CRYS 16 MEETING

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Meet the
Management Q & A – 31^st January 2022, 7pm

Simon – Please could you start us off this evening and give us your
thoughts on where you think we currently are as a club on and off the pitch, an
update on PRB negotiations and what impact the changes with the WRU will have
on us in the coming weeks and months? 

·       
On codeine tablets mixing with Moretti! 

·       
I Can’t promise to deliver the moon on a stick but
will try to get as close as I can. 

·       
I have a huge responsibility to move the club
forward. 

·       
If I was to grade my time in charge so far, Effort
would be A+, progress C- moving to C+

·       
April 2020, I met Nigel Short:

o  
Nigel’s handover: You don’t need to touch the squad
or coaches for a couple of years.

o  
A plan to cover the forecast £1m deficit was in
place. 

o  
Nothing to worry about as Covid would be over by
September 2020.

·       
Simon’s first year was about survival. Hand to
mouth. After that, he managed to look at issues and looked at the club –he
realised that the club couldn’t do much on its own to change the rugby
landscape. 

·       
Realised they needed a longer-term funding plan. 1^st
year of Simon’s tenure, they got September’s funding in place by 26^th
June! 

·       
It’s impossible to plan or build when you have no
idea what your budget is from one year to the next. Simon’s goal was to move to
multiyear funding.

·       
Structure of the entire game needs to be reviewed
and improved, from Premiership to relationships with URC, PRL, EPCR, CVC.

·       
We can’t do much unless eco-system is prosperous
and growing. Very tough job at the moment. 

·       
SM Loves working here, biggest brand in West Wales,
great opportunities to local boys and hopefully girls in future. Build on the
rich heritage, hopes that the future will lead to successful Men’s and Ladies

PRB Negotiations/ WRU/ Competitions

·       
Simon - With the heads of terms signed are you confident the deal we are
signing up to gives us the scope to be successful on and off the pitch, or is
it a deal that just keeps our head above water?

o   HOT were
signed in Quinnell lounge on evening of Cheetahs game. The change of WRU personnel
has helped tremendously to move towards finalising the long form contract. 

o   Been in details
negotiations since Dec 2020. Process started in April 2021 so 22 months. Started
with a circa £80m 5-year deal on the table from WRU, now that’s up to circa £135m
over 6 years. 

o   Next 2 years
of the deal looking much better than they did 2 years ago. 

o   Deal does
allow us to be successful but requires a lot more effort on growing commercial
and other revenues.

·       
Jon & Phil - What is the impact on the deal for us in terms of
business planning and squad planning both for next season and in the more
medium to long term over the course of the 6 years.

o  
JD: Uncertainty is the most difficult thing, one
year funding has been the bane of rugby planning. 

o  
In general performance environments want a no
excuse culture so going through a negotiation / fight every year is a problem,
but we have got used to it. 6 yr. deal helps. 

o  
The current season’s funding still not finalised! 

o  
Scarlets have been working on a squad rebuilding project
for a couple of years, with plans discussed with Dwayne during his recruitment.

o  
Realised some time ago that we needed work on the
new generation.

o  
Delighted at the way coaches and the whole group have
responded to the poor start, and some of the youngsters coming thru. 

o  
PM: nice to be back face to face, time to move from
survival into planning and building, has been too much management time sucked
into endless negotiations and budgeting in-year. 

o  
20 months, planning for current deal. 

o  
We have been starved of funding for 6-7 months this
season. Phil is working on cashflow on a daily basis and keeping a very lean
non-rugby staff as a result. 

o  
Hoping now to move to growth planning, rather than
day to day budgeting.

o  
Energy bill increased £120k pa, so did food bill.
Pre covid, cost of a trip to Italy was £35k for 40 people, now £55k. Can’t pass
that on to ticket and retail prices in current economic situation. 

o  
Conscious decision to keep ticket, food and
beverage prices low.

·       
Given the reported salary cap in the new deal, in a league where other
sides outside of Wales won’t have one, how do we gain a competitive advantage
within Wales and ensure we are competitive in the URC and European Comps.

o   JD – working
with other regions to look at collaboration in rugby costs but also model of
operations like player contracting. Cost cutting will inevitably affect the
players most – in the pocket – and we must respect that. Lots of communication
to players and agents currently on that topic.

o   Is there still
hope for future? Yes. It will take time, but at least we will now have long
term financial plan. Costs will be lowered generally but academy costs
increased and all 4 sides signing up to minimum spend/ activity in this area.

o   The market in
England helps as it is deflationary, with downward pressure on salaries.

o   None of us
just want to exist, we are in this to be competitive and longer-term investment
in youth will pay off.

o   JD is able to
make offers, but the offers are STILL conditional, started making conditional offers
from last week.

o   1/3 squad out
of contract. Explained situation to squad in December, they were all told “Yes,
no or maybe (for contract offers)”. That is not the norm, normally done thru
agents in the early stages and then players at a later date.

o   Some of the
maybes are now yes.

