'If I'm to put a timeline on where this takes us back to, it's years... we face severe challenges'
Nick Johnston is well versed on the rugby scene. Northampton, Worcester and Sale are all clubs he has worked at in a lengthy career where he successfully branched out into high-performance sport and business consultancy. But he has never known a week like the nine days just gone.
Twenty minutes notice was all the head-ups the Coventry managing director received that the RFU were pulling the plug on the Championship season last Friday week. With it, plans meticulously laid last summer when he first came on board at Butts Park Arena went up in smoke.
Bad enough having to come to terms with the RFU’s snap February decision to halve its annual £530,000 second-tier club grant. Now a hole burned right through the midlands club’s financial projections, the governing body terminating the 2019/20 season with Coventry still having four homes matches to go.
They had been on track to encouragingly grow business revenue to £2.5million, up about £500,000 on a year ago, but the coronavirus-enforced shutdown has caused revision. Last weekend alone, the loss of the Newcastle Falcons fixture at Butts denied them around £120,000, anticipating takings they cannot claw back with a refixture due to the RFU’s season-ending declaration.
Add in how their insurance broker has also refused to stump up on a policy that provided business interruption cover for notifiable diseases and it makes for quite an extraordinary headache. “It has been difficult because you’re dealing with people’s lives,” said Johnston to RugbyPass.
“With the uncertainty that comes with that – and the uncertainty out there in the world because we’re learning about this situation on a daily basis – it’s about keeping people informed as much as we can and keep communicating. It’s been challenging, a long week, but I can’t speak highly enough of people who work at Coventry Rugby Club and their understanding, response and collectiveness to get through this together.
“It just tells us we have the right people on the bus moving forward. They have said, ‘Look, let’s just get through this together’. I’m sure other clubs are like that because that is what the game tends to bring, good values and good people, and we haven’t had one negative comment. We’re really proud of how our people have responded.”
Brass tacks: is the Coventry business model sufficiently robust to cope at a time when even the Championship’s leading club Newcastle have placed their players and staff on a furlough, a period of unpaid leave? “We have taken similar steps,” he volunteered. “We know what it’s going to look like for the next four months minimum and we will just work through that period of time, but there are some clubs I hope who get external help.
“I hope we all get some external help because I would hate… it would be disastrous for the game if we lost clubs during this period because there is undoubtedly some clubs at risk here, including ourselves to a certain extent. We’re not outside that bracket. We’re right in the middle, but you have just got to work through it methodically, make the right decisions – and some of them are hard decisions because you’re dealing with what the club looks like post-coronavirus.
“It has put us under huge strain. I’m not going to hide away from that. We have been pretty open and have managed to keep things going, paying everybody properly this month fully. But moving forward we have to be honest with them, things may change. It depends on the level of support from the government, helping us around wages, but we are yet to hear unfortunately from the RFU.
“We don’t even know if there is a next season because we haven’t signed a participation agreement because we haven’t agreed on funding yet – we’re still in dialogue as a group of clubs and that’s still ongoing. The RFU cuts were bad enough. There was a level of restructuring going on as it was but now we’ve no income, simple as that.
“We’re a proper rugby club with a great fanbase, great supporters who have been brilliant in the last couple of weeks around this matter in particular and the funding. But the business has just stopped to a halt. If I’m to put a timeline on where this takes us back to, it’s years. We’re trying desperately to keep hold of everybody, but we face severe challenges.
.@englandrugby announced this morning at some 20 minutes' notice that the 19/20 @champrugby season has ended with immediate effect. Here is the Coventry Rugby perspective: https://t.co/GflETARRds
1/2 pic.twitter.com/wmQ14UEjAS
— Coventry Rugby (@CoventryRugby) March 20, 2020
“We’ve written a plan for our recovery strategy that keeps the business upright, keeps it going, but dependant on time, our liability will have to reduce. Our main cost base is salaries, so we have to look at that on a monthly basis and that is what we’re planning to do. Then we have got to plan beyond that because we envisage an economic downturn. We have a duty to our community to make sure when we are open, they can come and watch rugby and there isn’t a financial hurdle to stop them from doing that.”
