Scarlets £5.5m(!) in debt

Is this a sign that the superclub model is not the most financially robust businessplan ever designed?

Or will everything be okay now that Wales have had a decent RWC?

Should the WRU use the 'success' of the World Cup to launch a new and improved regional structure? Or is there no need? Everything will turn out okay at some point, now that Henson is back?

If their this much in debt when they have half their welsh internationals contracted on terms before they were welsh stars, then god help them when they have to start paying out decent money in the next few years.

you really wonder how they operate in that area, especially the same people more or less bankrupted llanelli rfc once...

I hope the Scarlets have a good run in the HC to try to recover some revenue with the extra games, the problem is the interest on £5,5 M and growing will be approx £250K this year implying they should get shot of 3 players or better coaches/back room staff to stand still. The Scarlet can't sell the ground as they don't own it (what happened to the funds from the last sale?). This region/club as a business is a dead duck relying on the local authority and wealthy benefactors but even they must call a halt. The club has had a lot of success bringing/identifying great young talent but there seems to be no end to the loses as these players will expect rewards for their new status after the RWC.

This situation confirms regional rugby in Wales is not working in bringing in the crowds to balance the books, the other teams are not much better off .

I did hear a couple of months ago Scarlets non playing staff took a pay cut.

As mentioned Scarlets rely heavily on benefactors such as Glaville wise, Huw Evans, Tim Griffiths etc (although allegedly the relationship of the previous 2 mentioned is strained after Huw Evans floored Tim Griffiths for blowing cigar smoke in his face in a meeting last season).

I think the Scarlets objective if i remember rightly is for them to get to a point where the benefactors pay 50k a year to break even. Although this will be a struggle.

Who isn't in debt these days? No one can point the finger at anyone else.

Cari wrote:Who isn't in debt these days? No one can point the finger at anyone else.

Well the problem is rich French clubs pushing the wage ceiling far above what Welsh regions can realistically compete with. That's our problem.

no, they're not £5.5m in debt, but that won't stop the haters. Open the other eye, read the article again and then think about it. (where's that facepalm smilie when you need it?)

Turkster wrote:no, they're not £5.5m in debt, but that won't stop the haters. Open the other eye, read the article again and then think about it. (where's that facepalm smilie when you need it?)

Despite being an Ospreys fan I'd hate to see the Scarlets get into a mess, they have had a few tough years down there with rebuilding so to have the rug pulled from under them would be terrible, though the so called welsh rugby supporters could be doing a lot more and turn up in numbers to see the team play! Though that goes for ALL the welsh regions really.

For goodness sake we aren't £5million + in debt. Those are figures taken at the end of June 2010. We've made huge savings since then and are projected to break even in 2013. This is a typical scare mongering by the press with out of date figures. Ridiculous.

Why not start an article about the debt the Ospreys and Blues are in while you're at it?

There are only a handful of clubs (if that) that are turning over a profit in rugby.

rugbydreamer wrote:For goodness sake we aren't £5million + in debt. Those are figures taken at the end of June 2010. We've made huge savings since then and are projected to break even in 2013. This is a typical scare mongering by the press with out of date figures. Ridiculous.

Why not start an article about the debt the Ospreys and Blues are in while you're at it?

There are only a handful of clubs (if that) that are turning over a profit in rugby.

Breaking even "in 2013" is a projection relating to trading profits for that year. It has no relevance to the level of existing debt on the balance sheet, now or in the future.

If you're promoting yourself as an "Administrator" on here, if you don't know your stuff at least do a google search before you comment. Clueless.

I'm not projecting myself as anything mate.

The figures you are talking about are from last year, they aren't up to date at all. We don't know what the balance is at the minute, but I highly doubt with the savings that have been made and the increase in ticket and season ticket sales that it's still at £5.5million.

Like I said it's scare mongering in the press. The Scarlets chief exec has already come out and said what their plans are financially for the next few years, we are still paying off our loans at the planned rate as a spokesperson from Carmarthenshire council has also already said. There is no drama here. Yes we aren't in a brilliant position, but neither are loads of other rugby organisations across the UK. Like I said, why don't you look into the O's and Blues as well? Their positions aren't rosy either.

