Bill Sweeney, RFU CEO: Behind the Curtain of Rugby's Most Scrutinised Organisation (Ep61)

22:40but let's cling to the positives. You had 75 million of bank dead in 2020. You now have none. You have 38 million cash position in 2020. You now have 61 million. So financially, the loss that you highlighted last year, the fact that was forecasted is not a surprise. We're still thinking about this in a positive light of the finances of rugby in this country from the RFU's perspective. Yeah, yeah. We feel, I mean, it's one of the things I will always be most intensely proud of of our performance financially going through COVID, coming out of COVID. COVID was bad enough. I mean, in the two impacted years of COVID, we lost 150 million worth of revenue.

23:15And a lot of other businesses, you know, were the same. So we were thinking, how the hell did we survive through this? Where do we go next after this? And as you say, we started that cycle with 0.7 million in reserves and 75 million in debt. We got through COVID. Sitting here today, we've got 61 million of cash. We've got 83.6 million in reserves. We've got zero bank debt. Zero. Nothing. We've got long-term debentures, but they don't mature for 51 to 70 years. So that's a different type of issue. So from a financial performance perspective, going through that period, we're intensely proud of what we're doing.

23:49And it sets us up for things like investment in the stadium in 2027, because it has to be rebuilt. But you've got this very negative story out there, which we're finding it hard to address. And part of it is to do with some misinformation from other sources and whatever, but we've just got to persevere with it. Well, I think that's where we have to talk about then the LTIP payment. And let's be really clear on this. This was agreed in COVID. And it was called the great move at the time, right? The LTIP scheme. At the beginning, everyone was looking at this going, while other clubs and federations are losing their executives, we as rugby are keeping it sustainable.

24:21You didn't lose a club during COVID. And this LTIP payment of£350 ,000 to you, in the year the RFU lost 38 million and 27 or 42, I'm unsure on that number, but people lost their jobs. the perception issue is the problem. Given the timing being bad, do you wish you could have delayed it to prevent it seeming like it was bad? Yeah, it's horrendous. I mean, it's horrendous and it's that that's caused the current SGM and it's that that's caused the... Initially, it was the cause of a lot of the unrest and what's been going on. And people have got short memories for what it was like in COVID. If you go back and remember, it was a weird time and we got through it.

24:58We didn't know if we were going to get through it. We were all worried about survival. but then the board realized in the middle of 2020 they became more concerned about retaining the team post-covid because the feeling was once we do get through this and business returns to normal revenue generation is going to be slow on the uptick all your costs are going to be where they were previously and they had a lot of confidence in the executive team at the time and they said we want to keep this team in place for the next cycle which which finished 23 24 which is that loss making year so myself and the team didn't know about the ltip being put together until June of 2020.

25:31And they'd consulted with external specialists in that field to sort of look at the package. We got interviewed in terms of what the targets would be likely to be and what our views on it were. But the board's intention was to put something in there to retain that team. And I'm not daft. I remember in 2022, and you're seeing this thing coming down the track. And in 2022, I said, do we have to declare this in 2023, 2024? Because we're going to have a loss-making year. We did know at that stage, I didn't know in 2022 that we were going to have the restructuring piece. But as summer came in 2024, it's then looking very difficult with the restructuring about to happen.

26:06My preference was we deferred it to either 25 at the end of the Women's World Cup or defer it to the end of 27. Don't change it, but just delay the payment of it. Now, the view was, well, actually, that's a little bit more mischievous because we've declared it in the annual accounts. Whether you defer it until or take the payment in 25 or 27, you've still got to declare it in your accounts and it will still appear in the accounts in 24. So let's just be really upfront and honest about it. The sell tip we've put in place for this reason, this reason, this reason. It gets paid out from the accounts in 24 and let's just front up and say that's the case.

26:39Now you put that together with the restructuring we did and there were 27 people made redundant, but there were 15 positions that we didn't recruit to that were open positions. So that's the 42 figure. So there were 42 roles impacted, 27 were redundancies, 15 were we didn't fill the roles. But also the reason for that restructuring was we didn't have the right skillset to do the things like digital that we've now done. So we had to change the skillset of the organization. So part of that was the people that let 16 people reassigned into different areas, but we had to get additional skills in. So yeah, the timing was the optics and the timing were awful worse.

27:16If you scripted it, you couldn't have scripted it worse. What would you have done differently, knowing all that you know now? Out of when the ELT was put in place, if we'd had the foresight then, I'd have said, don't vest it in 23-24, vest it in 24-25. But again, similar to the British Olympic Association, when you have a major tournament like an Olympics or a World Cup, you get a lot of churn traditionally with that. So people say, right, I'll go through the cycle. I'll see that cycle out. I'll do that World Cup and then I'll go and go on to my next challenge. So I think that was in the back of the Remco and the board's mind.

