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How is this for a scenario?
Discussion started by Penn Wasp , 15 February, 2020 00:11
How is this for a scenario?
Penn Wasp 15 February, 2020 00:11
There is a squeeze on cash at the club.

The Wasps Exec are planing on
- not to go down this season,
- not to qualify for Top 6 .
- hoping to make the Challenge Cup next season (maybe this, but not counting on it)
- attendances not to miraculously increase and at best to stay flat
- no big sponsorship deal for the Ricoh, and JLR not getting back to initial levels of support.
So revenue to at best stay flat (though quite possible will reduce as people increasingly get disgruntled with the entertainment and results).

And costs whilst high, need to be cut whilst ensuring we can stay up next season as well.
So the squad next season will be light on expensive galacticos, and maybe we won't get Goode and Loz after all, even if we will be saving on Lima, we will be very light at SH (only Jacob) centre (Gops cannot have much left in the tank), full-back (though Minozzi is playing far better for Italy than Wasps). Hoping we don't lose the front row that we have and second row injuries improve).
And let's face it, unless Dai resigns, we would have to pay off his contract and get a SH replacement (or 3) .

CVC money will give us 2 years of cash against the losses.
DR cannot continue to sustain loses at the current run-rate we.
so.....
Might it be that DR cannot personally continue to finance his (wonderful) dream and is looking for an investor / new owner for additional investment?
And in my mind, getting additional investment is needed or we will not have enough to break the spiral and get back to Top4 and challenge for honours.

Related;
Personally, I think it more than likely that the club had an ambitious 5-year plan - but we have not grown the revenue in-line with that plan.
So suggest that the Chairman who was CEO at the time must take some responsibility for that (and in my humble opinion, had and has a job way beyond his capabilities).
OK, we have 2 new CEOs, but is that improving the financial performance or increasing our overhead?

and btw, next season, the 2 ambitious and funded clubs (Cornish Pirates and Ealing) will likely slug it out for promotion, joining Newcastle in the Premiership.



Edited 1 time(s). Last edit at 15/02/2020 00:12 by Penn Wasp.

Re: How is this for a scenario?
Wilberforce 15 February, 2020 06:39
Our biggest problem is the failure to make money out of the stadium away from the rugby. Cost have spiralled out of control and revenues have entirely failed to keep up.

Re: How is this for a scenario?
wombles222 15 February, 2020 07:25
As much as I would love it to be rugby behind the internationals is not a cash cow, and certainly going only one league down to the Championship shows that we are much more a minority sport than maybe some give due notice towards.

One of the main problems that has been noted over recent years is the increased wages, Sarries have done a lot of things wrong to our game, but one of focus here is that due to the deep pockets of Wray clubs were paying higher figures to garner the services of top players, and indeed having to dig deeper still to pay for the marquee signings...all well and good if you are in a business that earns the high 10s to 100s of millions not so good in our sport, all clubs bar Sarries whose owner wrote off the debt, and Exeter who run at a nominal but admirable profit have suffered due to this.

Our move to Cov required us to speculate to accumulate, indeed putting together a team with known names did help in the short term and also in league position, however cutting our cloth to ensure survival is no bad strategy as now we are embedded in the area, have our academy starting to roll and bear fruit that is where longer term success and titles will be achieved from. Prudent signings rather than mass in and outs will also be beneficial.

Getting a permanent training base is key (and wherever you build it there will always be nimbyís so I am not concerned with the noises and objections coming out of our recent plan, it would happen anywhere). But we have the strength of a multi use facility and a source of multiple revenues. It would be prudent to get Cov City back at the ground, and to be honest they do not have the finances or support to build a new stadium. They can be successful at our ground, however we must ensure it is primarily a rugby ground, with us holding primacy and also the permanent fixtures Wasps, but allowing for temporary colours and signage to be in place so The round ballers feel at home when they play. However we cannot offer them a deal like last time, it HAS to be agreeable to them, but also markedly profitable to us, any other option is not acceptable. I do not think things are as bad as they seem, just a little fallow at present, however our future can indeed be bright.