It's hugely difficult for any rugby club to turn a profit. The press might want to make a story out of nothing, but personally I trust the people who are in charge of the Scarlets' finances and that we are taking steps in the right direction.

hmmm, just as 2013 has no relevance on the level of existing debt then the figure quoted in April 2010 has no relevance either, but you're still using it Casartelli. Clueless.

Also a lot of the debt is owed to the council who have deferred interest payements.

This story is just a load of tabloid trash and even fish and chips deserve better. The figures were taken from a time before a new management team came in and agreed a new plan for dealing with the debt with the debtors, since then theyve been meetintg their targets and have shown improvded ticket and merch sales and increased off field income, such as the concerts weve had. Only the western fail could miss so many facts in one article

Casartelli wrote:

rugbydreamer wrote:For goodness sake we aren't £5million + in debt. Those are figures taken at the end of June 2010. We've made huge savings since then and are projected to break even in 2013. This is a typical scare mongering by the press with out of date figures. Ridiculous.

Why not start an article about the debt the Ospreys and Blues are in while you're at it?

There are only a handful of clubs (if that) that are turning over a profit in rugby.

Breaking even "in 2013" is a projection relating to trading profits for that year. It has no relevance to the level of existing debt on the balance sheet, now or in the future.

If you're promoting yourself as an "Administrator" on here, if you don't know your stuff at least do a google search before you comment. Clueless.

Mr F ............ Good Morning Sir, it seems you are turning more and more into a WUM post WC, stop it old pal now !!

As (an Economist and Accountant) I can state now that rugby dreamer is 100% correct (even if she? didn't realise it) and you Mr F are wrong is your assumption,

1. The Balance Sheet is purely a "snap shot" in time.......... as they say in that 1960s children programme "Stingray" ...."anything could happen in the next 5 minutes". Information released from 2010 maybe close to 18-24 months old, hence is as much use as Stephen Jones in a 100m dash , or Hooky to slot 3 points under pressure

2. Debt is good (I know it sounds incredible) if you take Barcelona FC decision to invest massively in debt years ago to build a 98,500 seater stadium then it was a huge but calculated risk, and they used the Camp Nou to now become the best club in the world. You just have to manage your debt.

3. The P+L, Cashflow situation, and future opprtunities are (in The Scarlets or any other region) are more important, the shareholders (or equivalent) will be more interested in how they manage the key aspects of the Balance Sheet i.e. in the Scarlets or Dragon it probably be how they can develope the old fashioned "club" feel and develope home grown players, in the case of The Ospreys (Swansea) it would be how they might attract and hold one or two big name to increase their profile as the countrys second biggest city in addition to the "club" feel, and finally Cardiff not only as the biggest club in Wales but also one of the biggest in Europe

4. The Scarlets management team and club ethos in 2010 is much different, alot of the old school deadwood (I could say alot worse about them) has gone, fine marketing team, great young players coming through, attendances up and I would suggest the future is looking good the future is Orange sorry...... Tango sorry......... Scarlet yes!!, at last that's the colour I was looking for

ps by the way could you all send positive thoughts to my boys today at the Stadio Monigo, Treviso. I think we may need it..... altogether now "AWAY WIN", "AWAY WIN"

Don't worry, they use the Irish accountancy method, they will find a duplication of debts shortly that will reduce it to 4.5m. Sorted!

It seems Scarlets fans are happy with the model - although I think a comparison between the Nou Camp (average attendance 79000) and Parc y Scarlets (average attendance 790) is stretching it a bit, even for a Scarlets fan!

Seems to be some confusion amongst the fans as to whether the debt is reducing or interest is rolling up - but I guess it will all come out in the wash.

Good to see FHF can still write 5000 words without actually saying anything (joking!).

I contend that a superclub model that relies on benefactors and debt write-offs is a broken one, that sooner or later will implode - this wasn't intended as a dig at the Scarlets.

