have, in a way, a slightly more balanced life. Obviously it's nice to be somewhere in the middle of all that.
Gabby: Thanks for listening to the ii Family Money Show. If you've got time, please leave us a follow in your podcast app and a review or rating. You can find loads of ideas on how to plan for you and your family's financial future at ii.co.uk. I'll see you next time.