Moving a sports team to an entirely new region is something rarely seen in the UK, where locations frequently determine loyalties and roots run deep. When Wasps Rugby, faced with financial struggles, undertook a bold relocation from London to Coventry in late 2014, protecting the club’s long-term sustainability was the central consideration for group chief executive David Armstrong.
By Mike Kennedy
In 1995, rugby union was first declared an ‘open’ sport, a move which gave the game sanctioning by an official board, the International Rugby Union (IRB) – now World Rugby – and saw established amateur clubs and players make their first leap into the professional era. Wasps, as they were then known, would soon split into two parts to separate the amateur from the professional side, with the latter becoming part of Loftus Road Holdings PLC. The divide saw the professional arm, later renamed London Wasps to differentiate from the amateur side, move from their Sudbury home to take up residence at Loftus Road, the home of soccer team Queens Park Rangers.
As a professional outfit Wasps have been one of the most successful rugby union clubs in England, with five domestic titles, three Anglo-Welsh Cup titles, two European Cup titles, and a European Challenge Cup title.
In the seven years since Wasps last claimed the Premiership title in 2008, though, the lack of a permanent home has taken its toll. After they relocated to Adams Park, the home of Wycombe Wanderers FC, in 2002, their inability to eke out a profit from the rental agreement led to financial struggles off the pitch, peaking in 2012 with the club on the brink of entering administration.
“Essentially, where we were renting a home at High Wycombe, with a modest supporter base in terms of the people coming to the ground each week; we were in a position where we were struggling to make money; in fact it’s well documented we were losing UK£3 million each year,” says David Armstrong, Wasps group chief executive, speaking to SportsPro in April about the financial troubles the club faced when he joined, initially on temporary basis, in 2014.
“The primary driver [behind the club’s need to relocate] was how to protect the long-term viability and sustainability of the club in financial terms. And before my arrival, with Derek Richardson on board, and even before Derek, with the previous owner, Steve Hayes, the club had been looking for a new permanent home in the south east and had explored options in several different places,” he adds.
Armstrong is discussing the intricacies of the club’s 80-mile move, from the outskirts of north-west London to Coventry, in the West Midlands, from his office in the Wasps FC training ground in west London, which the professional team still share with the amateur side.
For Armstrong, who was appointed as chief executive on a permanent basis in March after playing a major role in the acquisition of the club’s new 33,000-capacity Ricoh Arena in late 2014, the move made sound financial sense.
“The opportunity came up to look at the Ricoh Arena,” he says, “and in every sense it ticks the box as being the perfect location: it’s the right configuration and size of stadium – a fantastic stadium. It has all the ancillary income streams and multi-purpose aspects attached to it. It’s purpose built, it’s ready to go, it’s already a profitable business, and it’s for sale. Now, that’s a great combination and a great place to be in.”
With Wasps’ ownership convinced that remaining a tenant at Adams Park was not a sustainable option, and with aspirations to re-establish the club at the top-end of the professional game in Europe, the opportunity presented by a move to Coventry seemed too good to turn down, despite the many obvious barriers posed by relocating a sports team with a loyal local fanbase.
The first step in gearing up for relocation was to tweak the club’s name. Thus, ahead of the 2014/15 season, ‘London’ was dropped and the team became Wasps Rugby, a move which had the backing of Premiership Rugby, which oversees the domestic league.
“Premiership Rugby has been incredibly supportive,” Armstrong (right) reveals. “Essentially it’s in their interest [to have] strong clubs in our performing world – strong financially and everything else – so they have been very helpful and supportive and encouraging along the way. So we changed the name from London Wasps back to Wasps, and various other things that we needed to do, like get approval for the move and everything else.”
With 80 per cent of fans within a 30-minute drive from High Wycombe, Armstrong argues the name change actually allowed for a more accurate representation of the team’s supporters.
“Actually if you looked at the demographics or the location of our fans, there was a greater concentration in the Buckinghamshire, High Wycombe broader area than there was in London,” he argues. “So it’s still a strong base in west-ish London, but we’d become more of a Buckinghamshire club, so we’d sort of gone down that path anyway.”
American sports teams have demonstrated a far greater willingness than their UK counterparts when it comes to relocating to pastures new. In recent years the National Basketball Association (NBA) franchise Seattle SuperSonics moved to Oklahoma and became the Oklahoma City Thunder, while the National Football League (NFL) side San Francisco 49ers recently built their new home, Levi’s Stadium, in Santa Clara, 40 miles from San Francisco, to name but two.
