Jersey Reds hit back at Ministers

Wednesday 04 October 2023

Senior figures at Jersey Reds have hit back at Ministers for comments made ahead of a key vote on whether the Government should step in to help the club complete the season.

It was confirmed last week that the club had ceased trading, and was unable to pay September salaries.

Former Economic Development Minister Lyndon Farnham – under whose tenure in Government the Reds received hundreds of thousands in grant funding – put forward a proposition asking the Treasury Minister to take the "necessary steps" required to help the club complete the 2023-2024 season. Debate opened yesterday afternoon in the States Assembly and continued this morning. 

States Members ultimately voted to reject the plan.

Ahead of that debate, Economic Development Minister Kirsten Morel yesterday released a critical report to States Members and a statement about Government's interactions with members of Jersey Reds' operational and investment boards. A letter from his Assistant Minister, Deputy Lucy Stephenson, to one of the Directors of the latter, Mark Chown, was also released to the States Assembly.

This morning, Jersey Reds released a statement hitting back at what they described as a "significant amount of disinformation being circulated" and denied that they had refused to meet Deputy Lucy Stephenson, who holds political responsibility for sport.

They also said that representatives from Jersey Reds chased for an update on a Government decision for additional funding in the eight-day gap between the Council of Ministers deciding not to provide money and the club being informed.

Pictured: Lyndon Farnham has put forward a proposition calling on the Government to take steps to help the Reds complete the season.

It has been confirmed that Ministers met on Tuesday 19 September to discuss a funding package that would have gone towards helping the Reds through the 2023/24 season.

The Council of Ministers rejected the decision but nobody at the club was told until Wednesday 27 September, with the players and staff due to be paid two days later.

Last Thursday, the entire squad, including players who had been due to meet at the Airport to travel to Cornwall for a Premiership Cup match, were called to an emergency meeting to confirm that the Reds were to cease trading with liquidation appearing inevitable.

The statement on the Reds website reads: "The representatives of Jersey Reds are deeply disturbed by the significant amount of disinformation being circulated. Gordon Crawford and Mark Chown are not and have never been directors of the operational club. They are directors of the new company whose sole purpose was to raise funds from benefactors and pass it on to the club.

"While it is clearly the States' decision to back the Reds or not, it is entirely unnecessary and simply vindictive to attempt to malign the individuals concerned. These people have invested an enormous amount of their own time and in some cases millions of pounds over many years to help create what has become an iconic Jersey brand. Nobody has been paid a single penny for their work – nor would they expect to be. Volunteers should be cherished, not victimised.

"With regards the outstanding items around deferred taxes and the Covid loan, these are items have been through due process with and agreed by government and are like the support offered by government to many businesses in Jersey."

The Government had provided £370,000 of emergency funding to the club between July and August. During Tuesday's States sitting, Assistant Economic Development Minister Lucy Stephenson was asked why there was an eight-day delay between a ministerial decision being taken and the outcome being disclosed to the club. She said the Government had difficulties in getting hold of them.

However, Express understands that the club requested updates on at least two separate occasions between 19 and 27 September. On 23 September, the Reds played Exeter Chiefs at home – a match which was attended by Chief Minister Kristina Moore.

The Reds statement continued: "We understand [Deputy] Lucy Stephenson stated yesterday that we have been rejecting offers to meet with her, this is untrue. The last meeting we had with her was in November 2022. We have received no requests to meet with her since then. And in the two recent meetings with ministers, she did not even bother to turn up even though others joined remotely. It seems strange that a Sports Minister would show so little interest in interacting with what is the Island's pre-eminent sports club, particularly where there so much government financial involvement.

"[Deputy] Kirsten Morel refused to provide an update of the decision of 19 September Council of Ministers [meeting], despite two email requests, until eight days after the decision was taken. Even then, he provided it to an incorrect party who was not an officer of the Jersey Rugby Club (Trading) Ltd which was the vehicle to which the government was providing funding. This failure to provide any update immediately, effectively condemned the Reds to cease trading as there was no time to find an alternative solution with just hours left until funds were required to pay wages. An update on day one would have at least given the Reds a chance to try to bridge the gap."

The meeting between Deputy Morel and the club was not attended by either of Reds Chair Mark Morgan or Brian Morris, the two directors of Jersey Rugby Club (Trading) Ltd – the company responsible for the business activities of Jersey Reds.

The Reds also claim that the organisation's accounts are "up to date" and have been "consistently and openly shared with government ahead of them granting any tax deferrals, loans, or grants".

It continued: "The latest example of this is the open sharing of financial data with officers and Santander to facilitate the Santander review which Government requested of Santander in June 2023 . This engagement by government also superceded Lucy Stephenson's January letter, we believe."

