A Statement From The Centurions' Chairman
16 August 2012
At last night's Fan's Forum, the following statement from Leigh Centurions Chairman Keith Freer was read to the attendees.
"I must first tender my most sincere apologies that I am unable to attend the Fans Forum on the 15th August. It was always my intention to attend the Fans Forum. I do believe that the Fans Forum is a vital part of the Club going further forward. I think the Forum provides an ideal opportunity for me and the Board to explain to the fans and the community where we are. It provides the transparency that is required so that everybody understands what we are doing, how we are doing and where we are going to. The benefits of this transparency can be clearly seen by contrast to the events that took place at the Bradford Bulls. Obviously when they made a cash call asking for some £500,000 which was raised by the fans in Bradford, which was tremendous, they did not appreciate the extent of the financial problems within the Club. I think if they had followed a similar path that we have followed in being transparent about the finances then the resultant administration could have been significantly different. Therefore it does sadden me that I am not able to directly answer questions that arise on the evening.
What we have managed to achieve in the past 12 months and our expectations for 2013 and beyond.
In the past 12 months, the Board has been able to re-evaluate and re-calibrate the structure of the Club to the extent that we are almost self sufficient and sustainable. The problem that we face this season is that we have had no central distribution from the RFL. This means that we have had to run without the £100,000 cash that would normally come in from the RFL. Everybody will remember that those monies were utilised to discharge the outstanding tax and the players’ wages from last season. We have consistently been able to manage the Club within its bank facilities that was originally agreed in August 2011 of £100,000 facility. As with all overdrafts, our bank wishes to discuss our facility and I am in the process of those discussions.
Once the season commenced it was anticipated that attendances would be hopefully be averaging around about 1800. Unfortunately, attendances have fallen below that due to the economic recession in the area. I think it is right to say that average gates are in the region of 1500. This means that in terms of my projections for the 2012 season, my projections are over stated and now there is a shortfall in terms of income of at least £30,000. You will recall from the original figures that I was hoping that we would make a reasonable profit at the end of this year this has now been reduced. The true position as it stands at this moment in time is that we are likely to break even at the end of the year. However, during the year we have been able to discharge the liabilities from the previous 12 months and built a solid foundation for 2013.
Everybody will appreciate that there have been savings that we have had to implement this year, most of which have been of necessity and perhaps the biggest one that we have had to endure has been the community department. It was certainly envisaged in 2012 that the community department being run independently by Leigh Youth and Community Trust. However, due to a number of issues that unfortunately has not worked. The consequences is that the Trust that the Club set up now runs independently of the Club and is a standalone community trust.
We do not have any control or responsibility for that Trust. That creates its own problems for us going further forward. But I think it is important for people to understand that there is this now separation. To meet our community requirements regarding the Rugby Football League we are now in the process of re-establishing our own community structure. This is being involved under the stewardship of Trevor and he will address you further. The finances of the Club have therefore been based upon the income that we derive from gate receipts, from sponsorship, match day sponsorship, and the significant contribution we receive from LISA, the contributions from the corporate sponsors /the Touchdown Club and our own lottery.
These contributions which are probably in excess of £100,000 form the bedrock along with the other income streams program sponsorships, shirt sponsorships provide us with significant income stream. Next year we will also have the central distributions from the RFL. One thing that I have been able to achieve with a great deal of success is the integration between the Club and Leigh Sports Village. This has meant there has been far greater cooperation between the two organisations. It means that indirectly the expenses that we would normally have to take responsibility for ourselves have now been able to in part be deflected. This key partnership we have with LSV is of significant importance and again I will make comment later. The finances have been steady throughout.
The success of the players on the park has brought additional revenue in terms of the Leeds game which was vital. That to some extent helped to address some of the shortfall However, when I did my original budgets I did not plan to incorporate progressing to the playoffs. But as you will all recognise the performance by Paul and the players this season has been fantastic. We cannot praise highly enough is the commitment of the players and the coaching staff. The level of performance has been superb. I think the performance at Keighley last week demonstrates this. To go to Keighley and to nil them by 26 to nil was an outstanding result when you consider they were the strongest defensive team in the league until our arrival. I think this puts a good benchmark down for the last 3 remaining games against Halifax, Keighley and Swinton. If we can win those 3 games then we are almost guaranteed at least one more home game in the playoffs if not 2.
