These days as you walk to Twickenham, the home of the Rugby Football Union, it’s easy to forget that its primary purpose is to house 30 over-sized men running around a field smashing lumps out of each other. The gleaming new South Stand, which has taken the stadium capacity to over 80,000, now contains an equally gleaming Marriott Hotel, a Virgin Active Health Club, a giant conference centre, and a bar the size of Belgium – all of which are providing the RFU with new streams of revenue to plough back into the game. For a sport that was still run and played by amateurs 15 years ago, it’s a remarkable transformation – and much of the credit must go to outgoing chief exec Francis Baron, who’s about to retire after 14 years at the helm. The combative CEO has made a few enemies in his time – but he’s certainly leaving the game in a much better financial state…
Baron was running holiday company First Choice when he got offered the new RFU CEO job. Rugby was going professional, but was totally unprepared for it. The clubs, suddenly paying salaries they couldn’t afford, were losing £30-40m a year and the RFU was on the point of going bust – even before the additional cost of introducing a brand new structure. Not exactly an easy gig, then. But Baron, a long-time rugby enthusiast, jumped at the chance (much to the astonishment of his wife). ‘I’d done a number of turnarounds before in my career,’ he tells MT. ‘I quite like those challenges’.
Baron immediately set about trying to overhaul the RFU, so it would operate to plc standards. But as he soon realised, sporting bodies tend to be complex beasts. In rugby, the grassroots game is run by an army of 50,000 volunteers – many of whom weren’t terribly impressed about this businessman suddenly being parachuted in over their heads. Baron readily admits that this forced him to change his approach. Since he needed their support to get stuff done, he couldn’t afford to ignore them – and he couldn’t go telling them what to do. Instead, he had to get out there and win them over. These days, that includes regular weekend road shows, where he goes to rugby clubs and takes questions from the assembled throng. Not many plc bosses have to do that. ‘It’s like having to talk to your shareholders every day of the week, instead of 3-4 times a year. That’s a massive difference.’
Financially, Baron says the key was not only to manage the union’s costs, but also to grow revenues – specifically to try and make its income less cyclical. Since there’s a different number of home games every year, with every fourth year disrupted by the World Cup, relying solely on ticket sales made the RFU’s revenues distinctly lumpy. Hence the need for ‘counter-cyclical ventures’ like a travel club for England fans (which sells trips to away games), hotels and exhibition space (which is largely in use during the week rather than at the weekend – there was a big expo on when MT visited).
But ultimately, it all comes back to on-the-field success. ‘The reason we want to be commercially successful is so we can invest in development of our game,’ insists Baron. Take the World Cup, which England is hosting in 2015. Deloitte reckons the economic impact could be as much as £1.2bn, and after fulfilling its obligations to the international governing body, the RFU plans to invest the entire surplus in the grassroots game. Since Baron played a key role in getting the tournament here, was he not tempted to hang around until then? ‘You have to focus on 4 year cycles. It’s right to give my successor a chance to get his feet under the table for 2011, and have ample time to put into effect all the good plans we have for 2015.’
Baron has had plenty of critics during his time at the RFU. Some argue that Twickenham prices are too high, or that too many seats go to corporates. And he’s had endless stick about the coaching set-up of the national team – although the World Cup was won on his watch in 2003, the suggestion is that he failed to build on this subsequently (and our recent dismal form hasn’t helped on that score). But it’s hard to argue with the remarkable job he’s done in transforming the RFU’s commercial fortunes. Unfortunately though, as his successor will soon find out, this is unlikely to lead to universal popularity unless England start winning major trophies again...
Francis Baron is also the subject of the 'If I Could Start Again...' column in this month's MT. You can read it online here.