All posts by Carlos

toxic

Another Quiz

So we have established that you have gone off and told your potential large customer that they are ruining your industry.

A few months later you become aware that they are about to invest a large sum of money into a consortium of your suppliers. This will enable your suppliers to keep some of their assets, which you get to use on a regular basis too, to help you generate your income. If they don’t keep these assets, you won’t be able to use them so often, and they will wear out quicker.

How do you react to this?

A)     Phone the consortium members and offer your hearty congratulations; or

B)      Make a point of going to your PR company and publically congratulate the consortium for finding some additional inventory via their website goodmorningboyo.com ; or

C)      Do nothing; or

D)     Telephone the manager of the small local office of the large customer and ask that the large customer doesn’t complete the deal with the consortium of suppliers, and that they should spend the money with you. And then be astonished to be told that the local office won’t even approach their superiors as the local manager knows what the answer will be after your performance at their head office a few months ago.

Obviously, the answer is D).

IMPORTANT LATE EDIT- One active gwlader is running the inaugural Swansea Half Marathon this weekend. As training for the Valencia Marathon later in the year! He is running for Macmillan Cancer Support- a great cause which I know has been of great help to his family in the last few months.

So please donate at http://www.justgiving.com/Paul-Harris48

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Storytime

Once upon a time there was an evil emperor. One day he was shocked to find out that a number of mischief makers had started a rebellion and they had called a meeting of all the subjects that the Emperor ruled over.

In preparation for the meeting with his subjects, the Emperor asked to see the people that worked for him. The ones that made sure that his empire continued to work in the way he wanted it to. The people that he paid to do this. His staff.

Five days before the big meeting with his subjects, he informed his staff that he wanted to meet with them two days before the big meeting so that they could rehearse what he was going to tell his subjects. However, they refused to have this preparation meeting, which then had to be called off.

Any link between this tale and recent real life events is entirely coincidental.

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EGMre we go again

This is an email today sent to all WRU member clubs.

To WRU Member Clubs
 
Dear Secretaries,
 
I write to you, with ever increasing sadness and despair, regarding the league restructure that is being imposed on us by the WRU Board and its Chief Executive, against the wishes of a large number of our fellow clubs.
 
From talking with many of you, I know that you feel aggrieved, not just at the outcome of the restructure, but also at the process that led to it, including the embarrassing way that the Chairman & Chief Executive handled the situation at the EGM, and the farcical postal ballot that ensued.
 
Despite many promises, the WRU have never engaged in a proper consultation exercise with us regarding the league restructure. As usual, we have been treated with contempt by those who think they know better – the same people who needed a 3-month review in order to understand Welsh Rugby.
 
I have taken legal advice and am confident a prohibitive injunction can be quickly obtained in order to stop these ill-conceived changes from being implemented.
 
I am seeking your support to apply for the injunction and also to call an EGM.
 
At that EGM, I propose that we should properly debate the league restructure and the Board’s related conduct, plus hold a Vote of No Confidence in The Chief Executive, who ultimately must bear responsibility for not just this situation, but also the many others that have led to our Union being held in such “low esteem” across World Rugby
 
We pay this man almost £6,500 a week yet, as Gerald Davies stated so powerfully at the June EGM, “our reputation is tarnished and it’s not a good image. We are not held in high regard, we are held in low esteem. It is disappointing and distressing we have such a reputation. 
 
“We need desperately to restore our dignity and reputation. We need a strong identity, we need cohesion, collaboration and cooperation. We need to restore Welsh rugby and not through self-interest. We can’t carry on with having more of the same.
 
I acknowledge that I will not gain the support of all clubs, but I ask that you read and carefully consider the content of this letter before you and your fellow Officers make a decision, as the restructure in its current guise will affect the majority of clubs for many years to come and will cause untold damage as a whole to rugby in Wales.
 
Please don’t hide behind the relative comfort that comes from currently being in a higher division, as things change rapidly in rugby!
 
This is the last chance for us to put a stop to this rushed restructure.
 
Lack of consultation
 
Despite Mr Lewis’ assertion at the June EGM that he presides over a listening Union, he is still not hearing. I have personally written to Mr Lewis on several occasions asking who was consulted about the restructure amongst our member clubs and when, and why he continues to avoid further consultation. As usual, I have yet to receive a suitable response.
 