27:49That's a natural place to terminate it. The SGM piece then, the council and their conversations around this and what you're going to have to go up in front of, were they made aware of the LTIP scheme? Yeah. Yeah, it was announced in the annual report when it was first put together. In fairness to council, it was announced in the annual report and there was an independent review done by Freshfield. And they basically said, look, the LTIP is fair and it's reasonable and the process that was gone through there to determine what it was, the target set, they're all fair and reasonable, but your communications weren't good.

28:21You should have maybe more upfront announced this and rather than have it on page, whatever page it was on, actually go out and make a point. But then when it's going on, where's your crystal ball to think this was going to be as big an issue in 2020 as it turned out to be? But it's not about the LTIP anymore. So the council meeting and the SGM, it's really not about the LTIP. And we've been on these roadshows. What's it about? It's tough out there running a club in the community game. They've got their business rates increases. They've got their utilities increases. Team sport in general in society is tough these days to keep the numbers going.

28:56So you've got to work really hard to get the same number of players coming in. Lifestyles have changed, accelerated through COVID. So when I played, you'd have 25 people made up at first 15. Now the average is 47 because you've got stag weekends, hen parties, golfing trips, weddings, you name it. In my day, you played your rugby season, you didn't do anything in your rugby season. Life's changed now. And people have realized there's a lot more options of a weekend. If you're not playing professionally, or you're not playing semi-professionally, and you're doing it for social rugby, I've got all these other things to do.

29:25So it takes a lot more players to run our first 15. And we've got 15 players compared to a football team that's got 11. So the community game is facing all of these pressures. They're angry at us in terms of a lack of communication. funding comes up you know everyone wants more money and then they're no different through covid we made some cuts in terms of boots on the ground people on the ground who support clubs and we made some cuts we're looking to how we build that back so there's a lot of issues there where there's some genuine unrest about we think the community game needs more the old tip was the lightning rod but really what's coming out is this is our dissatisfaction around these topics and how you're going to fix it so it's those conversations which will more dominate in terms of the sgm how did you find the roadshow how did it go really good I mean, we did, what was it, 300 clubs, I think, 400 people.

30:12Yeah, something like that. So far, we've got about three or four left to go. There's very little mention of the L-tip. And the only time it normally comes up is, look, we think the L-tip's a red herring. That's normal in businesses. And there was an understanding of that. Some places it wasn't. Some places that became more of a heated conversation. But in general, that was the general turn. But it was the same topics coming up in terms of how do we get more participants into the game? How do we work together to do that? How do you get rugby played in schools? How do you get retention of universities?

30:41But, you know, again there, at the same time, you've just done a massive commercial deal that's got a huge amount of money in for the future of the game. And then you're charged with also looking at the participation at the bottom. There's such a gap between the jobs that you're having to do here. Is the current structure right for you to be able to achieve both of those effectively? I think that's going to be one of the main topics in this governance review. And that's something we'll be on the table to discuss. Would you like them to be separated? I think in some ways, when a situation like this happens, take me out of the equation.

31:10The next person is the CEO. If you've got the next person who comes in, who's very strong commercially and very strong on the performance side, but can be the subject of an SGM if there's discontent at the community game level, whether it's real or whether it's perceived, would you run a business that way? You probably wouldn't. So you'd have to have a different CEO for the community game. Perhaps you have two of them reporting into the board. And as I said before, the board makes a decision. I used to work for Mars and you had this at Mars. So we'd have these amazingly conflicting meeting or confrontational meetings where I was the brand manager on Twix and you have the brand manager on Mars.

31:46You basically go into the war room and you've got the MD there and the head of marketing spend there and whatever. And you're basically battling each other saying Twix needs this amount of money and Mars is saying, no, we need this amount of money. and they eventually at the end of the day say well okay you're going to get that you're going to get that off you go and deal with it so do you do it that way yeah is the one part of the business which generates the revenue and the board says this is what we think is right for the community game and this is what's right for the professional game bill you were the brand manager of twix that is so cool whenever there's a snack gap twix fits that was the that was the logo then that is amazing can you imagine like day of innovation white chocolate i didn't know I had a draw on my right-hand side.

32:27And Mars goes into unbelievable levels of detail. So I had a draw on my right-hand side. And it went into, because KitKat was the major competitor for Twix. So if KitKat reduced their chocolate content by a gram, what was your response? Did you reduce yours? Or did you reduce the price? Or did you increase? And what would happen? And what was the elasticity? I mean, the amount of research that went into those sorts of things is fantastic. But, you know, we're digressing a bit. Do you think, for everything you just described, do you think it creates a governance of stewardship rather than innovation?

