Exeter Chiefs business update

Certain items of good news that slipped under the radar amidst all the action this weekend:

* Chiefs managed to be profitable again last season (no numbers yet, but £630k in the previous season)
* We have purchased 'P' shares (from Leeds Carnegie, rather than Bristol, tho - maybe the former offered a better deal? Rumoured to have paid c.£5m, all in the name of getting on an even playing-field with the majority of Prem clubs) - should generate annual income in the region of £600-750k from the RFU under various current deals
* Planning permission has now been secured for a new, state-of-the-art, three-pitch training facility at Oil Mill Lane, Clyst St Mary, just outside Exeter
* The planning application for the redevelopment of Sandy Park to a 20k stadium has now been submitted with city councillors and the club are hopeful of a positive outcome in the next couple of months.

Yeah, I read that stuff - but thought I would let you write it up.

Again strong evidence that Exeter are building a sutainable model that should enable them to continue to grow.

The profit was just described as 6 figures.

LondonTiger wrote:Yeah, I read that stuff - but thought I would let you write it up.

Again strong evidence that Exeter are building a sutainable model that should enable them to continue to grow.

The profit was just described as 6 figures.

Thanks, LT Yeah, I'm expecting c£250k for profit, so a bit of a drop from the previous year, but still positive

Yes, the P shares sale has been the subject of a press release up here. The club says the proceeds are to be held in a seperate fund to be made available to buy them back (or replace them) should the situation merit it. There is no comment on why Exeter bought from us rather than Bristol. Exeter are working hard to keep everything on a sustainable footing which is to be admired. I can't help feeling that there a number of outfits walking a tighrope when it comes to finance and I know that up here we are trying to follow Exeter's lead even though that probably means a lengthy period out of the top flight.

Exeter continue to be the bench mark for Championship clubs.

The challenge for Exeter now is how they use the extra income. If you add in the extra money from P shares to the new deal for AP television rights and they will have almost an extra £1.5m to spend. So much of there success has been built on the team ethos with players performing collectively some way above the sum of the parts (Steve Diamond must be envious).

Baxter will need to introduce a little more class, while keeping that team spirit.

They have exceeded all expectations and I still think this season may be the proverbial one-step backwards as they may struggle to achieve a second HC season.

To see just how far they have come though - you just have to look at the sequence of matches theyare in:

Saracens
Leicester
Harlequins
Leinster
Clermont Auvergne.

A genuine success story.

That's the spirit, GC

I feel slightly mucky all over.
But I quite like it.

There's now been a bit more info made public after last week's member's meeting.

Profit was £116,142 down from £711,651 the previous year, but with increased turnover and a chunk going towards the purchase of the P shares.

There's to be an imminent issue of preference shares hoping to raise £7.5m to fund the first phase of Sandy Park redevelopment and the training ground just down the road. The intention is that both will be ready for the start of next season.

I'm not sure how shareholdings and membership will work in tandem.

The Sandy Park redevelopment plans have been known for a while - the first phase will considerably enhance the "back of house" facilities of the main West Grandstand (which is also the conference centre), double the number of bars and add about 2.000 seats net to the capacity, replacing the temporary NW & SW covered terracing.

Just trying it again.

It gets addictive.

Ah, that's better!

I have to ration myself, otherwise I know I'll end up in a warbonnet and waving an inflatable tomahawk, so just a sneaky

George Carlin wrote:

GC, loving your new-found enthusiasm! How's the little one doing? Must be nearly a year old now?

So here's everyone's opportunity to invest in and become part of growing club - from today's E&E:

Chiefs seek £7.5m cash boost from share issue

TONY Rowe has revealed Exeter Chiefs hope to raise £7.5m through selling shares to enable them to start expanding Sandy Park next year.

The chief executive is currently working on plans to release preference shares for sale to supporters and private investors over the next few weeks.

That comes after the club announced they made a profit before tax of £116,142 last season – one of only three clubs in the Aviva Premiership to return a profit.

