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Adam Pearson and Private Equity rear their ugly heads again


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2 minutes ago, Wellsy4HullFC said:

He seems incredibly desperate for the sport. I'm the ten years he's been at the club, a lot has changed in terms of the running of the game.

If there was a way out, I'm sure he'd take it.

I assume he’s speaking with Hudgell right now to get the ball rolling

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1 minute ago, Wellsy4HullFC said:

Like who?

Where is this line of wealthy investors? I'm pretty sure he'd step aside the second one popped up.

What has Pearson actually invested? He's a football man that went from football club to football club before ending up at Hull FC. Im not sure why but RL does allow the kudos of owning a sports club without the investment that football needs and I've not seen anything that indicates he is a man of wealth like other owners that can bankroll a club.

In recent years he has overseen falling attendances and constant moaning about no money. He is an owner, the ball is in his court to do something. What is his plan to change this? Even across the city Hull KR have a plan, are developing their ground bit by bit, are looking to buy the freehold etc He is part of the problem and he is not the only owner like this by any means.

He makes contradictory statement after contradictory statement and changes his tune year on year. He's going on about short sighted decisions yet wants private equity as a quick fix, voted against Toronto and was part of the Super League breakaway to then go back to the RFL. Oh and a couple of years ago he talked about taking the fight to RU to then do nothing but moan about having no money since.

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Sure, there are a lot of unanswered questions, and mentioning things like mergers are just red rags to the bulls for opponents, so he should have avoided that. 

But his broad thesis remains correct: English rugby league is undervalued, but can't realise that value without external investment on a whole sport basis. 

There aren't enough rich people looking to own rugby league clubs, and even if there were, putting money in on a club-by-club basis is highly inefficient. 

We'll keep coming back to PE because it, or something like it, is the only option left. And if we keep turning it down then I think Pearson is ultimately right, that we could start the death spiral sooner rather than later. Sky's probationary TV deal should be flashing red lights to everyone in the sport every day. 

Edited by Toby Chopra
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5 minutes ago, Toby Chopra said:

Sure, there are a lot of unanswered questions, and mentioning things like mergers are just red rags to the bulls for opponents, so he should have avoided that. 

But his broad thesis remains correct: English rugby league is undervalued, but can't realise that value without external investment on a whole sport basis. 

There aren't enough rich people looking to own rugby league clubs, and even if there were, putting money in on a club-by-club basis is highly inefficient. 

We'll keep coming back to PE because it, or something like it, is the only option left. And if we keep tuning it down then I think Pearson is ultimately right, that we could start the death spiral sooner rather than later. Sky's probationary TV deal should be flashing red lights to everyone in the sport every day. 

For me, the main attraction of PE is it would reduce the power of the owners and force the sport to up its game due to profit motive.  

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5 minutes ago, Damien said:

What has Pearson actually invested? He's a football man that went from football club to football club before ending up at Hull FC. Im not sure why but RL does allow the kudos of owning a sports club without the investment that football needs and I've not seen anything that indicates he is a man of wealth like other owners that can bankroll a club.

In recent years he has overseen falling attendances and constant moaning about no money. He is an owner, the ball is in his court to do something. What is his plan to change this? Even across the city Hull KR have a plan, are developing their ground bit by bit, are looking to buy the freehold etc He is part of the problem and he is not the only owner like this by any means.

He makes contradictory statement after contradictory statement and changes his tune year on year. He's going on about short sighted decisions yet wants private equity as a quick fix, voted against Toronto and was part of the Super League breakaway to then go back to the RFL. Oh and a couple of years ago he talked about taking the fight to RU to then do nothing but moan about having no money since.

He's invested heavily in our academy and training facilities, he's not been afraid to sack underperforming coaches, he's signed some big players, all of which it contributed to a period of success for the club. I think it's disingenuous to suggest he's not invested much.

He's not a big money backer, but he's put a lot of what he can in to this club and he's allowed his say. I might not agree with everything he is saying, but he's completely correct that the game is in a state. It's the worst it's been in for over 20 years for sure.

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Yeah, I tend to agree with the majority here. Pearson is talking a good game, he’s done so before, but he delivers little when he talks of the game as a whole. 

It just seems very Rugby League like to want to copy an as yet unfinished maiden tournament/concept in another sport that is still some way from being defined as a success or failure. 

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1 minute ago, Toby Chopra said:

Sure, there are a lot of unanswered questions, and mentioning things like mergers are just red rags to the bulls for opponents, so he should have avoided that. 