Castrelli - you miss out a 0 at least from the scarlets avg attendance or this could b a wum as u ignore the point fhf (a endinburgh fan) made.u ignore the points and facts others have made to discount ur claims and still say there seems to b confusion when these points state the points quite clear (unless theyve confusd u)

I'm going to get to the bottom of this. I've emailed Carmarthenshire County Council requesting an up to date figure on the outstanding loan, and the amount of any 'deferred' interest.

Under the Freedom of Information Act they have to provide this within 28 days.

I will update 606v2 in due course. Settle this once and for all.

Good luck with that. Why dont u do 1 for each of the regions for comparison

Good idea. Not sure Carmarthenshire Council will have lent money to any of the others - but I'll ask 'em!

Casartelli wrote:Good idea. Not sure Carmarthenshire Council will have lent money to any of the others - but I'll ask 'em!

Casartelli wrote:although I think a comparison between the Nou Camp (average attendance 79000) and Parc y Scarlets (average attendance 790) is stretching it a bit, even for a Scarlets fan!..........

Seems to be some confusion amongst the fans as to whether the debt is reducing or interest is rolling up - but I guess it will all come out in the wash.

Good to see FHF can still write 5000 words without actually saying anything (joking!).

I contend that a superclub model that relies on benefactors and debt write-offs is a broken one, that sooner or later will implode - this wasn't intended as a dig at the Scarlets.

Love it Mr F.... 5,000 words

But I can see what you are getting at ,,,,,,,,,,,,, if the business model is "superclub" status the West Walians certainly need a "big cheese" benefactor in the long run. However unless I am mistaken the model is actually "team ethos feel good factor" (instead of Galaticos/Tangofied/Super Club option) is now working through, with the "regional" very talented youngsters (Stoddardt, Knoyle, Priestland, Williams, Davies, North) splattered with the odd "B" sports star import i.e. Schlong Lamont, you can see how successful this appears to be as their neighbours have stated they have got rid of their superstars or should we say their tangofied superupstarts (Henson/Hook/Byrne/Phillips etc), moreover they have gone further and stated no more coloured tans, tints, togs or tantrums. I would suggest the Os are adopted more of a Scarlet model going forward

Interesting (and very suprising) Attendance Stats up to the 05/11/11
http://www.statbunker.com/rugby/btb/index.php?PL=competition&CompID=394&statType=home_Att

Club Average Attendance
Leinster 21,434
Munster 9,625
Scarlets 7,464
Ulster 6,217
Cardiff 6,170
Ospreys 5,480
Dragons 4,376
Treviso 3,750
Connacht 3,703
Aironi 3,041
Edinburgh 3,028
Glasgow 2,982
Total 7,028

Early days but make of the above what you like

Strange that the Ospreys reckon they don't have benefactors handing out money, but that their stadium and shirt sales generate enough cash, yet the latest figures for the Liberty show an overall loss for all 3 concerns who own it, so where's their cash coming from as shirt sales and a fairly low average attendance don't generate that much cash? Do they now qualify as a 'super-club' along with Cardiff, Llanelli and Newport? Wasn't there a report out not long ago saying that, basically, there's only 3 rugby clubs in Britain that aren't in debt? Northampton, Leicester and Newport?

Newport Shropshire or Newport Pembs?

Newport Gwent Dragons to give them their full title, super-club of the east.

Just pulling your plonker Tyrcstyr

Turkster wrote:Strange that the Ospreys reckon they don't have benefactors handing out money, but that their stadium and shirt sales generate enough cash, yet the latest figures for the Liberty show an overall loss for all 3 concerns who own it, so where's their cash coming from as shirt sales and a fairly low average attendance don't generate that much cash? Do they now qualify as a 'super-club' along with Cardiff, Llanelli and Newport? Wasn't there a report out not long ago saying that, basically, there's only 3 rugby clubs in Britain that aren't in debt? Northampton, Leicester and Newport?

Erm, you might want to add Exeter Chiefs to that list?