There is a high degree of optimism that performance levels can be maintained and being able to avoid injuries this is the real critical factor for a Club as we operate on a small squad is that we have the capabilities of reaching the Grand Final. Success in the playoffs and success in reaching the Grand Final would again have a dramatic effect on the finances of the Club, demonstrating to all that we have reached sustainability. The current problem we face is cash flow, like in all businesses this very much depends upon the income being received, being able to generate sufficiently to meet its monthly and weekly expenditure. We have achieved this up until the end of July and within the overdraft facility. As discussed previously, I am currently speaking to the bank in order to address that issue.
The bank has required a more detailed budget which was provided to them on 9th July. In addition to which they have also asked us to prepare a detailed budget for 2013. Therefore, we are facing a very difficult period. I feel it is important that everybody keeps their efforts focused on bringing revenue into the Club. Hopefully the gate attendances at Halifax and Keighley will be higher than what they have for the previous games. Admittedly the Keighley game is on a Thursday night but this is obviously a rearranged game, it was the only time that the game could be fitted in to make it work for both clubs. But if we can increase our attendances on those last 2 games that will give us a little bit more cash. We will always have to look at our community to provide additional funds to enable the Club to work its way forward over the next few months. Next season, as indicated, we have the additional income from the RFL, in addition to which we have moved to a 14 team competition there are 4 more home games. Provided we get the pricing structure for the tickets next season right and the sponsorship packages right, and the corporate opportunities right, then we will have achieved the ultimate aim of being self sufficient and sustainable.
But an integral part of that picture is our very close working relationship within the partnership of Leigh Sports Village. I cannot stress enough that the partnership that we have created is fundamental to our success. I know in the past that fans and organisations have been quick to complain about Leigh Sports Village and the cost. But I can say to you categorically today that without their support the future for Leigh Centurions would have been significantly bleaker than it now is. Paul has started recruiting for next season and has made a number of signings already to keep some of the players that I signed last year here again for the next season or two. Paul’s involvement as head coach has been outstanding. He fully understands the finances of which we have to operate under next season. Paul is working hard to recruit the squad that will maintain the performances that we have achieved this year. I am sure everybody would recognise that Paul’s emergence as the head coach has been first class. If I had my choice for Coach of the season the Paul would be it.
I am pleased to say that Richie’s appointment is now starting to evolve. Obviously it has taken a long time to get Richie over here, not arriving until March. He has now been with us 4 months and like any new role it is now starting to see his contribution to the Club and to the development of the Club will become more and more apparent over the next few months. Everybody will appreciate that as a Club we operate on a minimum number of employees for administration purposes. We do rely upon LSV to provide additional assistance which they are happy to do. I and the Board being involved on a part-time basis means that you do need to rely upon the full time members of staff in the organisation. Paul, Richie, Annette, Andy, Christine Johnny in Lottery, and Jane in the accounts, all contribute significantly. But by, maintaining a lean mean machine we are able to build that foundation of sustainability.
I mentioned earlier the discussions we have had with the RFL about Super League. Sustainability is going to be the key motoring tool for the RFL. It is without doubt that we have the best facilities within the Championship and in some cases probably far better than some Super League Clubs even though some of them have got new grounds. The unique partnership we have with Leigh Sports Village means that we could if so requested by RFL step into Super League quite quickly. I, Trevor and Simon Toon are currently working on a budget plan to demonstrate to the RFL how sustainable we are as a partnership.
We are unique in rugby league terms compared to any of the other rugby league clubs. All the other rugby league clubs have a ground that is very expensive to run or alternatively have landlords that are only too willing to take out income thus putting financial pressure on the rugby league club. By comparison LSV are working to an opposite formula. There is no desire to take money away from the Centurions. They looking at every opportunity to put money back into Centurions wherever possible. LSV and Wigan Council both back our campaign to we beLEIGHve. Everyone, including the wider partnership at LSV, will recognise that Leigh being in Super League will have a positive and dramatic impact upon the town and in particular the Village and what it brings to the town and the Village. Commercially it has an immense impact on the pubs and restaurants and small businesses in the Leigh community. It has a significant impact upon the revenue streams that come into LSV.
