It is exactly six months since I took over as Chair of British Rowing (the appointment having started on 1st April 2018), so I thought it was a suitable moment to do what I have been saying I will do for ages: start to put down a few thoughts about how I see the world.
The period since spring has been busy. We’ve only had three Board meetings (May, July and September), but in addition to those I’ve been to quite a lot of events – regattas at Wallingford, Maidenhead Juniors, Marlow, Henley Women’s, Henley Royal, the British Masters, the Europeans at Strathclyde, the North of England Sprints, World Cup 3 in Lucerne, Power 8s in Bristol, the British Offshore, the Commonwealth Beach Sprints, and the World Champs in Plovdiv – and have accepted invitations to visit one region and two clubs. There have also been Regional Chairs’ meetings, a morning down at squad trials, and the ‘day job’ of sitting down with the Exec to talk about strategy and vision. On top of all of which, I was on my way to the U23s in Poznan, but only got as far as Luton airport. What a lovely place to spend five hours that is, before they cancel your flight. I can recommend it to anyone. 🙂
With all that, I have had a lot of conversations with a wide range of stakeholders, and lots of thoughts arise. I can’t cover them all in one post, so I will aim to return to them in the coming weeks. And for now, I’m just going to talk about our finances.
It’s been quite notable to me that of all the subjects that are raised with me by people when I go around, British Rowing’s finances are not high on people’s agendas. Perhaps this is because people consider us to be a rich sport, as a result of their knowing about our UKSport funding. What few seem to realise, though, is that that funding is ring-fenced for very specific purposes; and in terms of our day-to-day finances, we have for some time been running a budget deficit. It isn’t an insignificant one either. In fact, when you combine the deficit with financial investment in new ideas like the Power 8s (of which more another day), we are, in round numbers, spending £750,000 a year more than we have coming in.
When you consider that we have around £5m in reserves, and a reserves policy that requires us to hold £3.75m in order to allow an orderly run-off of our obligations, you don’t need to be a mathematician capable of dissecting PRI to work out that the position is unsustainable for very long. Were we to keep spending at that level with the same income, then in a couple of years, we’d be going bust.
Hoorah, I hear the cynics say. What did British Rowing ever do for us anyway? (More of that in another post soon, too…) But for now, let’s accept for a moment that BR going bust is not a great idea. What, therefore, to do to make sure it doesn’t happen?
Well, we could stop spending. But there are not many spending lines on the budget that can be cut – certainly not of a size that will make a dent in our overspend, even if we take out investment (a bad idea I’ll address in a future blog) and just look at the budget deficit represented under Business as Usual. The biggest easily deletable line is Rowing and Regatta magazine, and I was delighted that the Board was unanimous, recently, in agreeing that cutting that (when we want to build an ever-stronger community, and communicate more, not less, with everyone) is not a good idea in the absence of a lot of groundwork being done first.
Other than that, there’s not a lot of fat that can come out: in fact, you could argue that many of the programmes that we absolutely have to run as an NGB (safeguarding, etc.) are already run on a shoe-string. In short, if we have to solve our budgetary position by cutting stuff, no-one is going to be happy – least of all me.
Now, you didn’t need to be Einstein to work out the maths; and you don’t need to be Keynes to get the economics. If we can’t cut spending, then we have to grow the income lines, and “income lines” means one of two things: either sponsorship, or membership income. And in the absence of much of the former (again, more on that another time…), then it has to be the latter that grows. And there are only two ways to grow your membership income: a good way and a bad way.
The bad way is obvious, and a route to oblivion: put membership fees up. Short term gain, long term disaster. Upset everyone, see people leave, have fewer people to get subs from, put subs up again: the vicious circle you create is obvious. It’s the simplest way to destroy the sport, squeezing ever fewer numbers of people for more and more money, and it’s not what we have any intention of doing while I’m in the seat. The path we follow has to be the good way – and for that, we need members’ help.
The good way, obviously, is to increase the number of people who are paying a sub in the first place: that is, significantly grow the membership of British rowing. Is that realistic? In my view, it is – for one simple reason: there are, I believe, literally tens of thousands – perhaps even hundreds of thousands – of people out there who readily say that, “rowing is my sport” – but who don’t pay a sub that proves it.
Of course, the obvious question is, “why the hell should they?” – and I am afraid that that, again, is a subject I will leave for another time – although in this case, next time at least (so you don’t have too long to wait!). But for now, suffice it to say that this is our challenge, as I see it: to engage with, and persuade to join us, a lot of people who love the sport just like members do, but who for whatever reason are not at the moment members themselves.