Don't quite get the 'super club' bit that keeps being applied to the regions here... or is this just another way of referring to the regions?

Turkster wrote:Wasn't there a report out not long ago saying that, basically, there's only 3 rugby clubs in Britain that aren't in debt? Northampton, Leicester and Newport?

I think there are more than that in the AP... general rule of thumb: If the club owns (and by own I mean more or less paid off in full) it's own ground/stadium they are usually not in debt. But it's also fair to say that Tigers having a weekly gate of between 20,000 to 24,000 certainly helps keep the coffers full. When the welsh regions start to enjoy similar receipts their situations will improve.

Whats happening th esale of Stadley park?
They've been trying to sell it for years, once it gets sold no debt, I bet they never factored in that it would take so long to sell and hence the budget probs

Stradey Park was sold before they moved into PYS, that was only way they could afford to move, they'd planned out everything with the finances but then a local football supporter decided he didn't want them to move (basically because Stradey Park was bought by a property developer) and opposed them in court, he got legal aid the Scarlets didn't, cost them over £3m, factor that into the cost of the move and the lower gates than they expected and hence the debt for their first 17 months in situ.

Hopefully now higher gates will get them out of bother in the next year or so.

And the guy that objected did it on the grounds that he used the training pitch as a public common where people could walk their dogs and meet other residents!

Someone could have pointed out that all those people (including me when I walked home from school) were tresspassing but the Scarlets allowed them to do it.

Right, I always thought it was the recession, hit th eScaarlets and they couldn't get a developer. Bet that guy is popular in town.

I think the houses went up very fast, but apparently there's drainage issues with too many houses being crammed into too small a space. But yeah it was all down to 1 guy (and a small group of local residents that followed him). It was a pretty pathetic arguement by them - along the lines of "you can't sell your own land because I quite like having the open space of the training ground outside my door". Not really sure what they expected to gain from it as if the Scarlets had been involved in that court case for any longer then they would have gone bust and then the land would have been sold off to pay the creditors and the guy would have still lost use of the land.

To be fair to the local group of residents (well some of them), their main concern was that there would be drainage issues and it looks like their fears have come true.

I think the big troubee is that the residents took out two cases against the Scarlets. Cost us megga bucks really. Plus how both sides handled it alienated a lot of Llanelli people from following the Scarlets. Some just didn't like the move full stop. That's also one of the reasons why crowds in seasons gone by haven't been great which hasn't helped us in trying to pay off our debts.

It has been improving gradually over the last 3 seasons though, and with our new up and coming stars, and new financial committee, it certainly seems that we're moving in the right direction

Smirnoffpriest wrote:I think the houses went up very fast, but apparently there's drainage issues with too many houses being crammed into too small a space. But yeah it was all down to 1 guy (and a small group of local residents that followed him). It was a pretty pathetic arguement by them - along the lines of "you can't sell your own land because I quite like having the open space of the training ground outside my door". Not really sure what they expected to gain from it as if the Scarlets had been involved in that court case for any longer then they would have gone bust and then the land would have been sold off to pay the creditors and the guy would have still lost use of the land.

he actually stated that he wanted to be the cause of the Scarlets going bust, just to get back at them for selling the land for property development. There's a lot of people in the town who hate rugby and follow football only, he's one of them, kind of ironic then when the Reds (Llanelli FC) have to go cap in hand to the Scarlets to borrow their ground for Euro games as Stebo's too small and all the hardcore football supporters have to swallow their pride and head to PYS. They actually marched down from Stebo with banners and flags flying when their first game was played there, really sad individuals.

I heard that the scarlets offered to let the reds to play in pys permantly but the reds refused and said they didnt want anything to do with the scarlets and would rather develop stebo park. Dont know if its true,madness if it is.