But his broad thesis remains correct: English rugby league is undervalued, but can't realise that value without external investment on a whole sport basis. 

There aren't enough rich people looking to own rugby league clubs, and even if there were, putting money in on a club-by-club basis is highly inefficient. 

We'll keep coming back to PE because it, or something like it, is the only option left. And if we keep tuning it down then I think Pearson is ultimately right, that we could start the death spiral sooner rather than later. Sky's probationary TV deal should be flashing red lights to everyone in the sport every day. 

Just because you may agree with him doesn't make it correct.

Selling part of the sport so that a PE firm can bleed the sport dry and get its money back in less than 5 years is a terrible idea. The PE 'investment', and I use that term in the loosest possible terms as the reality is that the PE company would use loans which it then leaves Super League with, would achieve nothing. What was offered wasnt even what the reduction in the TV deal would be over 4 years and is certainly not transformative.  All it would do is saddle the sport with huge debt once the PE firm jumps ship and would cripple the sport. Owners moaning about not having enough money would have an awful lot less when a PE firm takes 27% of SL income going forward. It's short sighted and taking PE money so owners can bale or pay off existing debts does nothing.

The game has suffered for decades from terrible mismanagement and a complete lack of a plan or strategy. That is what needs sorting but it isn't a quick fix and involves hard decisions.

 

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Adam Pearson has done a lot of good for Hull FC but he is more often judged on his comments alone rather than actions.  Just say very little would be a better option.

His main issue is the running cost of the stadium, which is very difficult to address.  The Allams do not give two hoots what he or the council says.  The covid situation, in turn, exacerbated the costs of the stadium to Hull FC.

The only way out, imo, is find the funding for a new stadium.  

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2 minutes ago, Damien said:

Just because you may agree with him doesn't make it correct.

Selling part of the sport so that a PE firm can bleed the sport dry and get its money back in less than 5 years is a terrible idea. The PE 'investment', and I use that term in the loosest possible terms as the reality is that the PE company would use loans which it then leaves Super League with, would achieve nothing. What was offered wasnt even what the reduction in the TV deal would be over 4 years and is certainly not transformative.  All it would do is saddle the sport with huge debt once the PE firm jumps ship and would cripple the sport. Owners moaning about not having enough money would have an awful lot less when a PE firm takes 27% of SL income going forward. It's short sighted and taking PE money so owners can bale or pay off existing debts does nothing.

The game has suffered for decades from terrible mismanagement and a complete lack of a plan or strategy. That is what needs sorting but it isn't a quick fix and involves hard decisions.

 

   At last i agree with Damiens post.A private equity agreement would bleed the sport of funds.Players may find themselves earning smaller contract money.Who would invest in a business desperate for money.Some private equity agreements work but when they go wrong they go wrong big time.

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I aren't sure PE is a good idea, I don't know enough about it to really form an opinion.

But what I do know is that doing nothing is equally as risky. Getting a mortgage is risky.... anything could happen but we still buy houses.

I must stress I aren't pro PE, just that sitting back and hoping for the best will probably have the same end result for RL, ie irrelevance.

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Just now, Lowdesert said:

Adam Pearson has done a lot of good for Hull FC but he is more often judged on his comments alone rather than actions.  Just say very little would be a better option.

His main issue is the running cost of the stadium, which is very difficult to address.  The Allams do not give two hoots what he or the council says.  The covid situation, in turn, exacerbated the costs of the stadium to Hull FC.

The only way out, imo, is find the funding for a new stadium.  

There’s one ready made in the East of the city? 😜

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11 hours ago, The Daddy said:

So in the recent BBC Rugby League podcast with Dave Woods, Adam Pearson says that Rugby League will be dead in a year if it doesn't bring in private investment. 

Unfortunately Adam and the other club owners are the problem. The more they make decisions for the whole sport the worse off it becomes. The sport doesn't need private equity it needs club owners to stay away from making decisions that affect RL's health and value.

Furthermore why do the club owners/executives/chairman feel as though they need more of the spotlight than the players that actually play the sport? Isnt that also a part of the problem? Michael Carter, Derek Beaumont and Adam Pearson boosting their own profiles on Twitter, podcasts and making press releases taking the limelight from the players 

If Private Equity came in, the owners would need to relinquish some control. Eddie Hearn was interested in coming into RL, but said the owners wouldn't give up control.

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Also when it comes to a lack of money and investment. We don't make it easy for outside backers when they do come into the sport. 

