Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


APPENDIX 22

Memorandum submitted by Saracens Ltd

1.  INTRODUCTION

  1.1  This written submission was prepared by Mark Evans and Tim Lawler of Saracens Ltd and represents the views of the company.

  1.2  Mark Evans is the Director of Corporate Development and was previously Director of Rugby at Saracens. Tim Lawler is Managing Director and previously worked for the Rugby Football Union.

  1.3  Saracens Ltd are a community based, marketing led rugby club who compete in the Allied Dunbar Premiership.

2.  FINANCIAL STATE OF RUGBY UNION

  2.1  No professional Rugby Union club in England is making an operational profit. In large part of this is due to the way in which professionalism was introduced. There was little forethought and initial optimism resulted in the cost base spiralling out of control—largely in the form of players' wages.

  2.2  Nevertheless recent developments are encouraging. A squad capping procedure has reduced wage costs, squad sizes have fallen and salaries are now reasonably under control. However, the wage cap must be seen as a permanent adjustment since the cost base of many clubs need to be reduced still further.

  2.3  On the revenue side signs at Saracens are encouraging. Average crowds have risen from 3,500 in 1996-97 to over 10,000 in 1998-99.

  2.4  Saracens Corporate and Sponsorship income has reached seven figures and has increased by 87 per cent in the last two years.

  2.5  Operational losses will drop below £1 million level this season.

  2.6  The club will be self-funding within two more seasons.

  2.7  In this financial year Saracens will spend £450,000 on community, youth development and educational work. Another £150,000 will be spent on ground improvements. If we so choose Saracens could be profitable next season.

  2.8  However, we believe that we are in the investment phase of growing a brand. Rugby will never generate huge profits but it could create enormous value. The establishment of the Saracens brand is not cheap, but it has a real philosophy and vision underpinning it. The P&L of a sports business only sees value in the strength of its affinity groups in relation to the team's performance.

  2.9  At Saracens we buy into certain key beliefs regarding how the game needs to develop:

    —  greater centralisation with more commercial rights owned by the league;

    —  each club has to commit to a strong youth development programme;

    —  the wage cap must remain indefinitely;

    —  a collective bargaining process is desirable;

    —  every club has to commit to a strong youth development programme;

    —  all clubs have to be an active resource in their community;

    —  long term partnerships are the key to our corporate strategy; and

    —  a British/European League is the immediate future. In the long term the game should go global.

  2.10  In the immediate future (the next three years) we do not believe TV revenues will be the saviour of the club game. Rugby is not yet a "must have" for broadcasters. Any future TV rights negotiation should see a "non-exclusive" partnership approach that will promote the game to a wider audience.

  2.11  If clubs and the league (preferably British or European) all adopt a community led, marketing based strategy then financial viability is an achievable goal within the next three years.

3.  INVESTMENT AND PUBLIC SUPPORT FOR STADIUM MODERNISATION

  3.1  Saracens have played at Vicarage Road Stadium, Watford since September 1997. This a a 23,500 all seater stadium which is shared with Watford FC.

  3.2  This is the only example of English Premiership teams rugby and football sharing a ground.

  3.3  Since September 1997 Saracens have invested over £1 million into the ground in the form of a new pitch, catering facilities, dining areas, a Big Screen and hospitality boxes.

  3.4  To date, no public funding has been applied for.

  3.5  In the light of the RFU facilities strategy still being constructed the ease of access for funding is much constrained.

  3.6  The contrast with funds available for football and in other countries eg France for stadium and facilities development is marked.

  3.7  Plans for a new training facility will include significant community use to enable the club to continue to provide amateur/youth rugby alongside the professional game. Such plans need to be supported centrally.

  3.8  Saracens strongly support EFDR policy which seeks to retain a percentage of central monies for spending on capital infrastructure linked to minimum standards criteria. Such far sightedness needs to be matched by some kind of PFI programme.

4.  PROMOTION OF PARTICIPATION IN RUGBY AT SCHOOL AND AMATEUR LEVELS

  Many people make the mistake of thinking that community = kids and that hard nosed commercialism is a different thing. They are wrong—every buying customer is a member of a community. So be a part of his or her community and they will be a part of the business.

