Rowe issues stark warning
By Mark Stevens
Exeter Rugby Club chairman and chief executive Tony Rowe OBE has issued a stark warning that unless crowds return and incomes levels are restored to something approaching normality, there is a real danger that some Gallagher Premiership clubs may well go bust.
With the Chiefs and the other 11 clubs inactive since March due to the outbreak of Covid-19 around the globe, Rowe believes the true impact of the pandemic on club’s finances is not being appreciated within the wider rugby community.
Despite being the Premiership’s only profitable club, the Chiefs – like all of their rivals – have taken a huge financial toll already with Rowe outlining that the Devon club lost £3m during the months of April, May and June – and that they are continuing to hemorrhage around £1m a month.
In recent months clubs across the Premiership have done their best to try and stem the continual flow of losses, but with crowds unable to return for this week’s restart fixtures, corporate and hospitality facilities unavailable and the Rugby Football Union slashing their lucrative deal with top flight clubs, Rowe believes the effects of Covid-19 could prove catastrophic.
“I don’t think the rugby fraternity realise how much clubs are losing and it’s currently costing us just over a £1m a month to keep operating,” he said. “We still have to maintain all the infrastructure, as well as the playing side, so it’s been incredibly difficult.
“Sandy Park, as a business, has already had to cancel over £1m in corporate business from banquets, conferences and dinners and right now I can’t see when they will come back, so it’s eating into our reserves pretty quickly.
“Everybody has held up Exeter as the ideal business and a profitable club because we have Sandy Park Conference and Banqueting that pays the day-to-day bills and then we have all these bums on seats for match-days. However, for the last five months that’s been a millstone around our necks. At the moment, we can’t earn any revenue, yet our outgoings remain the same!
“What was to a degree our ‘golden goose’ in having Sandy Park pay the bills and the overheads, whilst the match-days were the big earners, both of those income streams have currently gone.”
Although Rowe has various plans in place depending on how the Covid-19 situation develops, the need to get the business back to some normality on all fronts remains a huge priority for him and his fellow board members.
“Central funding is made up of TV, league sponsors and RFU money, which covers some of it,” he explained. “However, the bigger money comes from bums on seats and if we can’t get spectators into the stadium, we’re all going to be in trouble.
“Most of the clubs will have worked out how long they can survive, but if we can’t get some decent revenue coming in by the New Year, we’ve got serious problems. Here at Exeter, because we have been commercially sound for the last 20-odd years, we’re fortunate we’ve been able to lean back on some of our assets to help raise the funds we need to keep going, but I do fear for some of the other clubs.”
With the Chiefs set to resume their 2019/20 season this Saturday at home to Leicester Tigers, the sight of rugby returning at least in this immediate form is a major positive from which clubs can look to rebuild.
Certainly, future season ticket sales for the 2020/21 campaign are another encouraging sign for Rowe, even though he continues to feel somewhat ‘helpless’ amid the current crisis.
“I can look at things here and say ‘don’t do this or don’t do that’, but with what’s happening I can’t do anything to fix things,” said Rowe. “We are in a situation that is not of our own making and we can’t get out of it until the Government says we can – or we get some kind of vaccine.
“Next month we had to refund those people who asked for their money back from tickets sold this season. Thankfully, there were a number of season ticket holders who gifted their money back to the club and for that gesture we are incredibly thankful.
“Our pre-sales for season tickets next season are also good, over 80 per cent, but that all hinges on us getting people in for the start of the season on November 20. If that doesn’t happen, we’ll be paying more money back and there will be no light at the end of the tunnel.”