On the ball for expansion
PUBLISHED: 11:00 24 October 2013
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"Rewind the clock back 13 years or so - I stood at a members' meeting and said, 'Do you want to go on and try to get into the Premiership?' And that became our aim."
Tony Rowe, chief executive at Exeter Chiefs, knows the journey has been a long one.
“That eventually meant moving from the old ground and so we set off on this road, and look where we are. Part of that, if you want to play any professional sport these days, is about the money.”
The last decade-and-a-half has witnessed the incredible upward curve of a club rarely seen in the modern professional era of sport, one dominated as it is by established brands built on solid foundations of sizeable fanbases stretching back generations.
The Chiefs are different - just how different, you realise, when Tony Rowe explains what comes next.
“If you want to survive at the top of Rugby Union it’s going to cost money. Premiership Rugby generates money but it’s not enough, you have to generate an income.”
“We have to be a business that adapts for rugby matches 20 times a year. You have got to move the business on. We need to increase the size of the facilities, to go from a small conference and banqueting facility - a very good one - to a medium sized one, the best in the region. We need to expand the ground. The fans are magnificent and the appetite for top-flight rugby is tremendous. The potential is there.”
As with the move to Sandy Park, financing the next chapter of the Chief’s story sees the club venture into new territory once more. “It’s the members’ club and we have had to find ways of doing things acceptable to the members and holding on to the crown jewels – the club itself,” explains Rowe. “We’ve done that. But to survive you have to thrive, and that needs capital and the bonds issue is a way of raising the money.”
The bonds issue. Strictly governed under financial law, the Chief’s CEO has to be careful with his words. “I would like to think people outside of our membership and season ticket holders who want to share in our success will take an interest.”
The £7.5m Exeter Chiefs 2020 Bond issue is an investment opportunity designed to fund the first phase of the club’s ambitious redevelopment plans.
It would see expansion of the Sandy Park Conference Centre to a 1,000+ delegate facility, the extension of the West Grandstand and increased car parking facilities at the ground.
An initial seven-year term investment opportunity, paying a fixed 7% gross annual return, reports suggest early interest in the scheme has been high. Tony Rowe’s £1.98m club loan will convert to bonds and Exeter Rugby Group Limited become a public limited company - Exeter Rugby Group PLC.
It appears a good return, certainly when stacked against the rate offered by high street banks’ savings accounts, though of course sport always comes with risk, namely relegation. The club says rigorous financial planning includes contingency for the possibility of relegation.
As to the plans themselves, Tony Rowe is adamant that they are essential to the long-term success of the club.
“It’s not investing in the players but the redesign of the stadium and the business facilities. But of course that enables the club to continue to do everything it can to get it right on the pitch.”
He cites the European club competition and the challenge of competing with the top sides from France.
“It’s very competitive. The reality is if we look at who the pundits say will finish in the top four in the Aviva Premiership this season, it’s the clubs who’ve been their consistently in recent years – Leicester, Saracens, Northampton, Harlequins.
“We want European rugby. We want to stay in the top six, but so do Gloucester, and Bath want to get back in there as quickly as possible.
“Our ambition is to consolidate and grow stronger year on year. The Aviva Premiership is our main aim. If you are in the top six regularly enough, then you are eventually going to get into that top four.”
And more immediately, as the fans eagerly await this year’s European adventure?
“Last year the Heineken Cup was a massive challenge – Leicester and Clermont, both incredibly tough teams. This year we stand a chance. They’re tough games – Toulon, Gloucester and Cardiff, but it’s in our hands.
“I think there is a real chance we can get through the group stage for the first time in the club’s history – that would be something special.” n