  4.1  We make no apologies for making this section the centrepiece of our submission. Saracens are a community based, marketing led rugby club. It is absolutely central to our whole philosophy that our organisation, and hopefully the whole game, be:

    —  innovative;

    —  community focused;

    —  family orientated;

    —  close to the supporters; and

    —  partnership based.

  4.2  Such a stance is the only way in which we will be commercially successful and the game as a whole will grow. It is not an either/or situation. Rugby cannot remain an exclusive, inaccessible, slightly arcane sport. We must reach out to our community and be:

    —  accessible;

    —  responsible;

    —  flexible; and

    —  consistent.

  4.3  The Saracens Community programme is at the forefront of everything we do. It is the first contact that people have with us. Some key points to date:

    —  65,000 children have participated in the Community Programme since September 1997;

    —  during which time 10,000 adults have also participated;

    —  Awarded Sportsmatch Best Community Programme 1998; and

    —  Award Running Rugby Best Youth Initiative 1999.

  4.4  Significant elements of the community programme include:

    —  foundation skills which includes coaching in schools, disabled and special needs involvement;

    —  teacher and coach education;

    —  Chalk and Talk—a cross curricular Key Stage 2 programme;

    —  positive lifestyle messages, assemblies, literacy packages; and

    —  mentoring programme.

  4.5  Future plans include:

    —  a classroom facility at the stadium;

    —  study support groups; and

    —  secondary schools cross curricular pack.

  4.6  To deliver such a programme we employ three full-time Community Development Officers and two part-time.

  4.7  In addition we employ two full-time Youth Development Officers who concentrate on developing talented young players. The key elements of this strategy are:

    —  a monthly Academy which attracts over 300 applications each year from all over the country. Staffed by the professional players just over 100 applications are accepted. The age range is 14-16. Next year we will launch a satellite Academy in South London;

    —  a network of Partner Schools in the state sector who act as magnet schools in regions such as South Wales, West Midlands, Devon and Cornwall as well as the South East;

    —  smaller Elite squads which operate at U-16 and U-18 level;

    —  a Youth XV for Under 21 players which plays every Saturday; and

    —  a 12 strong group of apprentices aged 18 to 21 who are part of the same squad as the professional players.

  4.8  Alongside the programme outlined above the Saracens mini and junior section caters for over 400 boys and girls aged between six and 17 every Sunday morning.

  4.9  The innovative Saracens Cashback scheme—an incentivised ticketing operation has, to date, ploughed £175,585 back into local schools, rugby clubs and other organisations. In this way we have had direct links with 332 schools and 202 rugby clubs. In this way we make a direct connection with the rest of the game which benefits them financially and allows us to build up their affinity with Saracens.

  4.10  Saracens Junior Fan Club has 1,448 members. To the best of our knowledge this is the largest junior section in Rugby Union—having been launched in August 1998.

  4.11  Our nominated charities (NSPCC and Aspire) have received £11,396 from us this year.

  4.12  The Saracens matchday experience is specifically designed to attract a new, younger more mixed audience without alienating the traditional rugby watchers. To do this we have introduced:

    —  cheerleaders

    —  a free gift for children every game

    —  free face painting and hair-spraying

    —  half-time competitions

    —  try cards

    —  local schools playing warm up games

    —  sumo rugby

amongst other attractions. We know that to keep people interested in rugby you have to offer much more than just the game.

  4.13  Before Saracens came to Watford rugby was initially non-existent in the area—from a participating and spectating point of view. We had no choice but to adopt an approach which put the local community at the very heart of our operations—including, but not exclusive to, the young people and sports enthusiasts of south-west Hertfordshire.

  4.14  We know Rugby Union has a viable future if enough clubs adopt the correct approach and the league is able to operate independently without outside interference. We know because we are living it—community led marketing works. Not only is it the right thing to be doing, it also happens to be the most successful commercial approach.

November 1999


 
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© Parliamentary copyright 1999
Prepared 14 December 1999