·       
In view of the cultural issues within the WRU and with the regions often
working closely with WRU staff what are we doing to both help the WRU and also
proactively ensure our culture, diversity and equality is where we want it to
be?

o   SM Constantly
lobbying the WRU about this. We are a private business that is guaranteed by around
10 individuals on the board, so by definition we can’t make wholesale changes
to the board as those individuals ensure that the wages get paid.

o   SM knows we need
to build and accelerate the development of women’s game.

o   Staff Training
in EDI ongoing. 

·       
I think I speak for most fans in saying this new European format is
dreadful. Any idea what the future of this competition looks like next season
and beyond? Also, are there any planned changes for the URC given rumours of
expansion and teams frustrated with travel.

o  
EPCR recognise current format is not good enough.
Fans don’t get it, it’s too easy to get to KO stages.

o  
Maybe some changes as an interim measure for next
year, but broadcast deal is up 24/25 so they realise they need a much better
offer for broadcasters. 

Rugby questions – Jon Daniels

·       
Great to see more players being released to the RFC this year, which can
only support our development pathways. How else are we supporting them to be
more competitive going forward? Clear they need more senior players to support
youngsters to develop.

o  
We supply coaches, S&C, match day staff, pitch
costs all covered by Scarlets. This is because it is the vehicle for the
transition group to develop together. “Gainline analytics plc” have proven that
combination development is effective.

o  
However, the RFC cost the Scarlets a lot of money,
but that investment still isn’t enough to make it work. We don’t have enough
quality semi pros to aid the development of the transition players. This needs
a 6-figure increase in revenues. 

o  
So far, no one has succeeded in growing the
revenues of the RFC, so we don’t currently have a solution. It is a real
problem without an income stream to address it. 

Matchday Experience – Phil Morgan

 The same issues keep on cropping up with
     regards to matchday experience. Despite the challenges of casual staff how
     are we addressing the problems

·       
The matchday experience continues to be very hit and miss, the north
concourse regularly has issues with speed of service, unavailable items, cleanliness,
and there have also been occasions where the east stand bar has run out of some
drink options.

o  
Keeping prices low, so have taken low risk approach
to stock levels. Also, ticket sales are much later than previous seasons, so
it’s difficult to plan how much stock to order. Games are infrequent, so
nothing can be kept for next week! 

·       
What changes have been made to the matchday experience this season and
are there any more plans to enhance the experience for the European KO games –
ideas such as Flags, choir before the game, tag festival if we have any earlier
KO times.

o   PM: Very
difficult to recruit and retain staff. Constantly in recruitment mode. Almost
impossible to man everything they want. 11 non-rugby off field staff rises to
200 on match day. Many of those are in their 1^st day at the stadium.
Bused in students from Cardiff for one game.

o   Stop-start
fixtures don’t help. Go weeks and weeks between games, so lose staff in those
periods as they find other jobs.

o   Last home
game, 16 out of 68 retail staff did not turn up!

·       
Please can you explain why the barn has been closed post game recently?
Understand this commercially for late games but for earlier games/ bigger
crowds is it not worthwhile commercially and for supporter experience to keep
it open?

o   PM Simple
economics. Sales after game much lower than pre-game. Sometimes 20 customers in
the barn post-match, hence the investment in Tanner Bank bar. 

Commercial Questions – Phil Morgan

·       How are we managing the CCC loan and
with the CBILS loan on top how big a risk is this for us?

·       
SM: Wales is only country in UK where rugby is
repaying a Covid loan. Competition and commercial probably not going to raise
in next few years. Need to look at divesting assets, such as the hotel. Need to
go back to WG about Covid loan. 

·       
CBILS repayment takes £8m out of the 6-year deal
(in total for all 4 teams)

·       
PM has been negotiating with CCC for a long time.
CCC not expecting repayment this season as per original agreement. 