Re: How is this for a scenario?
kentwasp1 15 February, 2020 07:45
Good post Penn. My views are well known being we are in much worse financial trouble then most think.
The £16m CVC windfall was swallowed up in last years £12m losses, on top of £10m loss year before
Next year is the run up to 2022 repayment of the £35m bonds, which the bond holders think may not happen and are junk
Derek is owed around £20m
Results for 6 months to Dec are out soon
Wasps are nowhere near any playoffs and indeed not even in Europe, which the business plan sold to the bondholders assumes
Eastwood presided over this colossal mess and has to go
Then we need a new and massive sugar daddy investor and honour Dereks debts
Suspect one scenario is the Ricoh has to be sold , assuming anyone wants it, to repay some of the above
The. We are back at square one from the position at AP

Re: How is this for a scenario?
wombles222 15 February, 2020 07:54
Do you not think KW that we are a far more attractive business with the Ricoh than without? I would say the chances of getting a owner with far greater resources is higher as owners of a stadium than without. I cannot see us going back to the AP/Nomadic days as it would be even less viable.

Re: How is this for a scenario?
kentwasp1 15 February, 2020 08:08
Quote:
wombles222
Do you not think KW that we are a far more attractive business with the Ricoh than without? I would say the chances of getting a owner with far greater resources is higher as owners of a stadium than without. I cannot see us going back to the AP/Nomadic days as it would be even less viable.

Yes Wombles. Of course we are. But it is our only asset as well as being a loss making white elephant. Itís literally ( for rugby attendance and hollow experience) and financially too big for us
What I mean is the bond holders have collateral over any assets and unless we can find a spare £35m ( no further city financing will be available based on our horrendous losses) , and more to repay Derek, they will enforce a fire sale

Re: How is this for a scenario?
Gaz 15 February, 2020 09:32
Surely next season Saracens will bounce back up? Pirates & Ealing are ambitious but way behind Saracens, even if Sarries lose a dozen first teamers?

Re: How is this for a scenario?
neils 15 February, 2020 09:43
And no matter what we are in the Challenge Cup already.

Re: How is this for a scenario?
coddy 15 February, 2020 14:00
I can't agree with much of the original post, I mean Jacob a Scrum Half???

Re: How is this for a scenario?
Buzzboy 15 February, 2020 14:13
Certainly a long way from being the wealthiest club in Europe, which is what we were touted as being when we bought the Ricoh, casino etc and all.
Thanks to Derek for helping us through all this, very generous indeed. But heís a businessman as well as Wasps fan, and canít sustain these losses.
Worrying times indeed.

Re: How is this for a scenario?
John Tee 15 February, 2020 14:57
I think it is a concerning time for many clubs...Wasps are on a squeeze but maybe it looks worse because other clubs havent hit the same buffers yet.
The Saracens scandal has left rugby looking very poor indeed to the other sports fans who may have taken notice..and possibly more interest ..from the showing in the world cup but i think they've run a mile from a bent game and lack of real action, which is apparent because Saracens are still in one cup, still affecting...or pretty much distorting league results, coupled with no relegation for the other clubs, means there is much of a league at all.

So, the issues for Wasps just need surviving somehow...other clubs will run aground too in time because recent events have been a massive turnoff, even for regular fans.
This is the legacy of Saracens and unless fans perceive it as being addressed...and a year in the championship isnt addressing it at all imv, because what will have really changed.
That is why a fine and relegation is nothing... they need to find the guilty parties and ban them. For the good of rugby as a whole.
Wasps by comparison, need to cut or slash their cloth. If they can do this, the next few years will amount to a transition. Not ideal, but hopefully, not fatal

Re: How is this for a scenario?
John Tee 15 February, 2020 15:03
Further to this, and further off topic, possibly, no one wants to see Chiefs win...except Chiefs fans who are still high on their recent success and ascendancy...no one wants to watch Saracens play, even their own fans who are low on numbers anyway... so rugby needs to change quite fundimentally to attract more fans..and they need to do it by making rugby a more watchable game.

