Monday, 13 October 2014

Coventry - right or wrong ?

KNo matter what anyone thinks Wasps are moving to the Ricoh Stadium lock, stock and barrel. This move will be completed in about 18 months when training facilities are ready. Then Wasps will be a Coventry based Rugby Club. 

Now Wasps have moved several times during the professional era but never had their own stadium. Here I should show my colours. Moving within region, and by region I mean designated Academy region, I have no issue, however moving outside of region i fundamentally disagree with. There is no regulation with Community development programmes and here lies the problem. Currently any team can up sticks and move. Their is no governance and we therefore must draw the conclusion the PRL/RFU by their desire with lack of control support this action.

We must also accept that employees will publically at least support any move. We will not find out until much later what they really feel when they have to move their families, change schools, stay farewell to friends etc when the training ground shifts. This scenario will come much quicker, immediately, for community development employees and some office staff. Rugby players have short careers and they are mostly concerned with being involved in a successful, supportive environment and of course one that can pay the wages.

The club management have described the clubs position as a "live or die" situation. Suggesting that between these two extreme positions there are no other options. Well the "die" scenario is certainly not true. The Wasps name will live on whatever albeit for some supporters, which I fully understand, have only known and are interested in the professional arm of the club. So although "die" is an inaccurate description it also fails to offer the many options between the two extremes. The movement down the leagues (which would occur) could be done in a controlled manner, eventually finding a level where the business is sustainable - fully, semi, part professional or completely amatuer. Maybe not very palatable for many, but it is an option many others have taken. Another possible option sit with the RFU which could step in a take over control of a club which they most likely regret not doing back in 1995 where they were advocating setting up 4 professional regions. This position supported by the likes of Lawrence Dallaglio at the time. Things have now moved on, however, I think if England could take control of 4 regionally based clubs now they would, let's say, consider it. The fact of the matter is the rugby business model after 18 years of development does not make money, the support at the turnstiles is not there. Only some models cover costs.

The model Wasps have followed has been the least productive model on the balance sheet. However it is not dissimilar to the successful ones, only the balance sheet, accounts present it in a different way. We must be hugely appreciative and grateful to the owners contributions over the years. Each have been trying to establish a structure by which the club can stand on its own two feet. Effectively they have been transferring funds from their existing business activities via their own personal wealth into Wasps accounts by way of loans and guarantees. The successful model simply creates a business directly connected with the club. Most often this is via ownership of a stadium and now in our case via ownership of the management of a stadium. The successful models presented by PRL would be Leicester, Gloucester, Exeter, Northampton and Harlequins. These make small profits based on their large support bases and stadium corporate business returns. Not sure about Saracens and Newcastle but both own stadiums but support bases are smaller and result in losses, I think. 

Wasps move to The Ricoh Stadium is different from all these models, more similar to Saracens but unlike that of Leicester, Gloucester etc. It looks like, smells like, works like, branded as and is primarily a football stadium, the home of Coventry City FC. It is not a Rugby Stadium in the fashion of Northampton, Quins etc. We will receive income from the running of this Stadium, as yet the figures are unclear as there is still 50% of the ownership to be resolved. However Wasps could have simply taken control of the running of the Stadium been supported by the revenues of the Stadium and remained at Adams Park or decided to play "big games" only at the Ricoh, Twickenham being too big with about 45,000 required to break even. They could have bought or been bought by a business anywhere in the country, the world and remained at Adams Park, similar to Saracens. The gamble for Wasps is by moving the playing venue this will significantly improve the current Stadium business model, improve revenues generated by the stadium and generate a much larger support base. It needs to at least double the current support base. This is very unlikely with some of the most heavily supported clubs in the close vicinity. However it is extremely likely the move will improve existing returns from the Studium use. But for this to make Wasps profitable we need to know what percentage will go to Wasps? It seems to me and I would suggest also the Club management, as they have already indicated, CCFC will get a better deal than we get at Adams Park and want to help them progress towards the Premiership !!!!  Further to that CCFC could also end up as joint owners with a 50% stake. Whatever happens the important issue will be to increase the Football revenues and increase Football attendances. We are moving into Football Stadium first, none of the other Rugby business models have this.

If we remained at Adams Park we would have to continue paying rent and only get 15p from every £ spent. What the profit margin is on that £ spent is unclear - 40p ? -  said like this 15p doesn't sound so bad. What will be the return on every £ spent at the Ricoh - well I would estimate 20p with a 50% stake. I don't know, would be good to know. Of course we would stay in our region, maintain all the partnerships and our support. It would mean we would not generate so much profit but it would provide time to continue to look for another venue. A better venue, a bigger venue than Adams Park. Saracens are supported by a business from afar and have done just this. Derek Richardson has driven this process and shown fantastic support for the club. However it is our CEO ( throw the eggs at me) and Board who make these decisions. Has this scenario even been considered ? Why have we decided to leave our historic homeland, buy and move into a Stadium that is quite clearly the home of the football club from that city. Other options did/do exist, it is simply not a case of "live or die". Only comes close if Derek Richardson has presented the Club with a "do this or I am off" position and hence has ruled any other options out. We would then go into administration and need to deal with the options as they present themselves. Nobody really knows what this would be. It would of course be painful.  Equally it could present opportunities that before have not been considered. We simply do not know. Mark Rigby stated 3 years ago that moving the club outside of its heartland region was "God forbid" not a option to be considered. Earliest links are reported in newspapers go back to August 2012. So this is not a sudden development.

Moving outside our region to me is not an option to be considered for Wasps or any rugby club. Every supporter will make their own mind up about how they feel. Not a problem.

For me rugby, sport is about working together and dealing with problems as they arise, working hard to develop. The success on the field is the goal, achieved collectively. Individually all then benefit. The greatest fulfilment for players, coaches and supporters is felt by achieving success in the face of adversity, as we most likely saw on Sunday v Bath. It is not about, should not be about which clubs have the most money and can attract the best players and hence win everything. This success for me is hollow. Rugby needs to maintain as far as possible a level playing field and this is very much the role of the PRL and RFU. PRL officials commented several years back about how I would feel about Wasps being the first franchised club. The PRL and RFU have been very quiet since the announcement was made. Clearly they want all clubs to be sustainable in order to grow their product and provide security for employees. However they also need to protect the integrity of the game, it is that that makes the game for most/many. Simply for me this is a step too far, goes against the basic principles of sport and indeed rugby.

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