32:58It's the age-old analogy of no one gets fired for buying IBM. Yeah. But really what we're looking at here in sport, not just in rugby, is quite a lot of situations where there is significant change that needs to happen to keep relevant, to keep modern, to keep at the front and center of the attention economy. It does seem a bit like, because there's so many stakeholders, if you made too big a decision to upset the apple cart, hey, guess what? there's going to be an SGM you're going to face and it's going to be critical. That seems like a problem to me that needs to be fixed. Yeah, I think that's a fair question.

33:28If you compare us to a number of other sports at the moment, rugby's lagging behind in terms of innovation, in terms of how the product is packaged, in terms of how it's presented. You look at all the data that's available now. All the players are wearing GPS. You know what the force levels are. You could do some amazing things around the scrums. You can imagine a scrum with an overhead drone shot. And if the scrum collapses, you can have various sort of moving arrows in terms of, well, this was a force coming in from this side and this was a force here. And that's why the prop had to collapse.

33:56And so what do you do in the next one? So you really provide information for the fan to follow and understand. And we haven't done enough of that yet. And then you could provide that data flows to batting companies and you could open a new monetization. Yeah, absolutely. Exactly. All of that. I remember the, when was the America's Cup in San Francisco? I can't remember the year, 2000, was it 16? I can't remember. It doesn't matter. But the America's Cup was the most boring event on the planet to watch. You know, you get these two boats that go off. You had no idea who was winning. Mars offshore.

34:26Everyone's standing there watching. Not a clue what's going on. And then they brought in the guy who did all the innovation around NFL in terms of graphics on screen stuff. And then they had graphics in terms of a line across the bowers of the two boats. And it could tell you which one was in the lead. And it would tell you the wind speed and the current speed and whatever. And it would plot out the next turn at the next buoy. and if they do that turn there, what's that going to do to him for the next boy? So you just make it really, really understandable. And rugby is a complex game to understand.

34:54We've got more laws than the country has. And you'll see things happen in a game and the fans will be looking at each other and what happened, what happened? So we've got to do a much better job in terms of explaining that and showing what's going on. So the SGM, all the community clubs, they want more money. People always want more money. The way to get more money is let me make more money. Let me increase the revenues and hopefully increase the profits so we can increase distributions. Is that a message that they understand and accept? Yeah, I think so. But then everything in rugby is a compromise.

35:24I mean, I can't think of many topics in rugby which isn't a compromise. And if you're upset, 30 % of the people are doing pretty well. So I'll give you two classic examples. So ticket pricing at the Allianz. So we'll get a lot of pressure in terms of ticket pricing is too high. You need to reduce it by£10 a head. Well, okay, we can do that, but our revenue will drop from X to Y and that's less money for us to be able to invest into the community game and less money to invest back into the pro game. So we're looking to maximize the profit without gouging the fans. So that's always a constant source of debate.

35:57The other one is the classic free-to-air versus pay TV debate. So when the broadcast rights are up for renewal, the widespread feeling will be you've got to keep it on free-to-air. You've got to keep it on BBC and ITV because of the eyeballs and the awareness and the ability to access it. Well, you're always going to get paid a less premium for free to air than you are for pay tv so how do you get that balance right between the free to air and pay tv revenues coming in while service servicing the needs of the game it's just me and you would you like to just to sell a big deal to amazon i mean they're clearly i mean they've come in once or they've come in twice now so they've done a one-year deal and just toyed with them played it to see what happens it worked really well for them for the autumn internationals because that gets their subscribers leading into christmas So they're on the fringe at the moment in terms of making a bigger commitment to it.

36:44But can you do it differently? Can you have six nations on one medium and nations cup somewhere else because one's doing a different job to the other? Can you do that or not? Or would this amazing bumper deal come in? I mean, it happened in 2015. Sky came in. Sky were having a battle with BT and wanted to take BT out of the equation. And they came in and they paid, I think they paid 32 million for the autumn rights in 2015. Well, that was a 200 % premium. but they were doing that because of the competitive tension in the marketplace that's no longer there at the moment so that's set a different it's not but it's not but i imagine it is actually because you've actually got i'm sure netflix and amazon will be competing for this one yeah like no one else you do you just have new players i imagine new players but you've also you've also got you've also got to create the product that they want to have and you've got to actually help create that bit of competitive tension in there for what you've got you know you've got to be relevant to subscriber basis you get a lot of churn after after them soon Youth engagement is a key part of that.

37:41The ticket pricing piece is again an easy stick they use to beat you with. It's not accessible to a young game. How can you address it? As you highlighted, you don't want to drop the 200 million. How can you change that? Yeah, it's really tough because if you look at the ticketing allocation, the Allian, so 52 % of the tickets go to the clubs and that's part of the constitution of the IFU. So we supply 52 % of the tickets to the clubs. It's given to them or sold to them at a discounted price. They can use those to sell on at a premium to sponsors to encourage sponsorship. So it's a revenue generator for the clubs or they can just give them to whoever they want to give to.