It has an impact upon the hotel and the new commercial ventures that currently exist in the village with Morrisons, Park Inn, and the new public house that will be opening shortly. Therefore, the greater revenue that Super League brings means the ability for the partnership to build a much stronger foundation The meeting that we had with Blake Solly of the RFL was very positive. Blake Solly now understands the unique working relationship that we have with LSV. If there is a mini franchise bid for the season 2013-2014 for Super League then we would certainly expect to be a primary candidate for that slot. Obviously there will be a high degree of pressure from Halifax. Obviously Featherstone will be banging on the drums but their ground facilities will certainly weaken their bid. Therefore, this issue of sustainability now is driving the Club further forward. Raising the profile of the Club forms an integral part of that process.
The partnership developed with Leigh Life has been tremendous hence again tonight is being streamed on line. The ability for games to be recorded and broadcast is of immense benefit. But I think everybody needs to appreciate that with these benefits there is a cost and people need to make proper contribution. The pricing that we have for next season is currently under review. There will be a slight increase in costs next year and Trevor will explain this to you. Therefore, financially from a RFL point of view, I believe that we are now achieving the results we are capable of achieving SUSTAINABILITY.
The performances on the park have been quite outstanding and there is no reason to doubt that they will continue through the rest of this season and into next. It has been a very hard learning curve for everybody on the Board in trying to assimilate and get to grips with some of the nuances that have existed. Obviously on some occasions we have upset some and have helped others. Sometimes we get it right and sometimes we get it wrong. But all the decisions we make are in the best interests of the Club without any reward for any members of the Board. One of the hardest decisions we have had to tackle this year has been regarding Leigh Community Trust. It was envisaged that having to close the community department last year that the Trust would step up and we would be able to work in partnership together.
That regrettably has not been able to work. It would be unfair to go into the full reasons why that has not occurred but it is right to say that due to a number of issues it has not happened. The level of communication between the two organisations has been poor, the consequences of which the cooperation between the two organisations has not worked. Therefore we are now embarking upon re-establishing our own community department which under the stewardship of Trevor over the next few months which will reinvigorate our work within the community. Part of that work has already commenced with the employment of a number of apprenticeships which are now taking rugby into primary schools.
Leigh Sports Village has its own community department and again the overlap between our organisation and LSV is there for everyone to see and again with the support of LSV we are able to progress the community projects that we need to progress for RFL requirements. The RFL regrettably has its own issues in terms of funding. It is unfortunate to announce that the RFL will be making cutbacks across the whole rugby community due to restrictions in income from Sport England later this year. Operationally within Championship.
In the past the clubs have always attended the RFL meetings on a club by club basis. That has meant that when propositions have been put forward by the RFL for the first time at those Championship meetings to consider the proposals. The consequence are decisions are made without the full consequences being appreciated. Therefore, the Championship clubs have now resolved to meet prior to the Championship meetings so that we can fully discuss as a group without cross referencing to the RFL our concerns so that we can deal with proposals on a united front if possible.
This approach is creating greater transparency between all the clubs in how all the clubs deal with certain issues, for example: travel, medicals, insurance. There is obviously an overwhelming desire to ensure that all the clubs are sustainable and do not end up like we have with Bradford. So there is a new dawn of realisation within the Championship that we have to act as a group cooperate, share information and in some cases be open about certain issues and not necessarily simply go to meetings purely and simply ‘what’s best for my own club’ regardless of what’s best for the sport. Again, I would like to apologise for not being at the forum. I am not wishing to prevent anyone from asking me any appropriate questions. Therefore, please feel free to email me or Trevor with your questions and I will respond. Where appropriate I will place on the website the question raised and the answer given so everybody is aware of the issues that have been raised and the responses that are provided by me and the Board.
Keith Freer 15th August, 2012"