Reds were trapped in cash black hole - minister

The States has previously said it would not be financially responsible to keep funding the team

Jersey's rugby union club was trapped in a "financial black hole" before it shut down last week, a deputy says.

Deputy Kirsten Morel, minister for economic development, tourism, sport and culture, told the States Jersey Reds had consistently failed to live within their means.

The States is to vote on whether to bail out the financially stricken club.

Deputy Lyndon Farnham has called on the government to continue subsidising it so it can finish the season.

However, Mr Morel highlighted the fact the club hired a new coach in September despite knowing it could not afford to.

Reds ceased trading on Wednesday last week and said they were unable to pay players and staff salaries - despite receiving £370,000 in short-term grants.

The club's game against Ealing Trailfinders on Friday has been cancelled.

'Consistently overspent'

The Jersey government has previously refused to keep funding the club, saying it would not be financially responsible to do so.

Mr Morel said the government tried to offer Reds a "lifeline" through the grants, but the club had failed to help itself by cutting costs.

He said: "In colloquial terms, I would liken the Reds finances to a financial ‘black hole'.

"Despite knowing about their financial problems, the Reds had consistently overspent and drawn down investors' money at a much faster rate than expected."

He said he believed the decision to hire a new member of coaching staff in September was questionable.

Jersey Reds ceased trading last week due to financial problems

"I believe it knew at the point of hiring that it did not have the funds to pay salaries," Mr Morel said.

The government also released a letter from Deputy Lucy Stephenson, dated 26 January, 2023, informing a club official she was "minded not" to support a request for emergency funding.

The assistant minister for sport said she needed to be "even-handed in my approach to the development of all sports in Jersey".

'Islanders very proud'

Mr Farnham, who proposed the vote, said islanders were very proud of the Championship-holders.

He said it was one of the island's "greatest sporting success stories" that has "progressed from effectively playing park rugby to becoming the best national side outside of the RFU Premiership".

But he said he did not know how much the States would have to spend.

A review by Santander estimated the government would need to provide £590,000 in subsidies in 2023 for the club to stay afloat.

Mr Farnham said: "We can save the club, but we've only got this week to do it, and if we don't do it, then we lose professional rugby, we lose that return, we lose the Jersey rugby club, and it takes us back probably two decades in the development of rugby.

"That's concerning, not only for the economy, but for young people, our young sportsmen and women who love rugby and want a future in it."

Santander's review said the RFU (Rugby Football Union) and other government funding had reduced by £600,000 per season since 2020, but combined player and coach spend had increased by 33% because of inflation.

Despite this, the report said Reds remain in the middle of the pack among Championship clubs on player spend.

It estimated the value of Reds to the island economy to be between £3m and £6m per year.

'Blank cheque'

Mr Morel said Mr Farnham's proposal would "grant a blank cheque to the Jersey Reds" for the rest of the season.

He said the Reds were a private business "with a long history of financial problems".

The Reform Jersey party has called for "safeguards" on any additional funding "to make sure we aren't throwing good money after bad".

It proposed an amendment to Mr Farnham's proposal that would force Reds to provide a business case on the benefits of the club to the island.

No vote took place on Tuesday, with the debate due to continue at 9:30 BST on Wednesday.