Could Jersey Reds be bailed out by taxpayers cash?

Wednesday 16 November 2016

The unfolding drama over the finances of Jersey's rugby club took an unexpected twist yesterday, with a senior Minister suggesting the States would be prepared to step in with public money.

Last week Jersey Reds announced they were in deep financial trouble and had been forced to sell their own St Peter ground, car park and clubhouse on a sale-to-leaseback agreement, a scheme which raised £1.5million in capital, money which was urgently needed to see them through to the end of the current season.

The club’s difficulties were compounded last night as Reds stalwart Bill Dempsey, instrumental in their rise through the leagues to the second tier of English rugby, resigned his position as Director of Professional Rugby.

The club has announced a wholesale strategic review of finances, to be undertaken with current Chairman Mark Morgan at the helm.  

But in yesterday’s States assembly, Economic Development Minister, Senator Lyndon Farnham, was asked whether the States would become involved if the Reds’ financial difficulties carry on into next season.  

Deputy Montford Tadier asked: “Given the importance that Jersey rugby has, which we all agree with, not just in economic terms but across the board, would he give an undertaking that if necessary his department would be willing to underwrite the future of Jersey Reds to make sure they are successful and so they can’t go under?

And Senator Farnham replied by saying the States would step in, rather than seeing the Island lose professional rugby:

He said: “I am sure all members would join me in saying that we would not sit by and let professional rugby in this island disappear because of financial restraints.  

“However, it is only right Jersey rugby club are given time to sort out their own financial affairs. That’s exactly what they have done and I commend them for doing that.

“They have made new financial arrangements which will see them through the rest of this year and set them up, hopefully, for the next five years.”

Senator Sarah Ferguson asked the Minister whether the States’ sponsorship of the rugby club and a £75,000 grant given to the Reds four years ago represented value for money.

Senator Farnham, who revealed the States’ current sponsorship amounts to £18,000 this season, said: “Our sponsorship is good for the Island. The club has a huge following and the sponsorship benefits our youth and is part of our inward investment programme.  

“We get an excellent return. You can’t quantify the total benefit, but taxation from high net worth individuals probably repays the sponsorship twice over. Sponsorship of sport helps to build communities.

“The going is getting tougher for Jersey rugby club and rather than tossing a few grenades into the equation we should be getting behind them and supporting them.”

Senator Ferguson said: “I am a big supporter of the rugby club, in particular the excellent work the academy does.”