THERE was passionate debate inside the States Chamber yesterday, with Members discussing the financial future of the Jersey Reds as they considered a proposed rescue package for the stricken team.
Economic Development Minister Kirsten Morel compared the rugby club’s finances to a “financial black hole” as he detailed what he described as a years-long track record of “weak” financial management.
In a statement read out in the States Assembly yesterday morning, Deputy Morel also revealed that the club had suffered a cumulative loss of £2.6 million – and that since early 2023, the Reds had been given extra time to pay outstanding tax debts totalling over £450,000.
A report published with the government statement also broke down the £1.7m in funding that the team had received from successive governments since 2019.
Reds board had “no appetite to change business model”: CLICK HERE
Deputy Morel said it was “deeply regrettable that, despite this significant financial support, Jersey Reds have not been able to reach a stable financial footing”.
After enjoying the most famous day in its history at the end of last season, when the Reds won the Championship title for the first time, the Island’s only professional sports team ceased trading last week, saying liquidation appeared “inevitable unless a solution can be found in the very short term”.
Reds fans gathered in the Royal Square, outside the States Building yesterday in protest, with the rally’s organiser, Dominic Boletta, saying it was “absolutely insane” to think Jersey could no longer have a professional team.
After ministers refused to provide more money, having already supplied a £370,000 emergency cash injection this summer, Deputy Lyndon Farnham – under whose time as Economic Development Minister the Reds received hundreds of thousands in grant funding – launched a bid this week to get them to reverse their position. The debate began yesterday and was due to resume this morning.
Deputy Farnham estimated that each pound spent by the government to support the Reds brought around £25 in economic benefit to the Island.
Deputy Farnham said that over the past seven years an average of £150,000 had been provided to the Reds by government each year – around £1m in total – while different studies had suggested an annual benefit of £2m (in 2016) and £5m (in 2022).
The “soft” benefits included attracting a large number of visitors to the Island, mainly during off-peak months, Deputy Farnham said, with thousands of seats on aircraft being taken up by visitors.
Deputy Montfort Tadier said he was pleased to support the proposition, as amended by his Reform Jersey colleague Deputy Lyndsay Feltham – whose change would ensure a proper business case was part of the support package.
The Reds was “not an ordinary company”, Deputy Tadier said, referring to the “underlying social value” of the team and the need to “keep this wonderful project afloat”.
Deputy Andy Jehan said the report accompanying the proposition contained a “lack of source information”, and said the Reds should explore a part-time model, like other Championship clubs.
Constable Karen Shenton-Stone said that the description of the Reds as the beating heart of the Island was a misnomer.
“The last game had an attendance of 1,800, and the population is 110,000,” she said. “If my beating heart was working at 1.8% I would be dead.”
Commenting earlier in the sitting while delivering his statement, Deputy Morel said: “These grants were intended to provide the club’s directors with the opportunity to find new investment and draw up a sustainable financial plan.”
He added: “Unfortunately, the plan that was offered relied upon speculative monies from the RFU, showed income being gained from assets that are not the Reds and offered little in the way of cost savings.”
A funding tap of hundreds of thousands from 2019 to 2022 dried up earlier this year when the Reds wrote to then government chief executive Suzanne Wylie requesting urgent funding of £250,000 and a further £250,000 to follow.
Deputy Morel said that Deputy Lucy Stephenson, who has political responsibility for sport, responded that it was not possible to underwrite further support.
He continued: “Members will note that the Reds were urged to manage their expenditure appropriately and that Deputy Stephenson offered to meet in person, but this offer was not taken up.”
Along with further emergency payments earlier this year to cover wages, he said it was also “agreed that Santander and government undertake a contemporary review of the club’s finances and consideration of its viability in the medium to long term”.
This, he said, “allowed time for the directors of Jersey Reds to assess their options, raise new investors and present a valid case for support to government”.
He continued: “Despite not being able to pay wages, the club announced in the media that it had hired a new member of the coaching staff at the beginning of September. I have to question such decision-making by the club, when I believe it knew at the point of hiring that it did not have the funds to pay salaries.”
In a meeting on 19 September, ministers decided that “it was not appropriate to provide further public funding because there was no evidence that the Reds would become financially sustainable in the future”.