We have Toulouse who are very professional, play in a great stadium and seem to have sponsors and backers coming out of their eyeballs. They also open up a possible French TV deal. Yet we have them treading water and turn them down for Super League in favour of Leigh. We had Toronto who had huge crowds and were a potentially big club, yet we threw that away and gave them no funding and little understanding during a world pandemic. We also had Koukash who was limited in every way at Salford when he tried to think big.

2 potentially big clubs, who had investment and who are exactly what Super League needs. It doesn't really help that we don't let the cream rise to the top and put every obstacle in their way when they try to do so. It seems outside investment is only good when it benefits the status quo and doesn't jeopardise the cartel.

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Private equity don't "invest", the usual strategy is buy in, borrow heavily -in this case probably against at future TV revenue- extract as much money as possible in dividends and don't invest. As any PE would have no prospect of selling on, except back to club owners, the only way to make money would be through taking a cut of TV income.

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23 minutes ago, Hela Wigmen said:

Yeah, I tend to agree with the majority here. Pearson is talking a good game, he’s done so before, but he delivers little when he talks of the game as a whole. 

It just seems very Rugby League like to want to copy an as yet unfinished maiden tournament/concept in another sport that is still some way from being defined as a success or failure. 

Sure, the success or not of the Hundred won't be known for a while, but the problem it was designed to deal with has been studied by the cricket authorities for years, and shares many similarities with rugby league's challenges. 

ie how to break out of the usual demographics and flogging the same old fans for more, in a the wider context of a rapidly changing economic and social backdrop. 

(And like RL, the existing fans - by definition - don't see the need for change) 

Obv there are lots of differences between cricket and RL too, and time will tell whether their attempt will work. 

But at least they're trying something. 

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Does this mean that Pearson's "we'll be as big as rugby union" plan has been abandoned? 

Pearson has form with the "the game is dying" stuff and whilst I think some of that sentiment is fairly-placed, it has become a bit of a trope of his whenever he wants some attention. 

But it's massively frustrating to see people like Pearson talk about "needing expertise in marketing, commercial, etc" and suggesting that the game needs to give away the family farm in order to get it. Those areas are Pearson's job. He runs one of the more eminent clubs in the sport, he has a vote on the direction of the sport. He employs people to market the club and, by extension, the sport, to get people watching rugby league, to attract sponsors and attract media coverage. That his his remit. 

If the sport doesn't want to invest in that sort of stuff, that is a perfectly fair decision but there are consequences of that. The RFL recently advertised for a marketing and communications executive role with the pitiful salary of £21k. If that's how seriously the game's stakeholders take media and communications, then no amount of PE cash will change that. 

The game doesn't need PE cash or an Eddie Hearn to "save it" and tell it how to market itself. It just needs to take those issues seriously. 

Edited by whatmichaelsays
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2 minutes ago, whatmichaelsays said:

Does this mean that Pearson's "we'll be as big as rugby union" plan has been abandoned? 

Pearson has form with the "the game is dying" stuff and whilst I think some of that sentiment is fairly-placed, it has become a bit of a trope of his whenever he wants some attention. 

But it's massively frustrating to see people like Pearson talk about "needing expertise in marketing, commercial, etc" and suggesting that the game needs to give away the family farm in order to get it. Those areas are Pearson's job. He runs one of the more eminent clubs in the sport, he has a vote on the direction of the sport. He employs people to market the club and, by extension, the sport, to get people watching rugby league, to attract sponsors and attract media coverage. That his his remit. 

If the sport doesn't want to invest in that sort of stuff, that is a perfectly fair decision but there are consequences of that. The RFL recently advertised for a marketing and communications executive role with the pitiful salary of £21k. If that's how seriously the game's stakeholders take media and communications, then no amount of PE cash will change that. 

The game doesn't need PE cash or an Eddie Hearn to "save it" and tell it how to market itself. It just needs to take those issues seriously. 

Nah he's still banging that RU drum. Just that we're now only a £90-100m PE investment away from it.

https://www.bbc.co.uk/sport/rugby-league/58264373

Desperate, desperate stuff.

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44 minutes ago, Damien said:

Just because you may agree with him doesn't make it correct.

Selling part of the sport so that a PE firm can bleed the sport dry and get its money back in less than 5 years is a terrible idea. The PE 'investment', and I use that term in the loosest possible terms as the reality is that the PE company would use loans which it then leaves Super League with, would achieve nothing. What was offered wasnt even what the reduction in the TV deal would be over 4 years and is certainly not transformative.  All it would do is saddle the sport with huge debt once the PE firm jumps ship and would cripple the sport. Owners moaning about not having enough money would have an awful lot less when a PE firm takes 27% of SL income going forward. It's short sighted and taking PE money so owners can bale or pay off existing debts does nothing.

