Ahead of the start of the 2019-20 season, Scarlets chairman Nigel Short chatted to The Rugby Paper in an extensive interview highlighting the positive strides being made on and off the field at Parc y Scarlets.
Here is the Q&A in full.
Q: It’s been well documented that CVC may be getting involved with the Guinness PRO14. How much of a financial boost would that be for the Welsh regions?
NS: Well there’s certainly a lot of speculation about external investment, but we need to wait to see what actually happens before we consider any impact. Any investment into PRO14 is a tremendous vote of confidence and will potentially provide a significant uplift for all the PRO14 clubs, but the really important point is that the investment that’s already been made in Premiership Rugby plus the multiple investors we hear are interested in PRO14, Six Nations and World Rugby all add up to an incredibly exciting and positive period for the game. The critical thing for every one of us is to absolutely ensure any additional revenue is invested wisely for the long term.
Q: Can we ever close the gap with the English and French clubs?
NS: Well that depends on both sides of the equation – revenues and costs. The English and French clubs generate more local revenue from bigger conurbations, with much bigger populations and business density, but the significant revenue in professional sport is from broadcast, which can level the field. So, with a continued improvement in broadcast revenues, together with a robust cost cap mechanism to ensure jeopardy and protect the integrity and value of our competitions, there’s no reason why not.
Q: It has also been mooted that a British & Irish league could be in the pipeline. Do you see this happening and is this the right way forward in the long run?
NS: The idea of a British & Irish league structure has been in the pipeline as long as I can remember! Of course, it could make sense structurally, but at a practical level it would need to generate enough additional value to appeal to all parties involved, including club, union and private equity stakeholders, so it’s not so simple in the short term. Personally, I’m a real enthusiast for PRO14 from a rugby point of view. Remember, it’s the only club competition with 50% of the tier one rugby nations participating, which provides fascinating differences in playing styles; so for me it’s vital we continue to build and improve PRO14 as a strong competition in its own right – one that is already strong enough to attract serious external investment.
Q: Ten years ago, I think it’s fair to say the Scarlets were in a difficult financial position. What’s the current situation off the field?
NS: It’s pretty difficult to disagree with that statement as the facts speak for themselves. The current situation is very different. Since 2010, we’ve increased the net worth of the business from a negative £5.54m to a positive £2.57m, an improvement of over £8m in the business value and steadily moved from a heavy loss in 2010 to a small profit for the year just ended – all of which will be re-invested on the field. We cannot underestimate the support of our original shareholders, the board and the constant effort of everyone in the business to get here and we certainly cannot relax, but the club is now secure for the future.
Q: How have you managed to turn a poor financial position into such a strong one?
NS: By working relentlessly to build the club into a sustainable business that is not dependent on any individual. We have more than doubled our local commercial and retail revenues and driven cost efficiency across the business. Our absolute focus and hard work on player development has ensured we deliver more international players to the national squad; a dramatically improved working relationship with the Welsh Rugby Union has resulted in substantially increased investment in the professional game in Wales and the PRO14 executive have done a great job of doubling their revenues and our distribution over the last four years. We’ve built a very strong board, an experienced executive team and at every step of the way the board has ensured we live within our means, while investing all we can in the academy, development, coaching and the playing squad.
Q: So, what is the strength of the board, who are the board members?
NS: We already had a very strong board in 2010, with four people, all running very successful UK and International businesses, who had achieved considerable success on the field, delivered one of the best club rugby facilities in Europe and set the direction in place that would secure the future of the club.
Thankfully, those people are all still very much part of the board, involved in every aspect of the business and incredibly committed to delivering a real legacy to West Wales. I joined the board in 2010, again with a background in running a market leading multinational and since then we have added a top international commercial lawyer, one of the most senior management consultants in the UK, the chairman of the multinational that owns Sunset & Vine, the leading sports broadcast producers, the chairman of a global purchasing consultancy, the owner of a Wales-based financial services company and the chair of a very substantial West Wales business that does more to support local rugby than any individual I know.
We made the decision five years ago to appoint a representative of our supporters trust Crys 16 to the board, along with a representative of our county council, to make sure the view of the biggest emotional stakeholders in the business help us make the right decisions. That’s because it’s not just about the make up of the board, it’s about how we make decisions, so we constantly review our board performance and governance. We will always work in the Scarlets way, but we refer to UK Sport and Sport Wales guidelines and we benchmark best practice, which in UK Rugby is clearly Exeter Chiefs, a real example of sound business management in professional sport.
Right now, we are reviewing our governance to devolve responsibility in key areas to key board members, allowing me to concentrate more on the senior rugby side. It’s critical to understand our board members are there to run a sustainable business and although they will always help in difficult times, Scarlets should not be a benefactor model. That’s why everyone on our board takes their responsibility to the wider community and grass roots game in West Wales very seriously indeed and why the Scarlets Foundation has now been registered, to provide a vehicle that is dedicated to further developing our support for the community game.
Q: Do you see the Scarlets financial position strengthening even more over the coming seasons and are there plans for further investment?
NS: As I said, we focus relentlessly on running the club as a sustainable business. With any business it’s essential to continually re-examine everything we do, improve our financial performance and invest wisely. We have just invested half a million pounds in a new state-of-the-art hybrid pitch and a further £150k in our indoor training surface.
Q: How much of a positive step forward is the Professional Rugby Board (PRB)?
NS: It’s important to recognise the establishment of PRB is a major structural change, which I believe will have a very positive impact in the medium to long term. The new agreement with the WRU finally puts all parties to the professional game in Wales around one table, with the balancing input of three appointed non-executive members, including the chairman, working within a legal framework that provides the authority to take decisions for the good of the game. It’s a very positive step forward.
Q: Last season there was a huge delay in players signing contracts because of Project Reset. Is there a danger of that happening again this season?
NS: The new agreement was a very complex legal structure to finalise and put in place so that caused the delay. Confirmation of funding and recruitment for this season was pretty much completed before the end of last season and the timing of recruitment for the 2020-21 season is clear, so with PRB working effectively, there should be no reason for that to happen again.
Q: Are there any plans to further strengthen the squad next season and in the coming seasons?
NS: We continually work on a succession depth chart for all positions to make sure we have the right level of strength in depth across the park, particularly in International windows. We are 99% complete for this season but we will be making some further recruitment and have retained the budget to do that. As always, our priority is to develop local talent, which is why we continually seek to develop our development pathways.
Q: Can you see the Scarlets challenging for silverware in Europe?
NS: Absolutely. Our quarter-final against La Rochelle was an incredible occasion for our supporters, sponsors, coaching group and squad, so we are hungry for more. We were disappointed with our semi-final performance in Dublin, but we recognise that every club that has enjoyed consistent European performance has had tough lessons along the way. We intend to learn from those lessons.
Q: What are the on field and off field targets over the next five years?
NS: Off the field, we need to continue to consistently achieve our business plans – that will ensure the strength of the club beyond five years. On the field, we have targets to grow our player and coach development and reach the knock-out stages of both the PRO14 and Europe consistently.
Q: How excited are you by the new coaching group?
NS: First, I need to recognise the contribution of Wayne, Stephen and Byron in firmly putting Scarlets back on the map, winning the PRO14 and reaching a European semi-final. Our new coaching group has a tough act to follow! But yes, I’m excited and energised by the change, as are the players and everyone in the business. We’ve evolved our coaching strength and playing style considerably since 2010 and we believe Brad and the group he has put together are a great fit for our philosophy and will deliver the fast moving, running rugby every Scarlet craves to see.