Armstrong is keen to draw a distinction, though, between a traditional sports club like Wasps and the move they made with those more commonly undertaken by franchises in North America.
“A franchise and a club are different things,” he says. “So a franchise, which will in fact often rename when they move, is a lot more about the owner and the team and that sort of thing. A rugby club is as much about its tradition and its history and its fans. Therefore we shy away a little bit from the idea of being called a ‘franchise’. I don’t think we are one. We are a club. And that club includes the members, the supporters, everyone associated with it, everyone who works with it.”
Appeasing those fans unhappy at the move was a delicate tightrope the club had to walk, but Armstrong is adamant that more and more of the loyal supporters have bought in to the move, even if they must now endure a lengthier journey in order to see their team play. “As soon as we made the decision to move we started to communicate with the fans,” says Armstrong, “and initially some of the reactions were disappointed; fans wanted their club to stay where it was. You can understand that. So we undertook a long engagement process with them, explaining to them the rationale, the long-term financial viability of the club, ensuring that the club is around for another 150 years, having been through a difficult patch financially and continuing to lose money. I think we got an enormous buy-in from our fans to that message. And the level of support, therefore, we got from them as we moved was even better than we expected.”
Armstrong believes that Wasps’ move has taken them into a new era of stability, allowing them to compete once again at the pinnacle of British rugby.
The first match Wasps hosted at the Ricoh Arena, against London Irish, drew more than 28,000 fans, a number of whom were from Coventry and the surrounding area. While perks were offered to existing season ticket holders to encourage them to make the trip, such as free parking and lounge access at the Ricoh Arena, the club were conscious of the need to reach out to the new potential audience in Coventry and create a good impression with that new audience.
“We’d set ourselves a pretty stretching target for that first game,” says Armstrong. “We always expected that perhaps there would be that sort of initial interest, that ‘what’s this all about’ in the move and everything else. Perhaps we didn’t expect to get as many as 28,000. But almost more than the number for me was actually just the atmosphere on the day. And that was hugely driven by the positivity and the excitement generated by the move. There were of course lots of our supporters from High Wycombe as well, but the larger share of people in the ground were from the local area.”
For Armstrong, striking up a rapport and opening a broad communication with the fans in the West Midlands has been a critical factor in the move. He points to activities including coaching clinics and an open training session for 700 local school children to watch the team train, among their efforts to engage with the local community.
“All of a sudden, Coventry is on the map in terms of rugby again. So that relationship will continue to be strong going forward.”
“In the first month we were there we sold almost 1,500 half-season tickets, which is a special package we put on for those fans in the Coventry area,” he says. “So we were very pleased with that initial reaction. We’re trying hard to build those relationships from scratch, and it’s been very successful. It’s a never-ending journey, though. That’s a constant process of broadening and strengthening relationships.”
A potential hurdle to the club’s plans was the possible negative reaction from rival sports teams already occupying Wasps’ new intended catchment pool, particularly the long-standing Coventry RFC. “We don’t seem to have had a negative impact on their performance, both on the pitch, and actually, their attendance numbers are up significantly since we moved to the area, so I hope that’s a little bit to do with the awareness of rugby that we’re now bringing,” replies Armstrong.
“All of a sudden, Coventry is on the map in terms of rugby again. So that relationship will continue to be strong going forward,” adds Armstrong, who says the clubs are already looking at how to work closely together going forward.
Despite a large number of Wasps’ internal staff, including the majority of the sales and marketing team, having now been installed in offices within the bowels of the vast Ricoh Arena – which comes complete with a casino, hotel, extensive hospitality facilities and a 6,000-square metre exhibition hall – the team will continue to train at Twyford Avenue, in west London, for at least another year.
This delay in moving to a new training base not only allows the club to seek out the best possible site in the West Midlands for what Armstrong hopes will become “one of the leading rugby training facilities anywhere in the UK”, but also gives players who are settled in the London area the time to evaluate and relocate their families should they wish.
“Because we are not saying ‘move now’ to the players, it is easier like that,” suggests Armstrong. “We’ve also seen, on the back of the move, for example, [England international lock] Joe Launchbury making the decision to resign with us and extend his contract and that’s a very, very positive sign.”
The first match Wasps hosted at the Ricoh Arena, against London Irish, drew more than 28,000 fans.