While that figure was down on the £711,651 they made the previous term, turnover was up more than £100,000 at £8,366,907.

And the club's directors have used some of their surplus cash to fund a £5m purchase of Leeds' P shares in Premier Rugby, which guarantee clubs extra income through central funding.

Currently the founder-member shares are worth £600,000 a season.

"We are in correspondence with a lot of supporters and investors at the moment and over the next few weeks we'll release the shares and we hope they'll sell well," Rowe said.

"The initial response is very good. Not only is it a good return on your investment but a lot of people see it as an opportunity to support a Westcountry club in achieving its ambitions.

"We need to have the Sandy Park business in the background because that generates the cash to keep everything going day to day.

"We need to build and we need to raise initially £7.5m in a preference share issue.

"We will be announcing shortly where they can be obtained locally. There will be somewhere in Exeter where people can acquire them."

The first phase of the development will see the West Grandstand expanded, doubling the capacity of the bars and adding another couple of thousand to the current capacity of 10,744.

Work on a new training complex at Clyst St Mary will start at the same time.

"Hopefully, if we have a successful issue, we can get under way with that ready for the start of the 2013/14 season, so in just under a year's time," added Rowe.

"The training ground is wrapped up with doing the West Stand. Work on them both will run concurrently."

Rowe and his fellow directors have certainly been busy off the field in recent months working on the plan to sell shares in the club as well as completing a deal to buy Leeds' P shares.

Premier Rugby rules meant Leeds had to sell their shares once a fee was set by an arbitration panel and Rowe was delighted to finalise the purchase, having initially sought to buy Bristol's shares instead.

The extra money the P shares bring in, plus the cash generated from an expanded Sandy Park, will be pumped back into the playing side to enable head coach Rob Baxter to continue the club's development on the pitch.

"I'm pleased to have secured another income stream," he said. "From start to end the negotiations took a year, which was far too long.

"When you look at an opportunity or challenge you always look to take the easiest route to goal. The easiest route to acquiring P shares was to go after Leeds.

"We've borrowed some money to buy them, not all of it, but by the time we make the repayment we'll have something left over so we can top up the playing pot.

"That's where our surplus goes. We engineer the profit in as much as we don't want to make great big handsome profit because our supporters and members are not going to thank us for making a big profit if we're failing on the pitch.

"Every year is a balance between making a profit and being able to afford what Rob needs to bring in results on the pitch."

It is encouraging and refreshing for a fan-owned club to have the balls and enthusiasm to become solid and stable. It is equally appalling that one such as Exeter (and Leeds) have to hock/prostitute themselves to buy/sell the PRL's par-baked 'P' shares for a privilege which should come as of right for any promoted/relegated side.

The PRL has a lot to answer for in its fanciful and ridiculous ad-hoc decision making (cf the BT/Euro fiasco).

Council gave unanimous approval for the development of Sandy Park into a 20k+ stadium thus evening - terrific news for the Chiefs, congrats to all involved at ERC at getting this one past he finishing post - happy daze

Exeter are doing a great job, but the actual attendences look a bit disappointing this season - 6,700 on average, which is the 11th best in the AP. Anyone know why? It's difficult to justify doubling the size of the stadium with that sort of demand.

Attendances are up on previous seasons, altho that is largely down to playing in the Heino. The plan is to redevelop the stadium incrementally and hopefully as te on-field results improve and we get more Heino rugby, the crowds will follow. It's a tricky one - I imagine that for our home game against Leinster in January we could probably accommodate 15k (a good chunk of traveling Dubliners in there), but then again we'll struggle to bit 7k when we host Sale, say. The plan allows for the ground to improve alongside the team, and of course the off-field conferencing side of the business is an important source of revenue for us too

Excellent news, if they manage this well and complete the whole project it's going to be a beautiful stadium, one of the best in the league. Up to theboys to fill it now!

It will be a thing of beauty - The new Sandy Park - does it look a little like an armadillo?

That's exactly what i thought As, it is very Armadillo-esque. We shall call it thusly from hence forth. 'Armadillo park - crunchy on the outside smooth on the inside.'