38:16So we have no control over where that's going with 52%. You then got 20 % of the tickets are debentures. So there are 15 ,000 seats in the Allianz, which are debenture holders. 5 ,000 debentures average of three each. So you got 15 ,000 seats. That's 20 % of the tickets. So you're now at 72%. You've then got 15 % of the tickets go to commercial partners for their own use as part of the deals. That's built into the deals. So what are you up to now? What did I get to? 52, 72, 17, 87. 87. And then you've got 10 % goes to the visiting teams. That's 97 % of the tickets. So you've got virtually zero that you can play with in terms of we want to get a younger fan in.

38:55So we're actually now we're actually reserving more tickets back and we're having to negotiate to get them back. 52 % is extraordinary. Can't change that. That would, again, that would be seen as taking money away from the clubs and not servicing the members. And we're a membership organization. Are we not artificially, I'm sorry, I'm going to get a job again. We're not artificially keeping these clubs alive on life support with things like this. The vast majority of revenue in the community game clubs is generated by themselves. So the money that the RFU contributes is single digit. Probably about between 7-8 % of the cash and the revenue they get is from the RFU.

39:33The rest of it is through player subscriptions, bar takings, events, weddings. Clubs now are sort of open 363 days a year. You've got clubs using their car parks to do webuyanycar.com and you've got clubs who have got creches and clinics from the NHS. So they're being really creative. But again, as a membership organization, access to the stadium and those tickets is really important. What would you most like to do in terms of new monetization opportunity that you maybe can't do without upsetting people? The ceiling for digital is we don't know what it is yet. So what we can do with that, we've now got 6 million database that we can engage with directly.

40:12It was 2 million about 18 months ago, I think. or something like that. So where we can go with digital products changes the inventory we've got. So previously it was signboards around the stadium and LED signboards and all the rest of it. It's quite limited, but where we can go with digital is almost unlimited. So we've got to get really creative in terms of how we do that. The other big one for us is part of the renovation of the stadium in 27 means we're in a discussion with Richmond Council, now Richmond Borough, about the ability to stage more non-rugby events. So if you go to Tottenham...

40:42Were you not able to see this before? because I was always wondering why isn't the Swift doing Twickenham? So a number of things there. So at Tottenham, I think I'll get these numbers wrong, but at Tottenham, I think it's 30 non-football events they can have there. And there's no restriction on the number of days consecutively. And I don't think there's any restriction on capacity. At Wembley, it's 35. For us, it's three. And we're only allowed one on a Friday. So we've had the Rolling Stones and we could have had Beyonce, but she wanted three nights and we're only allowed two nights consecutively and we've got a restriction on capacity of 55 ,000.

41:18So we're having a conversation now with Richmond Borough saying, look, if we're going to invest 600 million into the Allianz and that's going to bring X amount of revenue, we've got the study to show how much economic value it contributes to the borough. If we're going to do that, you're going to have to work with us in terms of an increase in the number of events that we can stage in order to monetize the stadium. If we're going to invest that money and there's plenty of places that would love to have us there. Birmingham, Milton Keynes would love to have us there. If they weren't willing to move from three, would you move?

41:48It would be a tough call for us. It would be very difficult. You couldn't, I don't know how we would justify the investment in the stadium if we can't get the increase in the event licenses. What is the investment in the stadium? So we've said it could be up to as much as 650 million. Now you might stage that. The East stand was done relatively recently. So very light touch on that seating. Yeah. But the basic structure there no the rest of the the framework of the stadium would remain the same but what you do in the inside of that and the on the outside and the sleeve will be very different and you could stage it so you don't have to cancel matches which is what we did with uh the east end i don't know if you've seen the new manu redesign yeah yeah and i mean it's like the largest indoor complex ever norman foster said and actually what it just goes to exemplify to me it's mainly the need for extra curricular activities to sustain a football club yeah it's astonishing it's just make so much more money.

42:40Well, you've really got to make it sweat. And the bar, the long bar, is going to be one foot longer than the one at Tottenham. So we'll have the longest bar in the country. One foot longer. Really? Yeah, until many nights you come along and make it one foot longer. So, yeah. The same kind of conversation topic of more revenue opportunities, but it links back to what we were talking about with media and rights. And it's the kind of celebritization of players and individuals. And, you know, now media and broadcast deals are being done based on the star players involved as much as they are just the kind of global audience.