Following the move, Wasps launched a retail bond scheme in late April – the first of its kind for a UK sports team – which gave prospective buyers the opportunity to purchase a 6.5 per cent seven-year bond in the club. Launched in late April, the maximum target of UK£35 million in funds was secured in less than a week; money which assisted the club in paying off the UK£13.4million loan from Coventry City Council to acquire the Ricoh Arena.
The remaining funds generated from the scheme will be used to reinvest in the playing squad, with the hope of attracting top-class players to challenge the very best in the business. The announcement that the great Australia international George Smith would join Wasps as a marquee signing just a matter of weeks after the UK£35 million was raised from the bond scheme is perhaps a sign of things to come.
On the back of the scheme’s swift success, Armstrong revealed Wasps are now on course to overtake French giants Toulon, who have won the last three consecutive European cups, in its annual revenue, making them the richest professional rugby club in the world. Some turnaround in just a couple of years.
Access to the stadium is set to vastly improve thanks to the new Coventry Arena railway station being installed at the ground, and at the beginning of July, in a clear show of commitment to their new home, Wasps announced a 15-year extension to the existing partnership between Compass Group UK & Ireland and Arena Coventry Ltd (ACL), the club’s subsidiary company, which runs the Ricoh Arena. Wasps estimate the deal, which covers the provision of matchday catering services at the Ricoh Arena, could be worth as much as UK£195 million over the course of the contract.
At the time of the announcement, Armstrong said: “The increased length and investment of this new contract refl ects the upward curve Wasps and ACL have followed since Wasps acquired the Ricoh Arena and aligned the brands. It also indicates a firm belief in what we can achieve off the field at our new home, through the powerful combination of sport, business and entertainment.”
With a turbulent season over and the club now gearing up for their first full campaign playing in Coventry, ambitious goals are being set for the years ahead. A new kit supply deal with US sportswear giant Under Armour and a host of big-name signings, including New Zealand’s Frank Halai and the aforementioned Smith, should see a new-look side challenging for honours on the field, while off-the-field aims centre around making the most of the multi-use facility Wasps can now call their own.
“We want to grow our occupancy of each of our holds and events and exhibitions, we want to improve the quality of the customer experience – whether that’s somebody coming to a match or an event or exhibition – the hotel, the casino, we want to continue to grow each revenue stream further and further and then see where we take the business after that,” says Armstrong. “I think it’s one of continuous improvements, generating further profitability to reinvest back into the rugby club.”
This article featured in the August 2015 edition of SportsPro magazine. Subscribe today here.
Mike Kennedy
Moving a sports team to an entirely new region is something rarely seen in the UK, where locations frequently determine loyalties and roots run deep. When Wasps Rugby, faced with financial struggles, undertook a bold relocation from London to Coventry in late 2014, protecting the club’s long-term sustainability was the central consideration for group chief executive David Armstrong.
By Mike Kennedy
In 1995, rugby union was first declared an ‘open’ sport, a move which gave the game sanctioning by an official board, the International Rugby Union (IRB) – now World Rugby – and saw established amateur clubs and players make their first leap into the professional era. Wasps, as they were then known, would soon split into two parts to separate the amateur from the professional side, with the latter becoming part of Loftus Road Holdings PLC. The divide saw the professional arm, later renamed London Wasps to differentiate from the amateur side, move from their Sudbury home to take up residence at Loftus Road, the home of soccer team Queens Park Rangers.
As a professional outfit Wasps have been one of the most successful rugby union clubs in England, with five domestic titles, three Anglo-Welsh Cup titles, two European Cup titles, and a European Challenge Cup title.
In the seven years since Wasps last claimed the Premiership title in 2008, though, the lack of a permanent home has taken its toll. After they relocated to Adams Park, the home of Wycombe Wanderers FC, in 2002, their inability to eke out a profit from the rental agreement led to financial struggles off the pitch, peaking in 2012 with the club on the brink of entering administration.
“Essentially, where we were renting a home at High Wycombe, with a modest supporter base in terms of the people coming to the ground each week; we were in a position where we were struggling to make money; in fact it’s well documented we were losing UK£3 million each year,” says David Armstrong, Wasps group chief executive, speaking to SportsPro in April about the financial troubles the club faced when he joined, initially on temporary basis, in 2014.
“The primary driver [behind the club’s need to relocate] was how to protect the long-term viability and sustainability of the club in financial terms. And before my arrival, with Derek Richardson on board, and even before Derek, with the previous owner, Steve Hayes, the club had been looking for a new permanent home in the south east and had explored options in several different places,” he adds.