Re: How is this for a scenario?
westwaleswasp 15 February, 2020 17:11
Wasps had a watchable game that was the envy of many. Then WLR, Daly, Wade, Cipriani left, and we lost our spot as a team neutrals could watch. It is possible to play bums on seats rugby well, but not by signing Limas of this world. Efficient rugby is often dull, and when the Ws don't come it is a huge turn off. Nobody would watch Chiefs if they lost playing like they do.
It does not help that our national coach is a see you next Tuesday as a bloke and as a selector is fixated on a power game. Warren Gatland at Wales and Schmidt at Ireland produced utterly uncompelling tosh whilst winning slightly too often for the good of the game, even if the NH needed a boost. SA won a world cup and are probably the worst winners of the competition in its history, so there is an issue with the game in general, but a lot of our wounds are self inflicted.



Edited 1 time(s). Last edit at 15/02/2020 17:50 by westwaleswasp.

Re: How is this for a scenario?
Shugs 15 February, 2020 19:05
Not worried about the financials at all. If we had zero cash we'd be staying at Broad Street. People say we've no high profile players. Of course we have. They may not be having the same impact as a Le Roux (for one season) or a Beale (for a handful of games) but Sopoaga, Fekitoa, Shields etc won't be cheap.

Re: How is this for a scenario?
kentwasp1 15 February, 2020 19:49
Quote:
Shugs
Not worried about the financials at all. If we had zero cash we'd be staying at Broad Street. People say we've no high profile players. Of course we have. They may not be having the same impact as a Le Roux (for one season) or a Beale (for a handful of games) but Sopoaga, Fekitoa, Shields etc won't be cheap.

Iím incredulous. How can you be not worried about losing £20m in 2 years and about to lose the stadium as we owe people over £60m that we donít have?

Planet Zog

Re: How is this for a scenario?
Shugs 15 February, 2020 20:10
Let's see how it plays out Kent. I may be on planet zog but I know the difference between what's down on paper and what's actually happening in the ground. I accept we may be verging on plan B but within the long term planning plans all the way down to Z will have been considered.

Re: How is this for a scenario?
Wilberforce 15 February, 2020 23:44
Quote:
Shugs
Not worried about the financials at all. If we had zero cash we'd be staying at Broad Street. People say we've no high profile players. Of course we have. They may not be having the same impact as a Le Roux (for one season) or a Beale (for a handful of games) but Sopoaga, Fekitoa, Shields etc won't be cheap.

The financials are, in my view, a disaster.
Until just before Xmas it was my job to set the price of the Wasps bond (and a whole bunch of others), so while I am not an analyst or accountant, we did keep an eye on the numbers. They look awful to me. I dare say the club thinks it has a plan but after they breached the covenants and tried to remedy the situation by pretending that an injection from DR counted towards profit I donít have much faith. The stadium, far from being an asset, seems to be a drain on profitability.

Re: How is this for a scenario?
Penn Wasp 15 February, 2020 23:50
Coddy, would be interested to know the bits you do not agree with.
and well spotted on JU - FH

Re: How is this for a scenario?
bigfecker 16 February, 2020 00:05
If you are not worried about the financial situation now, when will you be? The payoff for Dai is small beans on top of the losses.

The stadium is too big, we have invested very unwisely in players on the whole.

Re: How is this for a scenario?
Penn Wasp 16 February, 2020 00:59
Not wanting to put this back on Dai, but he lost the playing soul of the club And with it our attractive play and winning ways.
And last year with our disastrous form, we were still up to the salary limit I believe.

So no points from me on getting a squad that cannot attack, defend and entertain - nor win.
And to financially mis manage the opportunity off the field as well.

I still support the guys, but where will additional, new supporters come from, which is what we need to have a chance of being a viable. Business going forward.
To me, anyone not seeing the dire financial situation is one thing.
The thing that I don't see, is a plan from the board to turn it around.

So, we need an investor....
But happy to be proven wrong

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