For a once-proud club drifting in the National League set-up not so long ago, Coventry’s rejuvenation has been one of the recent success stories of English grassroots rugby. Johnston’s appointment last summer to target further commercial growth was reflected in how a now generally winning team – Coventry had reached fourth place with seven games remaining – had become a popular drawcard, the midlanders only behind Newcastle and Bedford in the cumulative home attendance figures when the season terminated.
Shrewdly picking up the pieces will be a monumental task. “You had a feeling something wasn’t quite right, you could see what had happened around the world in Asia and the close down. You had to err on the side of caution, so we started planning but ultimately to where we are today [lockdown] it’s hard to imagine and really unprecedented. We have had to work quickly and quietly to keep the ship steady, but we still haven’t had an offer or any communication around what RFU help looks like.
“I’m presuming they are working on it but if you look at Super League, they put a plan together and have gone to the government for a bailout. Then you get the precursor unfortunately of the RFU getting it out there early that this (coronavirus) is going to cost them £45m/£50m. That’s drastic and unfortunate like it is for us all, but I’d like to look at those numbers a bit more carefully.
No holding back here…https://t.co/rbyeldBI0d
— RugbyPass (@RugbyPass) March 20, 2020
“The average RFU wage is £71,000, in the FA it’s £53,000. They have significant costs but they’re a big union, probably the biggest in the world, and have a duty of care to the whole game, not just elements of it. Hopefully, they will come to the table. That is one of our frustrations.
“We have also got huge frustration around our insurance. We think it’s morally wrong what our insurance company are doing to us in particular and thousands of other businesses because we have a policy that has got business interruption for notifiable diseases.
“They are stating we can’t claim because we haven’t had a proven case of Covid-19 on the premises. We have self-isolated so many people who have been on our premises in the last month with all the symptoms, but no one can physically get a test because they aren’t available so where does the burden of proof lie?
“We can’t prove we had one, they can’t disprove we haven’t had one. That may come with an antibody test, but they have a moral obligation. They take the premiums and should be good corporate citizens. That is why we have launched a petition on change.org to get some attention because we’re one of tens of thousands of businesses, including other clubs in the league, like this.
Hundreds of people have signed our petition, but more importantly other small/med businesses have contacted us to say their insurers are not honouring their business disruption clauses. So sign at https://t.co/q33dAW0mT3 and share with your friends!
— Coventry Rugby (@CoventryRugby) March 27, 2020
“It’s just wrong, fundamentally wrong, and the government should intervene on this at the highest level. We just can’t see the logic on why they aren’t paying out. Our insurance policy is £3,000 a month and by definition, they should pay out, but it’s an insurance company and they seem to be wriggling out of all angles and in all directions at the moment.
“We have now got legal opinion and think we’re in a strong position as it stands, never mind if we get a positive test. That inevitably will come because of the mass infection, but it’s a strange position they have taken and we will pursue it vigorously. We aren’t rolling over. Even if it drags on into next year, this is a point of principle and morality for us.”
Mention of next year, before the coronavirus stoppage happened there were moves afoot to formulate a plan to make the Championship more self-sufficient given the funding cold shoulder received from an RFU in a climate where the gap between the haves of the Premiership and the have-nots of the second tier are stark.
“The gap has been created for obvious reasons. It’s financial ring-fencing rather than performance ring-fencing. The game needs to have a long, hard look at itself in this country. Hopefully, this will be the jolt that everybody stops, dusts themselves down and says, ‘Let’s just do things properly going forward and make sure things are equitable if you get up’.
The Championship clubs – which will include Saracens next season – have asked Griffiths to find a way of making the twelve-team second-tier division a viable operation.
Griffiths confirms new role to @chrisjonespress https://t.co/OhyiUaVyK0
— RugbyPass (@RugbyPass) March 12, 2020
“The team that comes down keeps their central funding and gets a parachute payment of £1.3m. You rate that against our current central funding – you’re never going to win that race to the top, are you? You go up and you’re not even a shareholder. They get £6.5m, you get £1.4m approximately. That has all got to change.