Armstrong is discussing the intricacies of the club’s 80-mile move, from the outskirts of north-west London to Coventry, in the West Midlands, from his office in the Wasps FC training ground in west London, which the professional team still share with the amateur side.
For Armstrong, who was appointed as chief executive on a permanent basis in March after playing a major role in the acquisition of the club’s new 33,000-capacity Ricoh Arena in late 2014, the move made sound financial sense.
“The opportunity came up to look at the Ricoh Arena,” he says, “and in every sense it ticks the box as being the perfect location: it’s the right configuration and size of stadium – a fantastic stadium. It has all the ancillary income streams and multi-purpose aspects attached to it. It’s purpose built, it’s ready to go, it’s already a profitable business, and it’s for sale. Now, that’s a great combination and a great place to be in.”
With Wasps’ ownership convinced that remaining a tenant at Adams Park was not a sustainable option, and with aspirations to re-establish the club at the top-end of the professional game in Europe, the opportunity presented by a move to Coventry seemed too good to turn down, despite the many obvious barriers posed by relocating a sports team with a loyal local fanbase.
The first step in gearing up for relocation was to tweak the club’s name. Thus, ahead of the 2014/15 season, ‘London’ was dropped and the team became Wasps Rugby, a move which had the backing of Premiership Rugby, which oversees the domestic league.
“Premiership Rugby has been incredibly supportive,” Armstrong reveals. “Essentially it’s in their interest [to have] strong clubs in our performing world – strong financially and everything else – so they have been very helpful and supportive and encouraging along the way. So we changed the name from London Wasps back to Wasps, and various other things that we needed to do, like get approval for the move and everything else.”
With 80 per cent of fans within a 30-minute drive from High Wycombe, Armstrong argues the name change actually allowed for a more accurate representation of the team’s supporters.
“Actually if you looked at the demographics or the location of our fans, there was a greater concentration in the Buckinghamshire, High Wycombe broader area than there was in London,” he argues. “So it’s still a strong base in west-ish London, but we’d become more of a Buckinghamshire club, so we’d sort of gone down that path anyway.”
American sports teams have demonstrated a far greater willingness than their UK counterparts when it comes to relocating to pastures new. In recent years the National Basketball Association (NBA) franchise Seattle SuperSonics moved to Oklahoma and became the Oklahoma City Thunder, while the National Football League (NFL) side San Francisco 49ers recently built their new home, Levi’s Stadium, in Santa Clara, 40 miles from San Francisco, to name but two.
Armstrong is keen to draw a distinction, though, between a traditional sports club like Wasps and the move they made with those more commonly undertaken by franchises in North America.
“A franchise and a club are different things,” he says. “So a franchise, which will in fact often rename when they move, is a lot more about the owner and the team and that sort of thing. A rugby club is as much about its tradition and its history and its fans. Therefore we shy away a little bit from the idea of being called a ‘franchise’. I don’t think we are one. We are a club. And that club includes the members, the supporters, everyone associated with it, everyone who works with it.”
Appeasing those fans unhappy at the move was a delicate tightrope the club had to walk, but Armstrong is adamant that more and more of the loyal supporters have bought in to the move, even if they must now endure a lengthier journey in order to see their team play. “As soon as we made the decision to move we started to communicate with the fans,” says Armstrong, “and initially some of the reactions were disappointed; fans wanted their club to stay where it was. You can understand that. So we undertook a long engagement process with them, explaining to them the rationale, the long-term financial viability of the club, ensuring that the club is around for another 150 years, having been through a difficult patch financially and continuing to lose money. I think we got an enormous buy-in from our fans to that message. And the level of support, therefore, we got from them as we moved was even better than we expected.”
The first match Wasps hosted at the Ricoh Arena, against London Irish, drew more than 28,000 fans, a number of whom were from Coventry and the surrounding area. While perks were offered to existing season ticket holders to encourage them to make the trip, such as free parking and lounge access at the Ricoh Arena, the club were conscious of the need to reach out to the new potential audience in Coventry and create a good impression with that new audience.
“We’d set ourselves a pretty stretching target for that first game,” says Armstrong. “We always expected that perhaps there would be that sort of initial interest, that ‘what’s this all about’ in the move and everything else. Perhaps we didn’t expect to get as many as 28,000. But almost more than the number for me was actually just the atmosphere on the day. And that was hugely driven by the positivity and the excitement generated by the move. There were of course lots of our supporters from High Wycombe as well, but the larger share of people in the ground were from the local area.”