In Mr Lewis’ latest letter he asserts that the restructure will go ahead, but will be further reviewed in a year’s time by yet another Working Party. It is interesting to note what he didn’t mention: consultation. Why won’t Mr Lewis and the people on the Working Party (that he has chosen) talk to us, the clubs, the people most affected by these changes?
 
Why did it take the Chief Executive almost 6 months to discover the depth of ill feeling towards the restructure following its announcement last August? Many clubs have informed me that they have challenged the restructure at District Meetings, and have written letters, emailed and called the WRU directly but did not receive a response.
 
Mr Lewis cites the recent ballot as justification to proceed with the restructure, but that is a fundamentally flawed argument on several fronts.
 
The ballot
 
It is worth stating that we should never have been put in the situation that a ballot was required to ratify a league restructure. The way that the decision to call a ballot was reached at the EGM was manipulative and disgraceful. The unedifying sight of our Chairman, President and Chief Executive first disagreeing over due process, then making up solutions on the hoof to placate the anger that was growing at the EGM, was quite frankly embarrassing and “below the dignity required of a National Governing Body”, to use Mr Lewis’s own oft-quoted words.
 
I have major concerns about the ballot itself, and the disingenuous way the results were presented.
 
The WRU issued ballot papers without explaining:

  • What the “geography and meritocracy” criteria that will be applied prior to the 2015/16 season are and what effect they could have on the outcome of hard-fought promotion and relegation
  • Why some clubs have been offered a general opt-out to promotion and relegation
  • On what basis changes to the initial proposals were made such that several clubs were moved out of West Divisions to East Divisions, creating imbalances such that some clubs will play fewer games, but have the same chance of promotion as those playing a fuller fixture list.

335 members were sent ballot papers (including Member Clubs & Associates, plus District Members). I have been informed by a number of clubs that they did not receive their ballot papers, and they will have been included in the 95 that the WRU says did not respond.
 
Of those that did respond, 137 clubs were in favour of the league restructure, which is not even a majority (it is 41% of those balloted). More significant is that 88 clubs explicitly voted against the proposals, or the equivalent of 7 of the proposed new leagues!
 
So, we now have a situation where 59% of those balloted have either said no or not said anything at all, yet the Chief Executive still pushes ahead.
 
How can he possibly justify making such fundamental changes when less than half of our clubs agree? Surely, somewhere in the constitution of the WRU, a minimum of at least 50% of any full vote is required before change can be implemented?
 
Two weeks ago, I emailed The Chief Executive and asked him to forward a copy of the relevant part of the WRU constitution that is related to ballots. I wanted to establish what the correct procedure is and whether in this instance it has been followed.
 
The Chief Executive has not even had the decency to acknowledge my enquiry.
 
The mechanics & consequences of the restructure
 
32 clubs in North Wales appear to have been given their own league structure, with a relatively straightforward ‘2 up 2 down’ system of promotion and relegation. The winner of Division 1 North cannot be promoted into the Championship, however.
 
Of the remaining 269 league clubs, just 19 clubs (7%) will be promoted in any one season, 19 clubs (7%) will be relegated, and the vast majority, 231 clubs (86%) will be left without ambition or aspiration.
 
This will take the heart, pride, and passion out of Welsh Rugby and will have a catastrophic effect on every facet of the game in Wales.
 
At the half-way point in a season, the vast majority of clubs will have nothing to play for, and the retention, excitement, ambition of players will be lost. We all know how hard it is to motivate amateur players at the best of times. These leagues will make this virtually impossible.
 
It’s not just those clubs destined to be forever mid-table or lower that will have such problems. A club could win their particular league year on year and never get promoted due to the ridiculous play-off process that also allows an arbitrary one in three of the clubs TWO chances to get promoted.
 
The new Division Three will hold a massive 147 clubs across the 13 different-sub divisions. Only the 13 winners of a sub-division can progress into a promotion play-off; the runners up get nothing.
 
So, out of those 147 Division 3 clubs, just EIGHT can be promoted in any one season, and there is NO relegation.
 
A Division 3 club that has a bad start to the season, and finds itself at the lower end of the division after Christmas, will inevitably struggle to field a side on a Saturday, That club may not worry too much as they cannot be relegated, but what of the other clubs in that Division? If the fixture list isn’t completed, most clubs will have the points for the early season wins deducted. Final positions in the division will then change causing confusion and discord at the end of the season.
 
