Exclusive: rugby’s sleeping giants may have struck gold but want to keep the salary cap, their new chief excutive
ANYONE in rugby who predicted, during the bleakest moments of Wasps’ flirtation with insolvency in 2012, that the club were set to be transformed into the biggest earners in the European game would have been suspected of suffering from the kind of head injury the sport is currently trying to eradicate.
Yet little more than two years on from their darkest hour, the nomadic outfit are close to attaining that status and, says new chief executive David Armstrong, are finally capable of mirroring that financial resurrection with much-improved performances that add to the club’s two European Cups and six domestic top-flight titles.
The catalyst for their explosive growth has been the controversial move from High Wycombe to Coventry and the purchase of the Ricoh Arena late last year. For £20m, Wasps acquired not just a pitch but a facility also boasting conference and exhibition space, a hotel and casino, which all now help to fund the club. The price already looks a steal.
“Our priorities start with returning the club to its former glories on the pitch, but alongside that the financial growth is very important,” Armstrong, who helped lead the stadium purchase and officially starts work as chief executive today, told City A.M. “We think we are very close to being the largest in Europe now, on an annualised revenue basis. And with some of the growth I think we’ll generate with our new home, I think it’ll be a year or so, maybe two years, before we’re the largest club in Europe.”
Armstrong, who worked with predecessor and new deputy chairman Nick Eastwood on rugby hospitality firm Twickenham Experience, believes the stadium’s ancillary businesses are ripe for growth. By stimulating that and attracting a swathe of new commercial partners seduced by a diverse offering under the Wasps brand – Jaguar Land Rover and EMC have already come on board – Armstrong hopes to double the size of the business in five years, and usher in a new era of success even sooner.
“Quicker than that. Perhaps not this season, though who knows, but the development plan is a progression,” he added. “Our ambition would be to be winning silverware quicker than those five years. There is no reason why we cannot be in the top four on a regular basis, like leading teams.
“The financial priority and playing priority can’t be divorced. We want to be successful on the pitch and income we earn through the arena and conferencing business will help to fuel that.”
Such giddy ambitions are a far cry from the desolation of three seasons ago, when Wasps were losing £3m a year, rented their Adams Park home and almost went bust. “I suspect the business was in danger of imminent administration towards the end of 2012,” Armstrong said.
Irish insurance entrepreneur Derek Richardson staved off the threat by buying the club in April 2013, handing them a loan and then putting up some of the cash for the Ricoh purchase in October, the rest of which was borrowed from Coventry council. That deal was led by Armstrong, whose expertise in the hospitality industry, the consumer sector – he worked at Diageo and Pepsi – and love of rugby – he supports his native Ulster but calls Wasps his second team – made him Eastwood’s choice of negotiator, and now, successor.
“I bought the Ricoh for Derek and the board, and stayed on to help with the integration of the two businesses into one,” said the Northern Irishman, who chairs an amateur rugby club in Effingham, Surrey. “We’ve completed the moving-in phase. Now is the time to really get things motoring and hence now is the time for becoming group CEO.”
Wasps’ next major deal could see the Ricoh Arena take on a new naming rights partner, with the photocopier maker’s contract up for renewal in the summer. Armstrong says the decision is Ricoh’s but added: “We will be able to change the name shortly. We are very interested in other partners that might be coming into that. We’re not in a position yet to talk about that in detail, but the level of interest we’ve had has been phenomenal.”
Moving has buoyed spirits at the club: victory over Gloucester on Sunday was Wasps’ fourth from six in Coventry, while the fresh optimism persuaded England forward Joe Launchbury to sign a new three-year contract, says Armstrong.
More big names might be lured were the Premiership’s salary cap, which limits wage bills to £4.76m plus one exempt player, not preventing Wasps from fully exploiting their new-found financial supremacy and competing with their unshackled French rivals.
But Armstrong insists Wasps want to retain the salary cap for the sake of the English game. The club instead plans to spend its resources on a state-of-the-art new training ground ready for 2016 and recruiting the best coaches and medical and conditioning staff.
“We believe the salary cap is vitally important in English rugby. The worst thing that could happen would be an environment with no cap where the richest club wins the league,” he said.
“The sport needs to have a prosperous Premiership in which there are several clubs challenging for honours, in which the attractiveness of the game drives more people to watch at the ground and on TV. This season it’s never been more exciting. That I think is driven largely by the salary cap.”
Relocating has not been universally popular. A quarter of season ticket holders – around 750 – claimed refunds, although that effect has been outweighed by 1,500 locals buying half-season passes, and Armstrong says Coventry taxi drivers have thanked him for taking Wasps to the city. He is so confident of winning over the remaining doubters that he has even taken on Eastwood’s offer to act as target practice for the most upset.
“They can definitely throw eggs at me any time they like,” he said. “For the first week after the news they probably would’ve taken up that offer. After a few days the emotional side dies down a little and the rational side comes through, and the benefits of moving to the Ricoh and what it means for the club become clearer. Now the feeling among season-ticket holders is very positive.”