For Armstrong, striking up a rapport and opening a broad communication with the fans in the West Midlands has been a critical factor in the move. He points to activities including coaching clinics and an open training session for 700 local school children to watch the team train, among their efforts to engage with the local community.
“In the first month we were there we sold almost 1,500 half-season tickets, which is a special package we put on for those fans in the Coventry area,” he says. “So we were very pleased with that initial reaction. We’re trying hard to build those relationships from scratch, and it’s been very successful. It’s a never-ending journey, though. That’s a constant process of broadening and strengthening relationships.”
A potential hurdle to the club’s plans was the possible negative reaction from rival sports teams already occupying Wasps’ new intended catchment pool, particularly the long-standing Coventry RFC. “We don’t seem to have had a negative impact on their performance, both on the pitch, and actually, their attendance numbers are up significantly since we moved to the area, so I hope that’s a little bit to do with the awareness of rugby that we’re now bringing,” replies Armstrong.
“All of a sudden, Coventry is on the map in terms of rugby again. So that relationship will continue to be strong going forward,” adds Armstrong, who says the clubs are already looking at how to work closely together going forward.
Despite a large number of Wasps’ internal staff, including the majority of the sales and marketing team, having now been installed in offices within the bowels of the vast Ricoh Arena – which comes complete with a casino, hotel, extensive hospitality facilities and a 6,000-squaremetre exhibition hall – the team will continue to train at Twyford Avenue, in west London, for at least another year.
This delay in moving to a new training base not only allows the club to seek out the best possible site in the West Midlands for what Armstrong hopes will become “one of the leading rugby training facilities anywhere in the UK”, but also gives players who are settled in the London area the time to evaluate and relocate their families should they wish.
“Because we are not saying ‘move now’ to the players, it is easier like that,” suggests Armstrong. “We’ve also seen, on the back of the move, for example, [England international lock] Joe Launchbury making the decision to resign with us and extend his contract and that’s a very, very positive sign.”
Following the move, Wasps launched a retail bond scheme in late April – the first of its kind for a UK sports team – which gave prospective buyers the opportunity to purchase a 6.5 per cent seven-year bond in the club. Launched in late April, the maximum target of UK£35 million in funds was secured in less than a week; money which assisted the club in paying off the UK£13.4million loan from Coventry City Council to acquire the Ricoh Arena.
The remaining funds generated from the scheme will be used to reinvest in the playing squad, with the hope of attracting top-class players to challenge the very best in the business. The announcement that the great Australia international George Smith would join Wasps as a marquee signing just a matter of weeks after the UK£35 million was raised from the bond scheme is perhaps a sign of things to come.
On the back of the scheme’s swift success, Armstrong revealed Wasps are now on course to overtake French giants Toulon, who have won the last three consecutive European cups, in its annual revenue, making them the richest professional rugby club in the world. Some turnaround in just a couple of years.
Access to the stadium is set to vastly improve thanks to the new Coventry Arena railway station being installed at the ground, and at the beginning of July, in a clear show of commitment to their new home, Wasps announced a 15-year extension to the existing partnership between Compass Group UK & Ireland and Arena Coventry Ltd (ACL), the club’s subsidiary company, which runs the Ricoh Arena. Wasps estimate the deal, which covers the provision of matchday catering services at the Ricoh Arena, could be worth as much as UK£195 million over the course of the contract.
At the time of the announcement, Armstrong said: “The increased length and investment of this new contract refl ects the upward curve Wasps and ACL have followed since Wasps acquired the Ricoh Arena and aligned the brands. It also indicates a firm belief in what we can achieve off the field at our new home, through the powerful combination of sport, business and entertainment.”
With a turbulent season over and the club now gearing up for their first full campaign playing in Coventry, ambitious goals are being set for the years ahead. A new kit supply deal with US sportswear giant Under Armour and a host of big-name signings, including New Zealand’s Frank Halai and the aforementioned Smith, should see a new-look side challenging for honours on the field, while off-the-field aims centre around making the most of the multi-use facility Wasps can now call their own.
“We want to grow our occupancy of each of our holds and events and exhibitions, we want to improve the quality of the customer experience – whether that’s somebody coming to a match or an event or exhibition – the hotel, the casino, we want to continue to grow each revenue stream further and further and then see where we take the business after that,” says Armstrong. “I think it’s one of continuous improvements, generating further profitability to reinvest back into the rugby club.”
This article featured in the August 2015 edition of SportsPro magazine. Subscribe today at www.sportspromedia.com/shop.
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