Division 2 clubs will do everything within their power to avoid being one of the 8 relegated to Division 3. The best players in Division 3 will be headhunted by those Division 2 clubs who are fighting to stay up. Money will undoubtedly change hands.
 
This will probably also be mirrored in Division 1 as the fear of being one of the 8 relegated to Division 2 bites. We are all too aware of clubs that have previously gone into free-fall from higher divisions and ended up sinking into oblivion. This league restructure makes that scenario even more likely.
 
The hidden agenda
 
I would ask all Secretaries, Chairpersons and officers of clubs to look properly at what is being offered by the WRU in respect of the league restructure. There is no doubt in my mind that that there is a hidden agenda to ‘cull’ the number of clubs, and many of the people I have spoken to agree.
 
Indeed, the vast majority of clubs I have been in contact with me, from North to South, and East to West, have grave concerns about this restructure.
 
Many refer to that ‘hidden agenda’ and the secrecy surrounding the so-called working party, and the lack of information and due process, which caused June’s EGM in the first place.

The Board and the Chief Executive should have delayed these changes until a full, inclusive, professional and proper consultation process was undertaken.

Why would they not do this?

Mr Lewis counters our legitimate concerns by pledging to monitor and then review the situation at the end of the season. If he has enough doubts to suggest that a review will be required, why are we still going ahead? It is just sheer bloody-mindedness, and typical of a man who does not like to admit his mistakes.
 
He would do well to remember that it isn’t the regions or the supporters club that sell the majority of international tickets, it is the clubs whose numbers he is trying to reduce.
 
It is the clubs that nurture the grassroots of our game by raising the spirit of amateur players, supporting and financing youth rugby, schools rugby, and mini/junior rugby.  Without our clubs, parents will have nowhere to bring their children to introduce them to our great game.
 
The stark reality of a bleak future under the new league system
 
Clubs will fail if the restructure kills the ambitions of the majority. Even now, keeping our clubs viable is very challenging within the current economic climate; these changes will make it even more difficult. Already, one third of our clubs suffer year on year financial losses and 128 clubs are in long-term debt; the WRUs own press releases have confirmed that. Sponsors are already realising that there is dwindling support for the game in Wales and therefore will not spend money where they see no potential for return.
 
It is with deep regret that I have had to write this letter, but I hope you and your club officers will respond by return and confirm that you will support me in stopping these league changes before it is too late.
 
Yours sincerely
 
John Manders

We understand that Mr Manders is confident of getting the required number of clubs.

rogercar

Quiz for you

Quiz

You are in charge of an organisation with a bank debt of £25m. You have a potential customer who may be willing to invest £25m into your business in exchange for having their name put on the outside of your factory. They are a new entrant into the market place and are also willing to spend more than their close competitors with you and your suppliers, in order so that you choose them to showcase your products to the wider world. With this additional money your suppliers can keep hold of their key staff, which means you can use them too, to generate extra income for yourself.

Which of the following courses of action do you take:

A)     Say thank you very much; or

B)      Say thank you very much and send the new customer a box of fine wines; or

C)      Jump on the train for two hours, turn up at the customer’s office and take him out for a long lunch; or

D)     Jump on the train for two hours, turn up at the customer’s office and proceed to lecture him for 20 minutes on how he is destroying your industry.

If your answer is not D) you have failed the quiz.

rebeccariots

Will Thomas- Ex WRU

A few weeks ago, Will Thomas was announced as the Chief Executive of Neath RFC. This was a surprise for a number of reasons.

Firstly, Neath RFC isn’t an especially large business. Whether it needs a full time chief executive officer is open to some question. A general manager, perhaps, but Chief Executive is a grand title.

Secondly, Will Thomas was a former Wales 7’s player, who has some professional business qualifications. His previous role was within the WRU as ostensibly running the Principality Premiership. The competition that Neath play in. It is strange that he leaves a stable job, in a seemingly stable business (as we are constantly told) to take a job at Neath RFC. With the best will in the world (no pun intended), Neath RFC has not been the stablest of environments recently. The chairman’s business went into administration a few years ago, the local council has attempted to get a winding up order, and the chairman has recently been arrested for fraud. (I should emphasise that these are facts. They are also facts that the chairman has started another business, many winding up orders get settled, and arrest does not equate to guilt).

