July update for 2020 members

01
Jul
Category: The Club

July update for 2020 members

Update from owner Neil Hudgell.

Dear Member,

I hope you continue to stay healthy and safe and are finding a path back to some level of normality!

As promised, I am writing to you with a further update on the Club’s current situation.

You will have read in the press, that the Betfred Super League season will resume on the 2nd August with our game against the Toronto Wolfpack. It is great to finally have a date in the diary to work towards.

At this stage, we do not yet know how important that fixture might be as the Rugby Football League are still to determine the question of promotion and relegation at the end of this year. They need to get on and do that so that everybody understands the rules of engagement and what is at stake before a ball is kicked in anger.

Financial impact

In my last note I stated that the Club was at a critical point in its history. That remains to be the case. With so many current uncertainties we remain in a precarious position.

Financial forecasts show that even with Government support, wage reductions, grants, and furlough payments we stand to be behind forecasts to the tune of £500,000 in 2020.

Before we factor in loan support and other reductions, in 2021, our estimated shortfall is approaching £2 million.

As you will see, therefore, there is a need, across the board, for prudence of an unprecedented level relating to all aspects of the Club from first team, youth development to support staff and stadium investment.

Of all of those the one that I would want to protect the most is youth development as that is where the long-term focus of the Club’s strategy rests.

In previous years, the Club has been supported by myself, and other Directors, to the tune of £500,000 and more through loans and sponsorship. Revenues in my various businesses are compromised and that position continuing is not an option.

Whilst it was something we were hoping to resist, we are going to have to make use of the Government loan. It will be needed, in part, to cashflow us until the end of this year and to absorb a significant part of the shortfall in 2021.

There is uncertainty around the terms of repayment of that loan, but it can be assumed that there will be a considerable number of years over which we will continue to bear the effects of this current crisis. I am not comfortable straddling the club with long term debt (it currently owes little other than to me and my companies) but there is not a choice I am afraid.

It is important to be open and honest with supporters about the wider impact of decisions being made at the moment with the effects probably lasting the next decade or so.

Initially, the return of Super League will be behind closed doors. The picture is developing week by week. We are hopeful that the fixture list will be weighted to enable us to play some of the catch up mid-week games and bigger ties towards the back end of the season when we hope to be back in front of crowds.

Whilst it is good news for the competition to return earlier, there is a cost. Testing will cost the Club in the region of £100,000 which is not budgeted for even in the revised numbers that have been put together. We are having to find that money to be able to deliver our commitments to Sky and to our partners, sponsors, and supporters.

2020 memberships

On to 2020 memberships and thank you to everyone who has completed the survey. Your input and feedback are critical.

In total, 58% of you indicated that you have been financially affected by the crisis. Our thoughts are with those families who are doing their best in these circumstances to do what is right for them. It is fabulous to see so few people have asked for a refund on their memberships and have left them active. We are not a rich sport, nor a rich club and I hope you know what a massive difference that makes to us. So, from everyone at the Club thank you for your patience and support over the last few months.

Based on the survey feedback in membership revenue alone we could be looking at refunds or credits worth £300,000; adding that together with the impact of lost ticket sales, concerts, food and beverage sales, reduced Sky TV funding and hospitality sponsorship, this leaves us in an incredibly precarious position.

We have listened intently to your wide-ranging feedback and suggestions. We are working on bringing these to life as soon as possible so you can choose what to do with your 2020 membership should we not deliver full value this year. The level of feedback has been such that we are still spending some time reviewing those responses and collating a package of benefits for our members.

I appreciate that the situation the Club finds itself in will be becoming more apparent to you now. With each day that passes we get closer to a return to action at Hull College Craven Park. I am sure it will be a milestone moment for all of us to see Rugby League being played again. As and when it does, I think it is fair to say that it is only the beginning of the next stage in the fight for the survival of Hull Kingston Rovers.

All that said, you can be assured we are all committed to the cause. We remain upbeat about navigating a way through to better days, a prospering club and wider game. Out of adversity comes opportunity and that is where I want to concentrate our efforts.

I will update you further as and when I can.

Until then stay safe. Up the Robins.

Neil Hudgell, Hull Kingston Rovers Owner.

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