43:15Rugby is something that really lacks a lot of those global stars in the sport. How do you, with the England team, using those as the players, should we say, under your control, how do you look at creating stars to really drive the value of rugby? I think we've got a partner up there with the premiership clubs as well. So go back to the brand development analogy. So if we're going to take, let's take one, take Marcus, you know, for one of anybody it could be. So if you're going to create a brand around Marcus and you're going to create an icon around Marcus, then it's got to be a joined up effort between the club and the country in terms of how he's showing up, what the message is, how he's positioned, who he's appealing to.

43:50And we haven't done that previously. So I think we need to do that. I think we've also got to think differently in terms of how we implement that compared to football. I don't know if you saw the Marcus episode on Netflix. I think they got that slightly wrong. I think they started off with Marcus buying a car and it felt like football. It just felt like a bit too much bling. Whereas if you look at Marcus's background at Brighton and what he does at Quinn's and what he does in the community game or what he does elsewhere, I think the story in rugby is subtly different. So you can still have icons, but the way you portray them, I think, has to be different to football.

44:25And there's been a concern in the past about rugby as a team game. So you can't have individual stars. Well, look at Alona Mayer. I mean, she's blown that completely out of the water with her social media profile and what she does. So we've got to work much harder with that in terms of creating those icons that kids can aspire to. I think we're all aware of that, all conscious of that. How much is the relationship between the Premiership Clubs and the RFU then aligned there? The relationship with the Premiership and the Clubs is, I mean, I've only been there coming up to six years now, but I'm told it's the best it's ever been.

44:55So we had a really good relationship. What we did with this last agreement, which was signed in June of last year, is convert a good relationship into a proper strategic partnership with skin in the game. so we've now got a joint marketing agreement so we work together on the promotion of the premiership final so the premiership final last year the Allianz was full, 82 ,000 I think it's the first time it's happened and it'll probably be full this year as well so we've got to work together around the assets we have and jointly promote them and frankly previously we might even be in competition we'll be investing in an event on our side of the road and they'll be investing in an event on their side of the road differently and that's part of the agreement it's part of the agreement in terms of how do we consciously put plans in place to do that develop those assets jointly we mentioned that like actually moving from say three to whatever the number is and what that would do to a balance sheet amazing another thing is accepting investment and private equity how do we think about the private equitization if that's a word of rugby we've obviously seen it more and more become a prominent part of the game yeah how do we think about that yeah we we feel good about the deal that we did in the six nations and for those that don't know the deal was so we created a new co which aggregated all of our respective broadcast rights and we put some central commercial sponsorship rights into that so we created new co cbc came in as a seventh partner so we each had 14.3 percent of that of that new co that was valued and all of the unions had different valuations based on the value of their assets so we we got over 30 percent of that so we received 95 million in exchange for giving up that 14.3 % share to CVC.

46:33If you look at that revenue profile I gave you earlier in terms of the revenue streams coming for that, our broadcast rights with a little bit of sponsorship rights equated to about 4.7 % of our revenue total. So we've got 95 million in exchange for 4.5 % of our revenue. Now, we haven't spent any of that money on COVID recovery. We haven't spent any of that money on bridging losses or anything to do with that. All of that money has been reserved and ring fenced for investment into the game. So a chunk of that has gone and is going to digital. So if we hadn't had that CVC deal in place, we wouldn't have been able to invest in digital and we would probably wouldn't have got the Allianz deal and would certainly not have got the Apple deal.

47:13Wow. So that's already paying. Why would you have not got the Allianz or Apple deal? We wouldn't have had the money to invest in on the digital side. We just wouldn't have had it. If we didn't have that CVC money in place and where we were going through COVID with the losses through COVID, we'd be struggling to find the funds to pay for the community, game as well and be able to invest. And that's the difference between the 34 million underlying loss in 24 and the 40, whatever figure it was, 44 I think was reported. That 10 million was money that we got from CVC that were investing back into the game.

47:44Was there a difference in what you could spend the money on from the Six Nations CVC investment and when it's Premiership Rugby? Because when we've had the conversations around Premiership Rugby clubs, a lot of these people have said, well, we actually had to use that money to sustain ourselves during that period. It wasn't used on exactly as you said, creating innovative products and solutions to allow future growth. Yeah. The premiership, I mean, it was awful timing for the premiership. So they did their deal, which is slightly before ours. So it was 200 million for 27 % of the central distribution.

48:14And then COVID hit. The premiership were encouraged to carry on playing, to provide a service to fans and whatever during COVID. So you're incurring all of those costs. You don't have your match day revenue, which theirs is probably similar to ours around the 50 % level. So they made a lot of losses through COVID. They also took out government loans in order to help them bridge that gap. Well, now they've got 27 % less revenue and they've got to repay the government loans. So that's why we're working together with them in terms of jointly, how do we exit that situation? So for them, that private equity deal, it was unlucky because all that money was used to survive through COVID and not invest into infrastructure or innovation or marketing, which is what the intention was.