So, why would a professionally qualified ‘rugby’ man, leave the Welsh Rugby Union, for another job, which although has a grander title, is unlikely to pay a salary significantly more than the Union were paying him? Oh and at that other job, stability is far from guaranteed.

Now it is possible that he wanted a challenge, and was given certain guarantees by the Neath chairman, that satisfied him with regard to some of the issues outlined above.

Is it not though possible that the WRU is such a miserable place to work, that Mr Thomas was desperate to leave? And that staff morale is rock bottom, and they are fed up working there?

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Irish Player Costs- An analysis

Gerry Thornley, 29 April 2014 “That there is likely to be more money for players is overdue and the Irish provinces have a proven culture, sense of identity and loyalty, as well as competitiveness, which their fellow Celts would covet. They’ve defied the odds before.”

On 3 March 2014, Andy Howell, rugby correspondent of the Western Mail, supposedly Wales’ No.1 rugby journalist, claimed that the Leinster Rugby team had a budget of £4.1m, including its academy players. In the quote above, the archetypal Irish rugby journalist, Gerry Thornley, implies that Irish players stay with their provinces due to loyalty, not money. That would be true if Howell’s budget was correct.

But is Howell correct? What did he do to verify the figure given to him, presumably by Leinster.

The first thing is to layout the structure of Irish Rugby at professional level. It is entirely controlled by the Union. The IRFU own the professional teams. Munster, Ulster, Leinster & Connacht Rugby are all entities it seems who are owned 100% by the IRFU. It is those entities that operate the relevant provincial sides. There are limited companies set up that protect those names, but they are dormant. Those businesses appear to be ‘branches’ of the IRFU.

Reason for arriving at those conclusions? The IRFU accounts. These account for the competition monies for those sides, but unlike the WRU, the outgoings do not go to the four teams, but appear to be spent on players wages (of which more later).

Alongside the rugby sides there, provinces also have Branches that are owned, it seems, by their constituent clubs. The accounts of the branches are not made publically available, but are commented on in the press following AGM report. I have also had a copy of the Leinster Branch Accounts sent to me, which help enormously to understand how professional rugby in Ireland works, and crucially how much money they spend on player wages.

In terms of income, the IRFU appear to account for all the competition monies the 4 provinces get. This totals approximately €11m. The other income of the IRFU appears to derive out of the international game only. Then in schedule 3 to the accounts we are told that player and management costs come to €28.5m. This excludes academy players and coaching support staff (such as U20 coach Mike Ruddock) as they appear to be included in the costs laid out in schedule 4.

So the wage bill for pro players in Ireland is €28.5m, less say €1m for the senior side coaching team.

At the moment in Wales, RRW are asking for £10m between the 4 sides. The four Irish provinces, in 2013 (with similar figures for previous years) received approximately €16.5m over and above competition income. This does give the IRFU MORE control than RRW appear to be happy with, but it does indicate the funding difference.

The remainder of the income for the branch accounts that I have seen for Leinster, states that all other income such as provincial income and ticket monies go through the branch accounts. The Leinster turnover, even without competition monies remember, is over €12m. This is in excess of the top welsh pro team, where competition monies are included.

So if the IRFU pay the players, where does this money go? Well, it seems that the Leinster branch also pay the players (senior ones) to the tune of €2.7m. The coaching staff expense is elsewhere in the accounts.

So, if we stay with Leinster at the moment, if we say the split of the €27.5m between the four provinces is that Connacht get half the other 3. That means that Leinster get the wages of 2/7ths of €27.5m. This is approximately €7.85m. Add in the €2.7m, and you get €10.55m. Or £8.75m. Or more than double the RRW salary cap, and significantly more than the PRL clubs.

I even think it is above the French salary cap.

#foodforthought ’ndy

Conclusions:

1- The Irish provincial sides are not overperforming. They are performing on par with their funding. Maybe even below it.

2- Where the Irish are performing is income generation. The Munster branch turnover is apparently more like €17m.

3- RRW demands for £10m do not seem unreasonable.

4- RRW need to improve their income streams. The WRU should be helping them with this, not hindering them. Part of this would be to empower regions to build relationships with clubs. In Ireland, the branches award significant grants as well as the Union.

5- To make it clear, the Lenister playing wage bill is obviously not £4.1m, Andy. According to official audited accounts.