The full extent of financial trouble at Jersey Reds was outlined to members at an emergency meeting last night. They were told that the club would have to restructure just to raise enough money to complete the current season.
Their plan involves selling key assets such as the club house in St Peter, the stands, the pitches and car park to raise £1.5million, and then renting them back from the new owners. There is also to be what's being described as a full "strategic review" of the club.
Members were presented with accounts showing significant losses for the three years to June 2016, plus a further deficit anticipated for this year.
It's been a confusing picture over the last 24 hours, when club officials were still describing last night's meeting as just the annual meeting to discuss the company's finances, which takes place every Autumn.
Then this morning, the Club hit out at what's it's termed "inaccurate media coverage," before issuing their own statement confirming the need to raise £1.5million through an emergency asset sale, in order to complete the current season. That sale to what have been described as "third-party owners", comes with the option to buy back the assets after three or five years.
Chairman Mark Morgan said: "Following the conclusion in late September of a full review of the club's financial position, the full extent of the financial challenges encountered in recent seasons has become apparent.
"The investment required to operate a fully professional rugby squad in the English Rugby Championship has necessitated major investment by the club over the last few seasons. In addition to the costs of the playing squad itself, satisfying the criteria to play in the Championship in terms of maintaining quality playing surfaces, coaching team, medical facilities, spectator facilities, floodlights and administrative support has required a significant level of commitment. The club’s assets have appreciated in value to reflect the substantial physical improvements.
"Our focus has been on firmly securing the club’s position in the first instance, which then allows us to undertake a full strategic review on the club’s future beyond the end of this season as a priority.
"It is also our priority to protect grassroots rugby, and I am pleased to say, the club's amateur teams, including minis and juniors, continue to go from strength to strength and remain largely unaffected by this situation."
The Chairman continued: "The decisions regarding the restructuring were not taken lightly. The joint working group included representatives from all parts of the club and it was recognised that we needed a swift solution that would enable the club to continue operating while options for the longer term are considered.
"A Strategic Review Board will now be convened in order to undertake a thorough review of the club's situation, and the board's findings will enable us to address the future with our members at a further EGM to take place by the end of January 2017."
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