Last year, the professional and amateur arms of the rugby club were split, allowing Jersey RFC to enter the English league system.

"This has been effected and the amateur club is debt free and owns the assets at St Peter," the Reds statement continued. "In order to sustain professional rugby investors/benefactors provided about £1,000,000 in funding for the 2022/23 season, out of £1,500,000 committed over a three-year period. In the event despite meetings with 30+ potential HNW investors in the last year further funding proved difficult to obtain.

"The government were asked for support in the June-October period in order for the Reds to confirm additional funding which was under discussion. Pledges of £500k+ for the 2023/24 season were received but were contingent on Government of Jersey support. When Government of Jersey declined the final £350k support on 27 September, this funding fell away and the directors of Jersey Rugby Club (Trading) Ltd resolved to cease trading to protect the interests of all creditors."

Speaking to the Assembly, Deputy Farnham suggested that each pound spent by the Government to support the club brought around £25 in economic benefit to the island.

Deputy Farnham met with the scores of Reds supporters who rallied at the States Chamber yesterday to show their support for the team. It followed another supportive rally on Friday – at the Reds' home turf, the Stade Santander in St Peter – organised by long-term fan Dominic Boletta.

At the start of the second day of the funding debate this morning, Attorney General Mark Temple offered further thoughts on an amendment by Deputy Moz Scott, incorporated into Deputy Farnham's proposition, that representatives from the Treasury Department and the private sector join the Reds board.

Mr Temple said that even if these representatives were designated as advisors, if their advice was adopted by the board they could then face unlimited liability in the event of insolvency.

"This is a significant potential risk," he said. "A further problem is that the company appears to be teetering on the brink of insolvency, and if it did fall into insolvency then the liquidators would be obliged to look into the conduct of its affairs."

Deputy Sir Philip Bailhache, a former Attorney General, described his successor's advice as "illuminating".

He said: "The man or woman from the Treasury may become personally liable, but as they were acting in the course of their employment, the employer would assume liability, and as a member of that employer – the States Employment Board – I am bound to express my concern.

Deputy Bailhache said the position was an example of Members "standing on the brink of a completely shambolic outcome because they are trying to do the right thing in a rather sad situation".

Constable Mike Jackson said he wished to congratulate the current Government "for having the courage to stand up and bring this out into the open".

The Constable said that Deputy Farnham had created the "quite unsatisfactory" situation in his "past life" as Economic Development Minister. This brought an objection from Deputy Farnham, but Mr Jackson stood his ground and said that Deputy Farnham had been responsible for payments to the Reds during the previous Government.

Several Ministers lined up to support the Government's position.

Children's and Education Minister Inna Gardiner described the Reds as "a poorly-run business with a very well-run team", while Environment Minister Jonathan Renouf said there had been at least two "last chances" for the Reds during the past summer.

He said: "There has been what might be called 'systematic optimism bias' [from the Reds], which would more fairly be called 'wishful thinking'."

Deputy Sam Mézec said that while he knew "almost nothing" about rugby, he appreciated that "thousands and thousands" of islanders took "a great deal of enjoyment".

He said: "There are many benefits, some quantifiable, such as those to the economy, but others unquantifiable such as the impact on people's social lives and their health and fitness."

Long-term Government support to LibertyBus was used as a comparison by Deputy Mézec – in both cases he said the organisations were "economic enablers" and funding them was justifiable.

Housing Minister David Warr said he had sympathy for the staff affected, citing the Bob Dylan lyric about them being "pawns in the game", but said he had major concerns.

"The Government would be acting as the banker in a casino game," he said. "The gamble paid off – Team Red landed on red [winning the Championship], so why not just stop there?

"Like a gambler that wins big, they hoped they might win bigger – maybe they would, but at what cost to other sports?"

Deputy Moz Scott compared the levels of funding provided to the Reds to a body such as Visit Jersey, which she said had received £5.75million last year.

"What benefit came from that, how did it fill hotel beds in the shoulder months?" she asked, saying that a 're-set' was required for how the Government funded arms-length organisations.

Addressing the proposed funding for the Reds until the end of the 2023/24 season, Deputy Scott said: "This is not the time to pull the carpet away, but to give support for a bridge to a brighter future – if this leads to a brighter future, there will be no need to jump in."

Constables Kevin Lewis, Mark Labey and Deirdre Mezbourian all said they would have liked to have supported the Reds, but saw too much potential risk and too many unanswered questions for them to be able to do so.

A relief fund was set up at the end of last week to allow islanders to help the team, while Hawk Group were also praised on Monday for stepping in to support the Reds with September salaries.

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