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They might have seen repeated success on the pitch, resulting in a dream Championship title earlier this year... but, behind the scenes, it has been an extremely challenging few years for Jersey Reds, leading to today's shock announcement...
Express looks back...
In November 2016, 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.
That scheme 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 then compounded as Reds stalwart Bill Dempsey, instrumental in their rise through the leagues to the second tier of English rugby, resigned from his position as Director of Professional Rugby.
Pictured: Reds stalwart Bill Dempsey resigned from his position as Director of Professional Rugby in 2016.
The club then announced a wholesale strategic review of finances, undertaken with current Chair Mark Morgan at the helm,
The deal secured Jersey’s position in the 2016/2017 season and also enabled the club the option to buy back the assets within three to five years, but meant they had to rent them in the meantime.
In early 2017, the club published plans to get back on track.
It decided to carry on playing in the Championship, but using an increased number of loan players – ideally, young players who would come to gain experience and ‘game-time’ at the highest level.
Measures were also introduced to reduce risk from the way it operated with strict new financial controls, a commitment to give members quarterly updates, and creating a Governance Board of elected officers.
The club also launched a major fundraising drive, in part through events featuring big names and a significant appeal for donations via standing orders or one-off bequests.
In August of that year, the club reached an extended deal with its headline sponsor, Santander, which saw its St Peter facility renamed the ‘Stade Santander International’ with immediate effect.
Pictured: In August 2017, the Jersey Reds' St Peter facility was renamed the ‘Stade Santander International’.
The bank committed to the Reds until 2021, having signed up for a further two years on top of their initial three-year partnership.
That deal was extended again in 2019, bringing it up until the end of the 2024/2025 season.
In early 2018, the Reds agreed a new loan so they could buy back their clubhouse, pavilion, stands, car park and both rugby pitches.
A new 10-year loan of £1.5 million by a small group of benefactors helped pay the previous loan off, putting the club back in control of the properties and giving them ‘extra time’ to sort out their money woes.
Although the Reds’ financial position remained still very much in the red, the club said at the time that they had a game plan with the sale of other land that the club still owned in St Peter including Field 760.
Pictured: In early 2018, the Reds agreed a new loan so they could buy back their clubhouse.
That same year, the Reds needed a £150,000 Government grant to finish the season amid a £300,000 annual deficit.
Despite this, the players stayed determined and the 2018/19 season saw the Reds end in fourth place, which was the highest-ever finish in their seventh season in the Greene King IPA Championship.
Two years later, the covid pandemic hit, meaning that the club’s main revenue stream – ticket sales – ceased for an extended period.
The 2019/20 season was cut off in February as Jersey sat in sixth place, while the 2020/21 season saw the side finish sixth, having played seven of 10 games away from home due to prevailing travel rules.
That year also brought more bad news, with an unexpected announcement from the Rugby Football Union that it would be slashing their annual funding.
The local team was one of 12 clubs in English rugby’s second tier to learn that annual central funding of £480,000 was to be slashed to £288,000.
Pictured: Chair Mark Morgan (right) slammed the funding decision. (Jersey Reds)
The 40% drop was reportedly based on “missed objectives”, but Reds Chair Mark Morgan said he did “not recall” this ever being raised by the RFU during previous meetings he had attended at Twickenham.
In 2021, Championship clubs received just £80,000 from the national governing body – a massive reduction of £455,000 per club from two years earlier.
Again, the players soldiered on and the 2021/22 season saw the Reds finish at fourth with their biggest ever points haul.
At the beginning of that season, Jersey Reds split from its amateur arm to allow a second island side to enter the English league pyramid in a move that enabled them to seek out more private investment from wealthy backers.
WATCH: Jersey Reds Chairman Mark Morgan speaking about the restructuring plans at the time.
These proposals were supported unanimously.
The year started with Jersey Reds inking a deal with Investec Private Banking. It saw the covered terraces behind the posts at the eastern end of the pitch remain branded as the ‘Investec End' for three years, which was aimed to support the team as they continue their challenge at the top of the second tier of English rugby.
More significantly, the team realised a dream more than a decade in the making: they were crowned RFU Championship winners for the first time.
Pictured: Lewis Wynne with the Championship Trophy during the Reds’ open-top bus parade on Liberation Day.
It was a goal that had seemed near-impossible back in 2015, when the club stood on the brink of relegation – but, with the hard work of the players under the inspired leadership of Harvey Biljon, the Reds worked their way to the top spot.
However, despite this great success, they were unable to be promoted – nor were they able gain any prize other than pride for their Championship triumph – due to stringent RFC rules relating to their stadium.
WATCH: Jersey Reds lifting the Championship Trophy after beating Ampthill.
Mr Morgan told Connect Magazine at the time: “I think that they’ve got a very wrong focus on what they term as minimum standards. Basically, for us, it means having a 10,000 Stadium. Now, what’s the point in making people build these stadia, and go into more debt?
“We’re not in debt, but a lot of the Premiership clubs are in debt, and a lot of that is because they’ve had to spend so much money on stadia.”
While the Reds’ challenges have been known for some time, today’s announcement that it had ceased trading and that liquidation “appears inevitable” has nonetheless come as a shock to many.
Mr Morgan explained that the club had been able to trade over the summer, but had to stop officially last night amid an inability to pay September salaries. He said that talks with potential and existing investors had also failed.
Pictured: The Jersey Reds playing against Ampthill earlier this year.
He claimed that Championship clubs had been “left in the dark” about how a new Professional Game Agreement would be implemented from 2024, which he said led “to a growing fatigue among those who may have invested”.
Reds’ key sponsor, Santander, this morning commented: “We are all deeply saddened to hear the news about Jersey Reds and our thoughts are with the players, coaching staff and management team at this incredibly sad and difficult time.
“Our sponsorship agreement is a matter for ourselves and Jersey Reds, and we don’t wish to give any comment on this morning’s announcement at this moment in time.”
The fate of Jersey Reds appears to follow a pattern observed across the national rugby scene, with the Wasps, London Irish an Worcester Warriors all meeting a similar fate.
Several questions remain unanswered, such as what care will be offered to players and staff members, and how season ticket holders will be compensated.
Jersey Reds regret to confirm that the club ceased trading yesterday. Details: https://t.co/41HRYoPiq9 ???????????? pic.twitter.com/eGwgkCbBsu
— Jersey Reds (@JerseyRedsRugby) September 28, 2023
Some supporters question whether the Government would be willing to step in, as it has done previously – particularly given the likely impact on the wider economy. It's also unclear how much would be needed if Ministers were to offer emergency funding. However, the Assistant Minister with responsibility for sport said today that the Reds had already been given £370,000 within the past three months and that there were other pressures on the public purse preventing more money from being given.
Mr Morgan previously told Connect that the Reds were estimated to generate around £5million a year in direct benefit to the island – in terms of the taxpaying staff they employ, through GST on events and alcohol sold, as well as in tourism through players and visitors travelling to and from the island and enjoying local hospitality.
"And that's before you start thinking about the intangibles, such as the coverage we've had," he added. "Because of the success we've had this last season, the coverage we've had in the national press over the last month has been amazing. It's coverage money can't buy – Visit Jersey could not have a budget big enough to get that kind of exposure.
"There is a huge amount of value brought to the island through ‘sports tourism’. Call it what you will, it's probably under undervalued, I would think."
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