48:56But if they hadn't had that deal, they would have gone bust, period. Well, yeah. So that's that. Yeah. We talk about this. It's a common topic of how do we make the domestic game as successful as the international game? How can you influence that as the RFU? Yeah, definitely. I think it goes back to those things we were saying about joint use of assets. I mean, the attendances in the premiership, I think, are up about 17 % this year so far. So the product on the field is resonating. Are there things we can do jointly around broadcast rights? Can you aggregate on broadcast rights with club and international and do that?

49:26Easier said than done, but there are areas there. How do we make sure the calendar is organized so you're not having too many conflicts between the international game and the domestic game? So it's simpler for the fans. There's a number of things going on. And we're committed to restoring and making sure that domestic game is sustainable and profitable going forward. How would you align the calendar to be more effective than it is right now? I think there are blocks where you just, you have different competition formats in those blocks and you reserve certain matches for key matches for the premiership in terms of title winning.

50:00The international windows are pretty fixed in terms of Six Nations and Autumns, but there are ways I think we can work around that around the calendar. Well, again, came back to losing players. I guess, and the ownership of, you know, whether it's team. And this was something that Ben Kaiser talked about that I found interesting. I didn't know. And it was, I think he said that English players were paid the most to compete for England than any other team. And I think it was around 25 ,000 a game. But then also last year, you started bringing in, I think, correct me with the right terminology, but it was like a centralized contract, more like what they have in cricket, which I think was about 160 ,000 a year.

50:32So, you know, it was a fixed amount rather than dependent on how many games you played. I'm curious to understand why that was brought in. And also, did that remove control away from the clubs who have the players and put a little bit more in the RFU? Yeah, a little bit. So we've won four Six Nations championships in 22 years. That's not acceptable for England when you think about the size of the rugby playing, the resources and so on. And there are reasons for that. I mean, there's very clear reasons for that. I mean, coming again from an Olympic background, Atlanta Olympics 1996, one gold medal, 15 medals, 37th in the table.

51:07Unacceptable. country. We got pretty upset about that. And then you saw a new performance system put in place. You had lottery funding came in to subsidize it. And then the outcome of that was initially Beijing in 2008. And then you saw the amazing London performance. And then you saw Tokyo, which was outstanding. But that's all down to the system. And you look at the strength of Ireland now and you look at the historical strength of New Zealand. Well, that's down to the system. In Ireland, they've got a centralized system, four provinces. The Irish Rugby Union pays for all the professional players.

51:37They have total central contracts and control over the national players. We can't go to that model, but we've got to have a model which enables those elite players to perform better when they need to perform better. It needs to be uniquely English. Why can't you go to that? With the club structure that we've got, it's very difficult and we've got a lot more players. So I don't think we can afford to pay all those players. So the program you just mentioned there It's the enhanced EPS. Steve has the ability to pick 25 players and he will guarantee their remuneration. He'll guarantee their fees for a year or it might be a three-year contract.

52:12In exchange for those guarantees, and the club gets some benefit as well, he has total oversight over their medical aspects. So when to have an operation, if required, strength and conditioning regimes. Each of those players will have their own individual development program in terms of these areas, Steve and his coaching team and his S &C coaches think that player needs to go to to compete at the international level. Head coach has never had that before. So he now has the ability to do that. How do you get that through the clubs? It's not a bit like turkeys for Christmas. The challenge for clubs is that they often lose their best players, the players that people want to come and watch when it goes to England, and that damages their ability to operate as a high-performing team.

52:52They're now losing even more control. How did you get that past the clubs? Did that cause massive friction? Yeah, but I think there's a recognition now If you've got a very successful national team, that creates a lot of positive energy and creates a lot of positive awareness. You tend to see in the premiership, immediately after an international fixture, the attendances in the premiership are up. You look at the situation in France. I mean, France were a basket case up until about, where are we going to be, seven years ago. I mean, they weren't winning titles. They weren't well organized. And then they won the World Cup.

53:25And they have a similar structure to us. France and England are probably the most closest in terms of structure with top 14 and we've got the premiership. You've got FFR and you've got RFU. They came together voluntarily and said, it's really important to have a powerful French team for the 23 World Cup. So they changed the access to the players. They changed the ability for the French national team to control and have access and oversight in terms of what those players were. And they developed that team. They also invested in the pathway, and I can come onto that in our perspective in a second.

53:52And that resulted in the team you see today, really strong team. You could argue a little bit unlucky in the World Cup, could have gone further. But it was that World Cup that galvanized the desire and intent and actually the reality to bring it all together. FFR versus RFU, which one would you say is in a more healthy state? We are. Yeah, financially, no question. 100 % we are in a better financial state. I think in terms of where the game is at the moment, they are better than us. So in terms of the popularity of the sport in France at the moment, they're better than us. They don't have the overwhelming presence of football.

