Chairman Buttress: Rodney Parade regeneration crucial for the future of the Dragons

Newport RFC’s historic ground was bought by the Welsh Rugby Union in May as part of a deal that saw the governing body take over the Dragons.

Buttress was appointed as the region's chairman in September and knows that a decision on what to do with the northern end of the nine-acre site, which includes the now disused clubhouse and the ‘cabbage patch’, is crucial.

The entrepreneur and his fellow Dragons board members will hold talks with various parties, including Newport city council, and weigh up the options but any development is highly unlikely to be housing.

“My aspiration is for us to be the most competitive Welsh region in five years. That’s the ambition and there’s no point in doing anything unless you want to be best at what you do,” said Buttress.

“The question then becomes how you do it and all the regions have different strengths and weaknesses, in terms of board structures, their assets, their playing squads, their local playing resources.

“One of the strengths we happen to have as an operation is the top end, which is clearly underdeveloped and has some buildings that need redeveloping.

“That is going to be critical to get right as a board because I believe there is several million pounds-worth of revenue opportunity that lies within that.

“There is two things to caveat that with. One is that we have made no decisions yet, we have been here as a board for maybe 70 or 80 days, so we are going to do a full review of all the opportunities.

“The second thing to add is that we have major stakeholders in that – Newport council, the Welsh government, local residents, our supporters clubs.

“We’ve got a big responsibility as a board to have a consultation that will go on for quite some time about what that looks like in terms of the development.

“Will this site look very different in five years? I would hope so because otherwise something has gone very badly wrong with the management and running of this operation.”

Buttress believes the regeneration of Rodney Parade would boost the Dragons coffers and marry up nicely with Friars Walk on the opposite side of the Usk.

He said: “I was here on Friday night and as a businessman walking into a facility at 5pm in the centre of Newport it was really depressing when all the lights were out and it was cold, dark but yet all I could see over the river was restaurants lit up, bars and people filling them up.

“To see that lack of revenue generation that could be directly going into creating a very competitive team on the pitch [was depressing].

“It’s one of the big opportunities in front of the board over the next 12 to 18 months. It’s not going to be easy to do because there will be planning, we need to create some kind of Exeter, Saracens, Wasps-like environment around Rodney Parade that is generating money every day of the week.

“It’s a great opportunity for us and as a board we have to be really clear about what the business plan is to generate the millions of pounds of additional salary budget that we are going to need to become the most competitive region in Wales.

“It will come from decisions like that and getting them right, because if we get them wrong we won’t be competitive.

“It’s very, very unlikely it will ever be residential. It needs to be things that add to the community and are relevant to the city council and relevant to us commercially.

“If we sold the land off to build houses I would submit that’s a one-off thing and would not be a smart decision.”

FULL Q&A WITH THE DRAGONS CHAIRMAN…

Q: How important can the Ross Moriarty signing be for the Dragons?

A: It’s only important if we back it up and when I say back it up, you don’t build a team and a region with one player. That wouldn’t be fair on the player or the rest of the squad.

We need to, as a commercial business and as a squad, make sure we continue to grow and invest in order to strengthen our position.

Is it exciting that Ross is coming? Of course, but it’s done, let’s move on and there’s lots to do and we need to keep going.

There’s no secret that we are behind, and the Dragons’ intention is not to stay behind. We need to do a lot of hard work to catch up with the other regions and this is just one step along the way.

Q: How is the Moriarty deal being financed?

A: It’s not complicated. It’s like any professional club’s finances – we have a budget. Our playing budget last year was £3.5million, it hasn’t changed.

Next year it is going up slightly, driven by two constituent parts, one is the additional broadcast revenues from the South Africans joining the Guinness PRO14 and the other is from some commercial deals that we’ve been able to do that has enabled us to invest more that £500,000 more on the playing budget going into next season.

It’s come from our player salary budget the same as it would for any other region. It’s as simple and as clear as that.

That being said, we’ve got a lot more work to do [on the playing budget] we are a long way behind the other regions.

Am I satisfied with where we currently are and where we are going to be able to get next year? Absolutely not. We need to do a lot of hard work off the pitch because we have to generate the money.

There is no magic money tree to coin a general election phrase. This is driven by hard work and execution by the commercial team at Rodney Parade, we will have to generate every pound of every extra salary budget either through investments, sponsorship or commercial revenue which we will then invest straight into the playing budget to become more competitive.

Q: Why a Dragons deal rather than a national dual contract with the WRU?

A: Let me make it crystal clear, if a company is owned with shareholders, in our case majority owned by the Welsh Rugby Union, we have an obligation to those shareholders.

That said, the club is run by the board of directors – two of which are from the WRU (Steve Phillips and Ian Jeffery) and two of which are independent (Buttress and David Reynolds) – then all our squad decisions are made by Bernard Jackman.

That’s no different to the last 20 years of my business life where as a public company I had many, many shareholders that owned Just Eat. They didn’t run Just Eat, myself and the management team ran Just Eat.

I see a lot of misinformed comment around ownership, which does not mean operational management.

It’s very different and I would add that that’s a very positive thing for Welsh rugby because the last thing the WRU should be doing is running any region. It’s good for them to have a stake, and I can see the benefit here of the WRU.