Exeter keep on impressing.

Really pleased they are going to keep the east terraces.
How do you think the design will affect SPs unique windyness? Love seeing the look on opposition faces as they hoof the ball into touch only to see it sail back into play straight into the arms of a Chief!

Reckon some of that wind variability will inevitably disappear, but if kicks stray too high, then it'll become a lottery

Exeter are rapidly becoming a role model for smaller clubs who want to improve themselves: get unstarry players who are greater than the sum of their parts, make them work their knackers off, establish a fan base, don't be afraid of anyone or believe any hype and then work within your modest means to establish a great ground.

Blooming marvellous - they deserve their success.

All true, except their fan base has stalled. Do Exeter fans have a view as to why the crowds are so disappointing?

DaveM wrote:All true, except their fan base has stalled. Do Exeter fans have a view as to why the crowds are so disappointing?

DaveM, I'm not sure that it has stalled tbh - last season in Championship, avg gate c. 3.5k; first season in AP, avg c. 7.5k; second season in AP, c. 8.5k; and we are ahead of where we were last season at the same time of year - I would expect us to be around the 9.5k avg for this year. It's small progress, I'll give you that, but given that the capacity is 10.7k, it's going to be full pretty quickly without the expansion. Next season we'll have another 2k seats as part of an extended West Grandstand, plus enlarged conference facilities which generate substantial income for the club - don't forget, Sandy Park is a stadium for rugby no more than 30 days a year, and the other 330-odd, its a conference venue

Am I the only one who watched the animation right to the end?

We can but dream, MrsP

I love it Asbo!

Absolutely love it!

No point in aiming anywhere else!

Thinking that we should invite the All Blacks to play in the first game for the completed stadium, harking back to their first match on their first tour of the UK in 1905 (when they were christened the 'All Blacks' if the story is to be believed). My other favourite memory of that tour is the papers in London refusing to believe the scoreline as Devon were the top English county back in those days, so they reversed it!! Any other suggestions for oppo?

AsLongAsBut100ofUs wrote:Thinking that we should invite the All Blacks to play in the first game for the completed stadium, harking back to their first match on their first tour of the UK in 1905 (when they were christened the 'All Blacks' if the story is to be believed). My other favourite memory of that tour is the papers in London refusing to believe the scoreline as Devon were the top English county back in those days, so they reversed it!! Any other suggestions for oppo?

How many of the matches did you get to Asbo?

I travelled a fair bit in those days, MrsP, much as I still do, so made nearly all of them - remembers it just like it were yesterday

Cheeky minx

Glad to hear that you think things are moving in the right direction attendence wise. Certainly demand will have to rise substantially before a 20k stadium makes sense.

Dave, you are certainly right that currently it it more reflective of ambition than reality

20000 was the planning approval application wasn't it? Not sure how long planning approval lasts for but getting it for the end point makes a lot more sense than getting it incrementally.

Also the first stage in development is on ground infrastructure mainly isn't it? So that's the first stage in improving the 'business', which allows the on-field Chiefs to expand and develop, which is generally associated with bigger crowds.

All sounds very good and well planned out. Well done Chiefs and they should be a marker for everyone else wanted to develop.

HammerofThunor wrote:
All sounds very good and well planned out. Well done Chiefs and they should be a marker for everyone else wanted to develop.

In too many areas of life people want everything now. Exeter are a good example of a club who have developed and seem to have a longterm plan.

Harlequins are another who deserve a lot of credit. During the professional era they have developed their ground, tripled attendances and developed their own players.

I noticed on the Exe TV clip on the offy site that Chief Exec Tony Rowe referred to ERC as the only member-owned pro-club - but that's not right, is it? I thought that Tigers are too?

'twas also interesting to learn that Exeter Chamber of Commerce estimate that the rugby club brings about £10m boost to income in the area per annum, which could rise to £25-30m when the new stadium is completed - guess its easy to see why they are so supportive. Any similar numbers for other clubs and their impact on the local economy?