A BID to save Jersey Reds from liquidation by securing further government funding was voted down by States Members yesterday, with ministerial concerns about the finances of the Island’s only professional sports team holding sway.
After the defeat of the proposition to provide additional financial support to the rugby club, which ceased trading last week, Economic Development Minister Kirsten Morel expressed sadness over what had happened, but repeated his view about “putting money into a financial black hole”.
There was bitter disappointment on the Reds’ behalf, both from the politician behind the move, Deputy Lyndon Farnham, and director of rugby Harvey Biljon, who said it was “difficult to comprehend” how the club could go from the highs of winning the Championship a few months ago only “for it to end like this”.
Having lined up to oppose Deputy Farnham during the debate, ministers remained focused on the impact on the public purse as they left the States Chamber.
Deputy Lucy Stephenson, the Assistant Minister with responsibility for sport, said the six-hour debate had been it has been really difficult for everybody concerned.
She said: “It was never my intention or government’s intention [for] Jersey Reds to cease trading – we never wanted to see that happen.
“It was about making sure, from our perspective, that public money – taxpayers’ money – is spent responsibly and fairly.”
Deputy Morel said the government remained unconvinced about the Reds’ ability to reach a sustainable financial footing.
“This isn’t against the Reds, it is against putting money into a financial black hole,” he said.
But Deputy Farnham said he considered the focus on cost to the taxpayer to be “a great shame” because of the benefits stemming from the Reds.
He said: “I tried to make a strong argument that for every pound we put in we get many more back – and it was a professional sport we could watch and was enjoyed by thousands of Islanders.”
At the start of the second day of the debate, Attorney General Mark Temple offered thoughts on an amendment by Deputy Moz Scott, incorporated into Deputy Farnham’s proposition, that representatives from the Treasury Department and the private sector join the Reds board.
Mr Temple said that even if these representatives were designated as advisors, if their advice was adopted by the board they could be perceived as “shadow directors” and face unlimited liability in the event of insolvency.
“This is a significant potential risk,” he said.
Following six hours of debate in the Assembly, Members voted by 29 to 13 against Deputy Lyndon Farnham’s proposition, which had also been amended by Reform Jersey Deputy Lyndsay Feltham to ensure a proper business case as part of the support package.
Other contributions to the debate included:
– Housing Minister David Warr citing the Bob Dylan lyric about the Reds staff being “pawns in the game”, but saying the proposed funding would leave government “acting as the banker in a casino”.
– Deputy Tom Coles pointing out that taxpayers funded diverse organisations such as Jersey Heritage, the Aquasplash facility, LibertyBus and Jersey Arts Centre – because there was a clear benefit, as with the Reds.
– Deputy Scott compared the levels of funding provided to the Reds to a body such as Visit Jersey, which she said had received £5.75million last year but achieved questionable benefits.
– Environment Minister Jonathan Renouf said the business plan drawn up by the Reds’ major sponsor, Santander International, contained “systematic optimism bias, more fairly called wishful thinking”.
– Previous conversations between ministers and Reds board members in the wake of £370,000 in emergency funding over the summer had made clear how unlikely further funding would be, Treasury Minister Ian Gorst said. He added: “I don’t understand how anyone could have been in any doubt”.
How they voted
For (13): Deputies Alves, Coles, Farnham, Feltham, Kovacs, Mézec, Porée, Scott, Southern and Tadier; Constables Crowcroft, Johnson and Troy.
Against (30): Deputies Ahier, Andrews, Bailhache, R Binet, T Binet, A Curtis, Doublet, Ferey, Gardiner, Gorst, Howell, Jeune, Le Hegarat, Luce, Millar, Morel, Renouf, Stephenson, B Ward, Warr, and Wilson. Constables Honeycombe, Jackson, Jehan, Labey, Le Sueur, Lewis, Mezbourian, Shenton-Stone and Vibert.
Deputy C Curtis abstained, while Chief Minister Kristina Moore declared an interest due to having a tenant who would be materially affected by the outcome.
Deputies Labey, Miles and R Ward were absent on States business, while Deputy Ozouf was unwell.
– Harvey Biljon confirmed that a relief fund set up to help former Reds employees would close this Friday so that the proceeds could be distributed. He asked anyone wishing to contribute to use account 20086850 and sort-code 16-51-71 in the name of HB10 Limited (Staff welfare).