54:27So if you go around the heartlands of rugby in France, you don't see any football. It doesn't exist. They've got a very large broadcast deal. They've got 135 million euros a year broadcast. The BT deal, the TNT deal is 35 million, I think it is, per pound. So it's a much bigger broadcast deal. Backed on the strength of how the national teams performed recently. The attention economy, as we call it, it's still now. I wasn't going to go there, but it's like, if you think about consumer attentions as a wallet, and your share of wallet is everything, when you have everything that we have today, I just don't think there's the same interest.

55:01And that's why you've got to be really on your game and making sure you're innovating and making sure you're competing with other sports. I mean, look at UFC. Unbelievable. Yeah, all the fior around head injury and concussion. And we're a contact sport. You've got to make sure you've got the right processes and mechanisms in place to make a contact sport as safe as possible. You get this thing with UFC out there, which is going crazy. Do you fear innovation in the game when it comes down to structures? We've had a lot about franchise leagues and people looking to come in and tear it up and live golf it up and big fees and roadshows and all of this.

55:36Does that concern you? I don't think you should ever be complacent. I mean, when you hear about franchise leagues or you hear about global leagues and whatever, I think there's a real potential for that concept. If you look at how it's packaged and what it's supposed to be, you can see, yeah, I can understand that. The challenge you have in rugby is, and again, it's another compromise situation. It's not like cricket. In cricket, you can play 300 days a year. In rugby, the best players can only play 30 matches a year because of the physicality of the game. So we can't go out and create 100 the way cricket's done.

56:07So you've got that limited bank of games of the best players. And the challenge we always face is, how do you drive more value out of the same volume or even less volume that's the challenge we've got and and those players give back to the rest of the the game so going back to what we said before at the top of the pyramid you've got your professional game that's generating the money that has to be then taken invested into the community so if you lose them how do you then how do you fund your community game it's a real challenge bringing all of this together are you positive Are you confident about the position of rugby and your role as chief exec going forward in helping deliver progress to the sport?

56:44I would say we've got to do more. I think we've got to get a lot sharper. We've got to really understand what we have to do to compete to get that attention share that you mentioned there. That's one of the reasons why we did the Nations Cup. Do you feel you're equipped? I'm so sorry to interrupt you, but digital transformation, it's kind of like a corporate buzzword. I don't think most of the people talking about digital transformation from a corporate sense are actually equipped for digital transformation. Do you feel that you're ready and you have the money? This is intensely expensive. Yeah.

57:16I saw a presentation the other day from a guy called David Jones. I don't know if you've come across David Jones. He works with Nike. He works with Microsoft. I can't remember the list of them. But he specializes in AI. And he gave a presentation to the top Google salespeople in Europe. And it was at the Aviva Stadium. And we were there for a different meeting. So you can just wander along and listen to it. unbelievable presentation. He specializes in AI. And the ability to create a campaign in a week, which previously would have taken six months to do, and the cost being a fraction of what it used to take, he's probably going to obliterate advertising agencies in the way he's going.

57:52Now, if you partner up with somebody like that and you say, right, this is our product, this is the target, or don't even define the target, where can you take this product if you have completely free reign, then where could you go? And I think sometimes it's nice to be where you are if everyone else is here because it gives you the ability to actually create into that gap and maybe surpass so i think we can do a lot of rugby is an amazing sport when you think about the gladiatorial nature of it the physical contact of it the momentum in the game the speed the difference in body types all of that sort of stuff and 82 000 people at the allianz and you know the values of rugby in terms of what that means as well i think i think it's up to us to convert that into real growth and so it's about intelligent use of technology to reduce spent yeah yeah and and yeah and why not why not be at the forefront of that totally agree should we do a quick fire let's do it we start we've gone through all this what's the hardest part of your job the hardest part sitting in the stadium during a match hating it really i hate it absolutely hate it because you know what's what you know what's running on the back of of the outcome and and you know the coaching team and you know what they've put in and you know what the players have put in and you know that if you don't play well or you know if there's a bad result you know the aftermath and the impact that has so it's about winning if you're playing in a community club and you start off playing rugby you go out there to win matches which sponsor would you most like to have that you don't have tabasco unlimited supplies of tabasco that'd be amazing what do you not spend money on now that you would most like to we spend more on the community game than any other union.