On FHF's point about FC Barcelona creating good debt by building a huge stadium. I agree. But is it just bad timing with the economy in Wales being as it is or have the regions drastically over predicted the interest in regional rugby? The Irish economy is in a terrible state, but their attendances are superb. I support the dragons and we sell out about twice each season. Probably the same as the other regions, but we aren't paying a fortune to play at Rodney parade. We are fortunate that Tony brown stumped up a lot of cash to develop the ground, but couldn't stradey park have been redeveloped? Maybe it couldn't. But the blues too pay a huge amount to play at the CCS and get very poor crowds when you think of the players on view.
It drives me mad that Wales sell out for games that are priced at £70, yet only a small percentage actually regularly watch these players. The dragons have had the lowest average attendance for a few years now, but we can't argue. We haven't had many big names and aren't a successful region, but I can't get my around why the ospreys were only getting about 7.000 a game. There have been times when their team has been better than the welsh team and yet 65,900 more people watch rhese players when they play in red!!
Are kick off times to blame or the economy?
I hope that Wales good showing at the WC will create a new buzz and attendances will increase. The scarlets have developed a huge amount of this current welsh squad. Even players that are now at other regions or abroad. It's a hot bed of rugby talent and I hope that attendances increase and the scarlets are successful. Wales needs them.

I think kick off times are a lot to blame. As are the way the regions promote themselves. As is the economy. As is the apathy of arm chair fans.

it's just a combination of things really, but I have to say I was really, really disappointed with the attendance at the O's v Scarlets match.

One thing I will say for the Scarlets is that they are using their stadium much better this year. They had a musical festival there this summer, the Swansea reserves play there, and at teh recent fireworks show they had a crowd of about 7,000. This is absolutely brilliant in utilising the facilities and hopefully making them a pot of money too.

Our season ticket and match day sales are up so far this year as well. Not by much, but at least we are going in the right direction! Wish we could get rid of the Friday night matches though - absolute nightmare to travel to and from really.

Dreamer. Kick off times are a disgrace. The dragons have 4 home games from now until the end of december. One on Thursday, 2 on Sunday and 1 on Friday. That won't help increase our crowd! We also play Exeter away on Sunday 11th December. 5.45 kick off. They may as well say, away fans don't bother. I'd shortlisted this game as one to go for, but if I do go, I'll have to drive. What are my chances of getting trains back at 7.30 on a Sunday? It's not good enough.

I know it's a bit ridiculous, even more so when you realise that the Scarlets v Dragons match is on a Friday! kick off at just gone 7pm I think, so I might be able to make it, but the trains stop running at about 9, so I'd have no chance of getting home, and I don't drive! and this should be for a match that we realistically should get a really big crowd for, but you know the time of it is going to put people off.

Scarlets have been lucky in that their last home game and their next one have been at 3pm, and I think our heineken one against Munster is at 2.30pm. Otherwise they're all rubbish times as well, I mean I think our away game against Northampton is an 8pm kick off that is on a Friday!

Thursday games though are the worst, think Scarlets had 3 of them last season and I couldn't get to any of them!

I couldn't agree more.

manofgwent, there was no way they could have developed Stradey Park, I was one of the ones who wanted them to stay, when I lived in Llanelli I used to love walking there, stopping in pubs on the way and then making a night of it after, but when you go to PYS the difference between the 2 grounds is stark, you realise just what a tip Stradey Park was at the end. The good news for the Scarlets is that they get all the revenue from the new ground and like the Liberty it's a real money spinner even when there isn't rugby there, the difference is the Scarlets don't have to split it 3 ways like the Ospreys.
Going back to the 2nd post on this thread, they haven't got the same people in charge who nearly took the club into bankruptcy, they've now got hard-nosed business men in charge and the future looks bright.........for once.

It is terrible the average attendances in comparison to wales. I think the reason comes down to supporter apathy as has been said,the way the regions were set up disaffectin great swathes of fans (ireland didnt suffer as much with this),the kick off times and bcoz all the above the regions have little atmosphere and struggle for attendance which puts off the fairweather and footie fans,whereas they r attractd to wales games bcoz they know that the ground will b full,theres loads of hype and a good chance to get drunk.instead of sittin in a half empty stadium watchin a team on friday nite when u could b in the house nice and warm