RFU Goes Ever Further Up Sh*t Creek

[Rossm]

From today's Telegraph:

RFU finances hit by new seven-figure blow as England Sevens sponsor goes into administration

The Rugby Football Union’s troubled finances have been hit by a fresh seven-figure blow with the news that the principal sponsors of the England Sevens sides have gone into administration, Telegraph Sport can reveal.

It is understood that Secure Trading, a company that offers payment solutions to businesses, went into administration last month, with a payment to the RFU of over £1 million still outstanding.

The RFU is currently in negotiations with the company’s administrators PwC, but it is believed that the governing body does not expect to receive any of their outstanding payments. Secure Trading and PwC declined to comment.

Secure Trading’s name was still emblazoned across the England Sevens players’ shirt at last weekend’s London Sevens and will likely to be again for the World Series event in Paris this Saturday but the decision not to remove it is thought to be only for ‘practicality’ reasons.

Secure Trading also tweeted their support of the England Sevens side as late as Apr 15, just a day before PwC were appointed as their administrators, writing: “More Fantastic result for the England Sevens team in Singapore this weekend! Next stop, rugby HQ! #ProudSponsor”

PwC, in a letter dated May 24 to suppliers and creditors and which has been seen by Telegraph Sport, stated that “UC Group Ltd and Securetrading Group Ltd” who own the three operating companies Secure Trading Limited, Secure Trading Inc and Secure Trading Financial Services, had gone into administration.

The news could not have come at a worst time for the RFU, which has just been forced to make combined cuts over around £8 million to the professional and community game in their business plan for next year. Losses of over £10 million also forecast because of the costs of playing in the World Cup in Japan and absence of autumn Test matches at Twickenham.

Secure Trading signed a four-year deal in May 2017 to be the “principal partners” of the England Sevens side and also sponsor the RFU’s amateur Sevens tournament called ‘24/7’.

Their rugby connection also extends to sponsorship of National League One side Old Elthamians while in January it was announced the company had been chosen to work with a cannabinoid oil business run by Saracens and England lock George Kruis and his club team-mate and Wales international Dominic Day.

It is thought that the loss of revenue will not have a direct impact on the RFU Sevens programme, given that it would have to a central pot, but still represents a major blow to the governing body’s already alarming finances after it was forced to make 63 redundancies last year.

In March, Telegraph Sport also revealed that the RFU faced a multi-million pound bill to replace the roofs of three of the four stands at Twickenham Stadium.

It also leaves the RFU with the challenge of finding a new sponsor in a tough economic climate for sport given the uncertainty of Brexit.

The Sevens programme is already braced for severe cuts next season at a time when England have failed to secure one of the automatic qualifying positions for the Olympic Games in Japan next year.

England are the nominated side to qualify for Team GB, who won a silver medal in the inaugural Olympic Sevens tournament in Rio in 2016, and now must win the regional event in Colomiers, France in July to secure a place. 

The RFU insisted last night that the expected loss of revenue had already been factored into their business plan for next year, but as it does not start until July, the deficit is then likely to impact this year’s accounts.

An RFU spokesman said: “We have been in dialogue with Secure Trading and their administrators.

“We were planning to end the deal at the end of this season and have already built that into our financial planning. We are actively working on getting a new partner on-board.”

[Chunky24]

Notice they are putting men and women teams in the new Rugby X tournament as well when grassroots investment is still being cut.

[Neils]

If ever there was a "not fit to govern" organisation this lot run parliament damn close.

[Nopace]

Where has all the money gone? 3 AIs and 3 6n matches, £6m a pop on ticket sales alone. Beer and food, advertising, TV rights...

Something aint right.

[BG]

Don't they also receive membership fees from every club in the country?

I think they wasted money on developing the East stand (or is the west stand) which ran into £30m or £40m which they will never recover that investment from given how infrequently Twickers is used

[Brandnewtorugby]

Would love to see the business case and due diligence for the East stand work at Twickenham, that was a tasty contract to win. The RFU employ about 500 people, I remember reading about that last year amid the reports about the council decideding to keep the generous travel allowance for international games, but cutting 100 jobs. I count 23 people on the executive and board.

[mike909]

Would love to see the business case and due diligence for the East stand work at Twickenham, that was a tasty contract to win. The RFU employ about 500 people, I remember reading about that last year amid the reports about the council decideding to keep the generous travel allowance for international games, but cutting 100 jobs. I count 23 people on the executive and board.

I'd like a view of that - my jobs have included viewing business plans in the public sector to support the statutory auditor....given the public data...I might have been recommending an interesting report by the auditor had this been at a local authority!

[westwaleswasp]

Yet the feeebies keep flowing like politician's expenses on speed.

[mike909]

Yet the feeebies keep flowing like politician's expenses on speed.

The key problems could be governance arrangements. A local council would not be able (legally) to throw money around like that and would be subject to oversight and review. The RFU appears to lack much in the way of having to justify its actions to anyone

[westwaleswasp]

Spot on, sadly...

[BG]

I presume the RFU doesn't receive any central govt funding (perhaps with the exception of Olympics 7's) so they are only answerable to their members and I'm presumnig the members (regions/counties) are represented by the 57 (or is it now 53) "old farts".

These are the people that just voted against having their freebies cutback so these people aren't going to generally vote against "executive" level decisions.

I'm sure there are 100's of RFU administrators around the country doing good work but who are the people making decisions on multi-million £ projects that seemingly only benefit the few at the top of the structure at Twickers?

As a side issue Haskell keeps mentioning that himself and Hartly are going to set up a rival players union to the RPA (he says it partly joking but I suspect he is also partly serious), his argument being that because the RPA is partly funded by the RFU that they can't always have the best interest of their members at heart

https://www.youtube.com/watch?v=pyFAyoEwODU

In his last podcast he and Dan Leo discuss this and other things regarding pacific islanders players and their relationship with their own unions. Its quite eye opening the gulf between the haves and have nots

[mike909]

You are correct about the RFU - they are answerable to members - but as you say - that's hardly scrutiny! As a private club - they only have to comply with procurement regulations and that's fairly slack when its not a public authority or limited company

And they cam comply with procurement regulations - but still not have to justify the expenditure in a business plan to anyone other than presumably the 57 old farts...

From their site

The Rugby Football Union is the national governing body of rugby union in England and a Co-operative and Community Benefit Society, a legal status which means that it operates to reinvest all profits back into the sport.

This is mainly to avoid tax presumably.....and

The Union has a Board of Directors appointed for three-year terms of office, with maximum time limits. The inclusion of independent non-executive directors is stipulated in the RFU’s Rules, with the role of Chairman also open to an independent person elected by the Council.

The NEDs are part of scrutiny - but without a clear view of the operating rules - its hard to say if that is effective....and the list of Directors is not inspiring from a commercial POV (imo only, of course!)