Let’s be blunt without them this region would not exist. Congratulations to them for allowing the region to have a second chance, but in terms of how the region is managed and operated, it’s the board’s job to operate the company on a day to day basis.

In that sense it’s the same as any other organisation regionally, it’s just that our [major] shareholder happens to be the WRU.

What would be great is that we can show this can be a really successful model. That would mean two things, that we’ve been successful and then for Welsh rugby I think of how things were when you had three regions and a sick, weak one.

That’s not good for any industry and that’s not the case anymore. That’s a good thing because supporters, sponsors and players want to see competitive, high quality interactions on the pitch.

You don’t get that when you have a weak participant, which we have been historically.

People talk about transparency, I think if anything the Dragons is currently the most transparent region in Wales given the level of scrutiny.

We are trying to engage with stakeholders, whether it social media or other ways. We will continue to do that because there is nothing to hide here, we are saying exactly what we are doing.

Q: With the signing of Moriarty are the Dragons within the playing budget and is there room for other notable signings?

A: I spent 20 years running businesses and I never missed a budget. I don’t intend to come to the Dragons and start missing budgets and numbers, that’s not good business and I would be pretty hard on myself if that was the case.

It’s our job to deliver the budget, it’s all manageable and we have an obligation and a responsibility to the majority shareholder, in this case the WRU, as a board to deliver the budget.

In terms of any players, that’s a question for Bernard. I love rugby but I wouldn’t delude myself to be an expert in who we should be recruiting.

My job is to get Bernard the money to then get the players that he wants.

Q: How involved are you day to day and financially?

A: I have invested my own money – I’ve said before that it’s a low six-figure amount.

The biggest thing that I am investing frankly is my time and energy because, as anyone will tell you at any other region, there is a ton to do, probably more than I anticipated but I am really enjoying it, it’s a fantastic opportunity.

Yes, I’ve put some money but I should add that we are open to investment and the door is not closed if people would like to invest, come and join our board and bring the necessary skills.

Q: If the Dragons did make a loss, who would pick up the bill?

A: If you miss a number in a business you have three ways to get it back – you cut costs, investors put more money in or you go and find investment to bridge the gap.

If that happens we can manage it because we can do one of those three, and I’ve done all three in the last decade of running companies.

I probably prefer the last one rather than the first one but if you have to do it, you have to do it.

Q: Is it speculative with Moriarty knowing that you can get in extra commercial revenue or is it already budgeted?

A: Ross is fully funded out of next year’s budget but I think we can drive additional revenues. It’s not predicated on any additional growth or revenue.

What I’d also add is that because of the Regional Services Agreement, we can’t get any further investment from our major shareholder unless the other regions got the same.

Going back to the money tree, that option is constrained by the fact that any investment the Dragons did receive, the Scarlets, Ospreys and Cardiff Blues would get the same.

Q: How will big signings like Moriarty be commercially?

A: It attracts other talented players and by doing that it creates a network effect of success. Talented people want to be with talented people.

If we can bring in talented players that drives more success, which drives more sponsorship, which drives more commercial engagement, which drives more supporters, which drives more hospitality.

All of a sudden you get a flywheel effect of high performance. That’s what we are trying to create but we can only do it constrained by our existing budget.

Will it be easy? No, and nobody should think that other regions are not trying to do this. We are going to have to be better at doing it, or frankly it will be challenging.

Q: Where does the money go from events at Rodney Parade now that the WRU own the site?

A: The ground and the Dragons entity has one major shareholder, the WRU, and me as a small minority.

Any revenues generated from Rodney Parade and our activities go into our budget and our P&L (profit and loss) as a business at the Dragons.

We have all the revenues from Rodney Parade – ticket sales, shirt sales, if anyone rents a box for the day like the NHS today. All that comes into our P&L and then we have the costs such as salaries, electricity and running the ground on a day.

Hopefully there is positive and that enables us to put that into the playing budget.

The way this business is run is an independent entity. Yes, the major shareholder is the WRU but as a public company at Just Eat I had many shareholders and if I generated money from an Indian curry it didn’t go directly to our shareholder, it went in our P&L and hopefully after the costs there was a profit that we gave back to shareholders.

Q: Have you made any cost cuttings so far?

A: That’s not my objective and, although I don’t know what the other regions have, I would say that we are one of the leanest from a resource perspective.

If anything I’d like to reallocate some of the existing budget into areas that I think are more valuable to bring in money but we are pretty lean, frankly.

When I did the due diligence I was surprised at how well run the operation was given how little resources we have.

Q: How important will a new commercial chief be?

A: That will be a big job with a big responsibility and with that will come a big target to generate money, I can tell you that.

If you go and ask the guys that used to work with me I have very high expectations of commercial people, they should generate a significant amount of money more than they cost. A significant amount otherwise there is no point having them.

That person will come in with a very clear budget about how much we expect them to generate for our club.

Being blunt, this club has been run poorly commercially. I would be disappointed if in a year we haven’t improved the commercial revenue.

I can see for next year we will do better than last year and there is some stuff we can do from being razor sharp at what we do versus where we were historically.

Q: Are you leaning on your contacts from past business?

A: I guess that’s part of the reason the WRU thought that I might be a useful guy. People can say no but I am pleased that people like David Reynolds, who I have known for a long time, has come on to our board because he is a very smart man with good contacts.

I’ve met with Nando’s and businesses like that, and there are people we will speak to.