“We’re still working on a plan with Ed Griffiths. He phoned me up, offered his services, so I passed it onto the league and the clubs have taken it on. It’s a piece of work that has gathered pace for obvious reasons and it’s positive. It’s not finalised and it isn’t about breaking away. It’s about working closer with the union and with PRL but having an element of independence and control. We just need to get all the ideas on the table and if we do that we will come up with something good that is right for eleven clubs.
“One of the ironic RFU statements when they cut our funding was a return on investment and financial viability, then quoting £265,000 of average debt which is normally mopped up, like most sports club, with a benefactor. We’re no different at Coventry. We have Jon Sharp. His choice is to fund that club because that is his passion, that is his life. He loves Coventry and loves the people of Coventry. That is why he does it. He doesn’t do it for his ego. He’s not driven that way.
“But when you start looking at financial viability, the average debt of a Premiership club is £3.8m or thereabouts, so the argument is flawed… let’s just hope the game gets sorted out now. We shake ourselves down, get on and work together because that is the key, working together. Ultimately we want to produce good English rugby players, good English coaches, physios, strength and conditioning coaches so England are good.”
WATCH: Finn Russell chats to Jim Hamilton in the latest episode of The Lockdown, the new RugbyPass series
Comments on RugbyPass
I remember towards the end of the original broadcasting deal for Super rugby with Newscorp that there was talk about the competition expanding to improve negotiations for more money - more content, more cash. Professional rugby was still in its infancy then and I held an opposing view that if Super rugby was a truly valuable competition then it should attract more broadcasters to bid for the rights, thereby increasing the value without needing to add more teams and games. Unfortunately since the game turned professional, the tension between club, talent and country has only grown further. I would argue we’re already at a point in time where the present is the future. The only international competitions that matter are 6N, RC and RWC. The inter-hemisphere tours are only developmental for those competitions. The games that increasingly matter more to fans, sponsors and broadcasters are between the clubs. Particularly for European fans, there are multiple competitions to follow your teams fortunes every week. SA is not Europe but competes in a single continental competition, so the travel component will always be an impediment. It was worse in the bloated days of Super rugby when teams traversed between four continents - Africa, America, Asia and Australia. The percentage of players who represent their country is less than 5% of the professional player base, so the sense of sacrifice isn’t as strong a motivation for the rest who are more focused on playing professional rugby and earning as much from their body as they can. Rugby like cricket created the conundrum it’s constantly fighting a losing battle with.
3 Go to commentsOh wow… “But as La Rochelle proved in winning in Cape Town this season, a cross-continental away assignment need not spell the end of days.” La Rochelle actually proved quite the opposite. After traveling to Cape town and back they (back-to-back and current champs) got mercilessly thumped the next week. If travel is not the reason, why else would a full-strength powerhouse like La Rochelle get dumped on their @r$e$ one week later?
26 Go to commentsYou know he can land a winning conversion after the full time siren is up. (Even if it takes two attempts.)
5 Go to commentsA very insightful article from Jake. I would love to know how South African’s feel about their move to Europe. Do you prefer playing in Europe or want to go back to Super Rugby?
3 Go to commentspure fire
1 Go to commentsA very well thought out summary of all the relevant complications…agree with your ”refer the Cricket Test versus 20/20 comparison”. More also definitely doesn't necessarily mean better!
3 Go to commentsMust be something when you are only 19 y.o and both NZ and France want you. Btw he wasn’t the only new caledonian in french U20 as Robin Couly also lived in Noumea until 17. Hope he’s successful wherever he chooses to play.
7 Go to comments“Several key players in the Stade Rochelais squad are in their thirties” South Africans are going to hate the implications of that comment!