What sort of people? Well, folk like the 20,000 or so individuals who we know are currently members of a rowing club somewhere in the country, but not members of British Rowing – some of whom pay several hundred pounds a year to wear a tie and have access to a clubhouse that they don’t actually use. Or, the literally thousands of people who are members of the Stewards Enclosure at Henley, who also pay vast subs every year in exchange for tickets that they leave in a drawer (yep, me too), who need each only pay the cost of one Wednesday ticket a year to British Rowing to safeguard the sport. Or the multitude who don’t fall into that category, but are nonetheless former rowers – oarsmen and women who were members while they raced but who look at membership as a tax and a race licence, when it is so much more than that (wait for the post!! ;)). Or even the throngs of parents who go and cheer on their children at regattas all over the country, who have got “the bug” too late (in their view) to get out on the water themselves, but who compete through their kids and extol the virtues of the sport. They currently would not even consider why they should join up, not least because there isn’t really a membership category that fits them.
I think it is our challenge to explain to these people why they should be – no, why they will want to be, once they have had it explained – members of British Rowing. To the explanation itself, I will turn another day. But if we succeed in persuading them, we will wipe out the deficit that hangs over us, and we will take the sport forward in a pile of different ways which I hope to get to on this blog over the coming weeks and months.
For now, one last thought. British Rowing is just about to embark on a comms programme around a new membership structure that details how we will be moving from the old categories of Platinum, Gold and Silver to Row, Race, Coach and Support. It will explain how as well as being a modern makeover, the new categories will allow the NGB to speak to each defined group about things that matter to them. In other words, it’s an enabler to offering more bespoke comms to members going forward.
But for me, the most important thing about the new structure is not the new membership cards (which are great) or the significantly improved management that will result from it (which it definitely will). The most important thing is that the new structure will introduce a mechanism by which we can engage with all these people that I have detailed above, and bring them into – or back into – our sport. With that, and with your help in selling the reasoning in the coming months to all the people you know who fall into the categories (and more) that I have mentioned above, we can wipe out our financial deficit – even get to run a surplus – and not just secure the sport, but build it an ever brighter future.
Of which, more anon.
Bit disrespectful to announce this in a personal blog just before the AGM. I am sure you have identified two critical issues but both have been the same for the last four years. Why have the board not held the CEO to account or come up with a plan?
Not sure I understand this comment on any level…
Disrespectful to whom? And in what way?
And what has been “announced”? The numbers are in the financial statements, there for everyone to see. Indeed, as far as timing is concerned – although that was driven (as per the first line) by the fact that it is six months since I took on the role – the fact that it is just before the AGM is fortuitous: I would expect members to bring up the fact that the financial statements show very clearly that we are running a deficit, and ask what we are doing about it (indeed, I was asked about it on Saturday at a Regional Chairs’ meeting). The answer to that is that like all businesses, we have options of either cutting programmes or raising revenue, and the blog outlines that we are very keen to do the latter rather than the former (as well as how we can do that without having to increase the burden on our existing members).
As to your final comment, again I am not sure which bit you are missing. The Board does hold the CEO to account, and the CEO and his team have plans which they are in the process of implementing. Not all of them are outlined here, but some are – such as investment in new formats, and changing the membership structure to allow vast swathes of people who are not currently members to become members easily. Perhaps you didn’t read that far?
The whole point of the blog was precisely to say that there is stuff going on, but that ultimately we will need the membership’s help to get people who will be well-known to them to join up as members. And to lay out the context for future blogs where I will outline how I think that is most easily done, and what case can be made. I’m sorry if that isn’t clear.
I do wonder if this reveals how far you are from grasping the issue if you think that there is an untapped potential membership pool that will create sufficient income to plug the financial gap in three years – which in your original post is what you are saying is needed. Say the gap is £500k per annum that is going to be 25,000 to 30,000 new members at something between £20 to £30 per member per year. I am sure you are right that there should be a way of tapping in to the “vast swathes” but 25,000 from a standing start and with what seems to be a falling current membership? I read and re-read your blog and there is no lack of ambition (good) but where is the reality? And what of sprints – what was the return on the investment which I understand was in the £350k plus bracket – did it wash its face or anything close to it?
Thank you for going public on all of this and opening yourself up to comments. There was a graph distributed by the ex treasurer from a council meeting last year which showed that every year that Dame Di Ellis was in charge there was a surplus, every year since there has been a deficit and it is getting bigger not smaller. Looked like something is going very wrong. Why spend more when you have less?