The game has suffered for decades from terrible mismanagement and a complete lack of a plan or strategy. That is what needs sorting but it isn't a quick fix and involves hard decisions.

 

All such accounts of PE assume that the value of the competition won't be increased by the investment - but that's the whole point of doing it, and by taking control out of the hands of short-sighted chairman you're more likely to get a result. 

And yes, it will involve some hard decisions that will upset many. I don't think anyone has claimed it's the easy option. 

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2 minutes ago, Toby Chopra said:

Sure, the success or not of the Hundred won't be known for a while, but the problem it was designed to deal with has been studied by the cricket authorities for years, and shares many similarities with rugby league's challenges. 

ie how to break out of the usual demographics and flogging the same old fans for more, in a the wider context of a rapidly changing economic and social backdrop. 

(And like RL, the existing fans - by definition - don't see the need for change) 

Obv there are lots of differences between cricket and RL too, and time will tell whether their attempt will work. 

But at least they're trying something. 

Yes, they’re trying something based on market research. We’ve (or to be precise Pearson) seen The Hundred and has declared it the saviour of Rugby League without any research behind his claim. Sure, the market research in Rugby League could well be very similar to the research undertaken by cricket and there may well be similarities between the two sports but without any research, to proclaim saviours of the sport of Rugby League is premature and ill-judged right now and just comes across as a very Rugby League thing to do as we never have a strategic plan for anything. 

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5 minutes ago, whatmichaelsays said:

If the sport doesn't want to invest in that sort of stuff, that is a perfectly fair decision but there are consequences of that. The RFL recently advertised for a marketing and communications executive role with the pitiful salary of £21k. If that's how seriously the game's stakeholders take media and communications, then no amount of PE cash will change that. 

The game doesn't need PE cash or an Eddie Hearn to "save it" and tell it how to market itself. It just needs to take those issues seriously. 

That tells me the sport DOES want to make that investment, it just doesn't want to/can't afford to cut what it spends on other stuff already to make it.

So to me that just make the argument outside investment stronger: you use the money to invest in all the things that you'd like to that you can't afford, and substantially increase the value of your business. So when the investor cashes out, you're still better placed than before. 

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6 minutes ago, Hela Wigmen said:

Yes, they’re trying something based on market research. We’ve (or to be precise Pearson) seen The Hundred and has declared it the saviour of Rugby League without any research behind his claim. Sure, the market research in Rugby League could well be very similar to the research undertaken by cricket and there may well be similarities between the two sports but without any research, to proclaim saviours of the sport of Rugby League is premature and ill-judged right now and just comes across as a very Rugby League thing to do as we never have a strategic plan for anything. 

Indeed. But those of us who have come on here saying that the sport needs to invest in market research and audience profiling are just told that we "want the sport to spaff it's money on consultants". 

But @Toby Choprais bang on when he says that "like cricket, the existing fans don't see the need for change". 

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1 minute ago, Toby Chopra said:

That tells me the sport DOES want to make that investment, it just doesn't want to/can't afford to cut what it spends on other stuff already to make it.

So to me that just make the argument outside investment stronger: you use the money to invest in all the things that you'd like to that you can't afford, and substantially increase the value of your business. So when the investor cashes out, you're still better placed than before. 

Does it? To me it reads that the sport wants to spread the risk, rather than make the investment itself. 

To me, the reason why this problem seems so big, so insurmountable and - importantly - so expensive is because the issue has been left to snowball for so long. 

Centuries of marketing research shows that those businesses that invest in both long-term and short-term marketing make more money (in the long run) than those that just invest in short-term marketing. This isn't a closely guarded industry secret. 

For years, the clubs have just focused on the short-term - selling tickets to the next game, hitting the season ticket target, selling short-term sponsorship deals (how many clubs change their shirt sponsor year after year?), neglecting the longer-term challenges - where is the next generation of supporter coming from, how do we add value to the next TV deal and how do we use digital to overcome our geographic disadvantages? The strategy to add value to the TV deal should have started the second the ink dried on the last one but, given what we saw played out in public, it had all of the hallmarks of schoolkids rushing their homework the night before it was due. 

Now that lack of investment in long-term strategy has come home to roost and, unsurprisingly, it looks too expensive. The clubs have been penny wise and pound foolish, and now they want to sell the farm to fix their mistakes - mistakes that Peason himself has to share responsibility for. 

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