5 Go to commentsI know Leinster did a job on La Roche but shortly after HT Leinster were 30-13 ahead of them and at a similar time Toulouse were trailing Exeter. At 60 mins Leinster were 27 ahead but after 67 mins Toulouse were only 19 ahead before Exeter collapsed. That’s heavier scoring by Leinster against the Champions. I think people are looking at Toulouses total a little too much. I also think Northhampton are in with a real chance, albeit I’d put Leinster as favourites. If Leinster make the final I expect them to win by more than ten and with control.
5 Go to commentsHey Nick, your match analysis is decent but the top and tail not so much, a bit more random. For a start there’s a seismic difference in regenerating any club side over a test team. EJ pretty much had to urinate with the appendage he’d been given at test level whereas club success is impacted hugely by the budget. Look no further than Boudjellal’s Toulon project for a perfect example. The set ups at La Rochelle and Leinster are like chalk and cheese and you are correct that Leinster are ahead. Leinster are not just slightly ahead though, they are light years ahead on their plans, with the next gen champions cup team already blooded, seasoned and developing at speed from their time manning the fort in the URC while the cream play CC and tests. They have engineered a strong talent conveyor belt into their system, supported by private money funnelled into a couple of Leinster private schools. The really smart move from Leinster and the IRFU however is maximising the Irish Revenue tax breaks (tax relief on the best 10 years earnings refunded at retirement) to help keep all of their stars in Ireland and happy, while simultaneously funding marquee players consistently. And of course Barrett is the latest example. But in no way is he a “replacement for Henshaw”, he’s only there for one season!!! As for Rob Baxter, the best advice you can give him is to start lobbying Parliament and HMRC for a similar state subsidy, but don’t hold your breath… One thing Cullen has been very smart with is his coaching team. Very quickly he realised his need to supplement his skills, there was talk of him exiting after his first couple of years but he was extremely shrewd bringing in Lancaster and now Nienaber. That has worked superbly and added a layer that really has made a tangible difference. Apart from that you were bang on the money… 😉😂
5 Go to commentsNot sure exactly what went wrong for him at Glasgow but it’s pretty clear he ain’t Franco’s cup of tea. Suspect he would have been better served heading out of Scotland around the same time as Finn, Hoggy and Jonny!
1 Go to commentsBulls disrespected the Northampton supporters and the competition. Decide quickly, fully in or out.
26 Go to commentsI wonder if Parling was ever on England’s radar as a coach? Obviously Borthwick is a great lineout coach, but I do worry he might be taking on too much as both head coach and forwards coach.
1 Go to commentsJason Jenkins has one cap. When Etzebeth was his age he had over 80 caps. Experience matters. He will never amount to what Etzebeth has because he hasn’t been developed as an international player.
2 Go to commentsSays much about the player picking this gig over the easier and bigger rewards offered to him in Japan. Also says a lot about the state sanctioned tax benefits the Irish Revenue offers pro rugby players, with their ten highest earning years subject to an additional 40% tax relief and paid as a lump sum, in cash, at retirement. Certainly helps Leinster line up the financial ducks in a row to fund marquee signings like this!!! No other union anywhere in world rugby benefits from this kind of lucrative financial sponsorship from their government…
5 Go to commentsTrue Jordie could earn a lot more in Japan. But by choosing Leinster he’ll be playing with 1 of the best clubs in the world and can win a champions cup and URC…..
6 Go to commentsThanks for that Marshy, noticed you didn't say who is gonna win it. We know who ain't gonna win it - your Crusaders outfit. They've gone from having arguably the best Super Rugby first five ever, to having a clutch of rookies. Hurricanes all the way!
1 Go to commentsGeez you really have to question the NRLs ability to produce players of quality. Its pathetic. Dont the 25mil in Aus produce enough quality womens players. Sad.
1 Go to commentsBulls fan here, and agree 100% with the conclusion (and little else) of this article. SA sides should absolutely f-off from the champs cup until we get fair scheduling, equal support for travel arrangements and home semis. You know, like all the european teams get.
26 Go to commentsI’m yet to see why Grace would be an ABs contender. He’s pedestrian and lacks the dominance required of a top flight 8.
11 Go to comments