·       
Debentures some due for repayment this season, some
holders have mentioned they never expected their money back, so can donate it
“charitable community foundation fund” which will give them some tax back. PM
has cleared with HMRC. I

·       
Initial plan was rushed due to 31^st Jan
tax return. Remaining holders being invited to a meeting at next home game to
discuss options.

·       Could
you explain why we have invested in an amazing new screen for the stadium and
a) large parts of the new screen are being used for sponsors logos and b) the
whole other screen is being used for sponsors logos?

·       
Old screen was “on borrowed time” so invested in
new screen and score boards at a cost £240k. 

·       
Can’t get spares for the old screen anymore.

·       
Advertising has been thrown in to repay sponsors
who stuck by us in Covid. We only get 1 broadcast feed so put it on big screen.

·       
Old screen is too unreliable for TMO. Can only have
one screen for TMO.

·       What is the current situation with
Castore? Stock has been due in since early October which still hasn’t arrived,
is it going to come in or are we done for the season? Would be better to be
upfront with people?

·       
PM very frustrated. Got fed up with
Macron’s service and butted heads with them regularly. Castore were really good
early doors with quality and design and attention. Plans for extensive range,
3rd shirt, which Macron repeatedly failed to deliver.

·       
Global supply issues post Covid hit the
first tranche of supplies, so PM was sympathetic. However, by Xmas Castore were
still failing to hit promises. PM met with Castore, and they said they have
grown too quickly. Canterbury, Under Armor and Adidas pulling back from rugby.
Only had options of Macron, Castore, and other less commercially favourable
deals

·       
Our staff ended up putting the logos on Castore
products in PYS!!  Castore have invested
in their distribution network and strengthened their capability with some
senior appointments from JD Sports.

Questions from
the floor

Why have we
stopped programme sales?

·       
PM – it was costing more than it made.
Actual printing costs increased to £5.62 per programme against a £3 sales
price.  We’re also focussing on moving
the club to a more sustainable / lower carbon footprint.  Digital programmes have increased usage, which
is good for sponsors. 

·       
Club is considering a pre-order service
for printed programmes for those who want it. We are trying to source a
supplier able to provide this.

What are our links with HE institutions or other over 18
age group establishment?

·       
JD: we have links with Swansea Uni and their
BUCs league. Some players like Corey Baldwin missed recent games due to exams.

·       
UWTSD now developing academy of sport.
Ken Owens will be a coach there.

·       
We are also negotiating with UWTSD about ladies’
development centre. 

How do we monitor other youngsters who are filtered out
of the RAG system “funnelling”?

·       
JD: Aspiration is to go broader and keep
players longer, so fewer “harsh” decisions need to be made with youngsters.
Planning to do this with the 5 Dewar Shield areas. 

·       
We haven’t had resources to offer as many
contracts as we like. We now have an “attached group” of non-core players we
support and monitor.

·       
Key “Safety net” is still the Prem for
players who don’t make RAG system.

·       
We do what we can, but will always miss
people, it’s inevitable.

Is there flexibility to get more funding from the 6-year
deal if revenues grow.

·       
SM: New deal is good foundation, but all
of us will be in trouble in 3/4 years’ time on current deal. Need better WRU
Exec to help grow revenues. 

·       
Under the banding system, 67% of our player
budget was set by union. This grossly over inflated certain wages as it wasn’t
the WRU’s money, and they tried to please certain individuals.

·       
Currently, SM never gets to the good
parts of “to do” list. 

·       
But SM is excited about prospects for
growth in rugby.

Is there a
financial gain to having SA teams on board?

·       
SM: SA teams can’t become equity holders
in league until they drive up value of league to certain level. Good teams and
PRL are watching them closely.

·       
Still expecting convergence in CVC
leagues in future.

·       
SA teams get £3m each in shirt
sponsorship. We get £750k. SM says these are European brands, which bode well
for potential involvement in other URC NH teams.

·       
Short answer from SM was really “Not yet
but they will”.

Is the 60-cap rule of benefit, is relaxing it a threat to
Scarlets?

·       
SM – We won’t give it up without a
massive cheque (lol)

·       
JD – it is and has been critical, we will
not support its removal. Maybe reasonable to review the 60 number not looking
for significant change or removal.

Closing Comments:

·       
SM – I am optimistic. WRU changes offer
glimmer of hope. Fantastic club here with incredible history etc. Looking
forward to a lot more joy in the Scarlets. Grounds for optimism with RFC
despite JD’s comments(!) Looking forward to European KO rugby.

·       
Happy for the coaches that we have had
some more success in last 8 games.