59:31So that third that we spend on there and the 30 million that represents is by a long way more. I'd like us to be able to spend more. Really? Yeah, because I think, yeah, how can we, schools, for example, is one that we're hearing a lot on the roadshows. How do you get into schools? That takes investment to have people going, you're not going to get rugby played more in the PE curriculum in schools. It's too difficult, it's too hard, it's easy for a PE teacher or a headmaster to say, that's a difficult one, let's just do basketball, simple. so to get rugby awareness in schools you've got to have people going in so the ability to invest in that because that's your bottom of your pipeline so i think that in those areas i think that's where we want to invest which sport has got it most right and what can rugby learn i'm really impressed what what i shouldn't say this because you know it's it's i'd get banned i suppose but i think rugby league in australia why i think they have they have created an entertainment product around a similar game to ours but there's less stops and starts so the ball is in play for a much higher period.

1:00:28Ball in play for us is about 34-35%. Ball in play in rugby league is I think it's 80-something. So they've created an entertainment product around rugby which is full on from start whistle, end whistle. And also the way they've packaged it, you just watch the promotion of it, the colour, the noise, the use of the athletes. I think they've done a really good job and you can see that in terms of the growth of rugby league down there. You mentioned the rules earlier. My question was going to be if there was one rule change that you could make to the game, what would it be? Do you think the speed of the game is the issue?

1:01:02Is that the heart of it, which we've got to fix? Yeah, it is. But then there's a contradiction to that. So you look at NFL. I mean, look at the number of breaks. But what they do do is they say, right, so the on-field bit is this percentage, but in the gaps, we're just going to pack that with content. So we know what our gaps are. So pack our gaps with content. we should have like Gatorade adverts yeah why not why not why not to not adverts no again we get back to data you know in the in the gaps or in the gaps of the game or the resetting of a scrum you know have an expert panel on there explaining what's going to happen in the scrum or something it was good though I was at the big game in the spring when it was Harlequin's Little Hampton yeah and it was an entertainment event yeah and Quinns and Laurie in particular have done a brilliant job to establish that in the calendar yeah so you know now people are now talking about oh am I going to see you at the big game event because it's in the calendar marked in, the date's crossed off.

1:01:55That's fixed. And then you've got people going there. They're not just going there for the rugby. They're going for the fact that they know what they're going to get. Okay, to finish it off then, what are you most excited about? I'm really comfortable with our financial situation. So I think we've got the financial stability and we haven't gone into the detail of previous cycles nor would we want to. But this is the first clean cycle going forward. I think we're going to have real sort of financial stability to do the things we want to do. One of the things that shocked me when I came into the RFE in May 2019 team, and again compared to the Olympic experience, is we demolished and eliminated the performance pathways.

1:02:28So we got rid of some great young coaches. Bernd Shaw and Fletcher had gone. We had no under 18 specialist coaches, no under 20 specialist coaches. We had no A team. So therefore you then lack the ability to take a group of players and take them on the journey from 18 to 20 to A to senior men's. Because we probably know now out of the A teams players which four or five will play for England. So it's how you take them on that journey. and we'd completely obliterated that performance pathway. And it goes back to the high performance systems we were talking about before. So my first recruit was a guy called Conor O'Shea.

1:02:59He came in in January of 2020. Conor's bread and butter is building performance pathways. So we reinvested in specialist coaches, rebuilt the whole pathway. We thought we'd win the under-20s Junior World Cup this year. We won it last year. The current under-20s go to Wales this weekend. Hopefully, they'll clinch the grand slam and they were unbeaten last year as well and the current under 20s are better than the ones that have just passed and the under 18s behind them are stronger again than the under 20s we think that's a real generational crop of players and you're seeing some of those players coming into the team now so pollock gets his debut this this weekend you've got asher who's on the fringes you've got afo who's injured can't play you've got max ajomo's coming into the team we've got some really great talent coming into the england team i think for the next 10 years, you're going to see some really strong English performances.

1:03:50And we've got a pipeline in place to be able to deliver that. And that will start to match, hopefully, the performances of the women's. And we've got the Women's World Cup this year as well. So I think that performance bit to get rid of the, we've only won four Six Nations in 22 years, hopefully in the next 10 years, we'll be able to say we won 40 % of them or 50 % of them. Bill, this has been such a joy to do. I've loved having you on the show. We've loved this. Thank you so much for joining us today. I enjoyed it. Thanks. So, now you can make your own minds up on how you think Bill and the wider organisation is performing.

1:04:22As we mentioned at the start, Harry and I were surprised at much of it, in a good way. That doesn't detract from the losses and the deficiencies in essential communication to handle highly sensitive topics, but the union generating over£200 million a year and funding all aspects of the game in this country is doing something right. It's now about how to optimise that and continue to improve the sport at both the community and the professional level. We're very grateful to Bill and the RFU for joining us for this excellent chat, and we hope you enjoyed it too. Now, if you want to hear more from today's show, you can do so by going to YouTube and typing in Business of Sport.

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