Below is a summary of the discussion.
On Monday afternoon, Shane and I met with Brian McGuigan and Matt Gidley at the Knights offices. It was appreciated that Matt Gidley joined us, to add further detail to the discussion points.
We started with a review by Matt and Brian as to the history of the club when they took over, the formulation of the board and the establishment of various sub committees within the board structure.
The previous financial situation is well understood and it seems through the effort of the management and board, they have managed a multi-million dollar turnaround in the clubs finances and while they didn’t confirm anything, it would be my belief that the sizeable improvement in the finances won’t deliver us a break even this year, perhaps if we continue on the same trajectory, we might move into that area in 2016.
We asked how the turnaround was achieved; revenue growth or cost reductions and Matt confirmed it was a combination of both. We discussed further the impact of resource reductions and how cuts could be managed in the short term but it ultimately weakens a capability. Matt indicated that the head count in the football dept. remained unchanged but the budget had been trimmed. They accepted that a lower performance may be an undesired outcome but they felt that as soon as the finances improved, they could pump more money in.
They spoke at length about the need to get the right corporate governance in place and work on the finances as their first priority and it’s the main thing they have worked on since the change in ownership. They also acknowledged that it was now time to adjust their focus.
Additionally they indicated that the NRL had offered them complete autonomy and they were being allowed to run the club as they saw fit.
Pleasingly, Brian indicated that whilst their initial focus was almost exclusively on getting the money right in the early days of the ownership change, their focus was now turning to club performance beyond the financial realm and certainly toward on field performance.
We then moved onto a wide variety of topics, details of which are below.
They may not be listed in the order in which we discussed them.
Accountability – They do feel like there is accountability within the club, with metrics in place across the various departments. We did speak about on field performance and certainly we got the distinct impression that there was a level of frustration about the on field performance and they understand that the future success of the club is closely tied to the results on the field. Matt was very honest about watching the team play currently.
They didn’t however give us a lot of detail on the type of metrics they track. Matt indicated that key measures will be communicated when they share their plan but will, among others, encompass: Football specific objectives, infrastructure development projects, revenue growth targets in key commercial areas, community engagement measures, stakeholder satisfaction ratings, people development, governance & best practice/ excellence.
We made the point that we felt that the players and the coach sometimes didn’t seem to hurt after a loss and we were assured that the coach did hurt after a loss but wasn’t the type to show it. We also acknowledged a change in tone during the last couple of press conferences of the coach which we felt showed that they were getting the message on the need to be a little more candid. Matt Gidley indicated that everyone in the club was feeling the situation and he said it was unacceptable to be putting in performances like the Canberra game.
Vision – We spoke about this and the need for the board and club to define a vision, articulate it and then execute. We highlighted the fact that this was the one thing that shone through from the Tinkler times, that the fans crave a vision. At that point Matt Gidley showed us a copy of their soon to be completed strategic plan called “The Newcastle Way”.
Whilst we only saw a draft and it’s yet to be signed off by the board it does identify a series of areas of focus for on and off field performance and the pillars on which to base the development of strategy in each area and nominates metrics and measurements to be tracked to confirm improvement in each area. This was a very pleasing development and is exactly what our group has wanted to see.
Brian and Matt indicated that they had been working on the plan for some time and we reiterated that they would really benefit from over communicating on issues like this so that the supporters truly know what’s going on.
It seems likely that the strategy will be launched publicly on or around the 17th of July, so whilst the devil is always in the detail and the greatest strategies aren’t much good if poorly executed, we were pleased to see that the club has taken an important step forward and we look forward to better understanding the detail.
Club culture – we spoke about this and we made the points that our group all agreed on so there is little point repeating them here. Brian and Matt spoke about working to improve the culture, making sure the players understood their responsibilities on and off the field and ensuring the playing group lived up to the culture and legacy of the club. Whilst they didn’t say it, I got the distinct impression there was more work to do and Matt in particularly seemed disappointed at the situation.
They indicated that new recruits would be selected on their ability to contribute to the culture and for “fit”. They felt it wasn’t appropriate to specifically name individuals but wanted the members and supporters to know that they value character more than talent. They felt this was important if we are committed to developing and maintaining the right culture we require within the Club.
Survey - we raised the query about the clubs research, seems it was actually conducted by the NRL to validate or disprove a series of assumptions they had. Matt indicated that there was a 2000+ sample size which encompassed members, supporters, sponsors, stadium attendees (other clubs supporters) and even opposition fans in Parramatta. There was a discussion about the types of methodology used and the potential biases within surveys and selecting respondents. We also made the point that we were not aware of any members who were canvassed.
Key outcomes from the research provided the foundations of their strategic plan and incorporate, among others, the following key principles:
- We want a Club that represents the values and character of our community
- We want a team that consists of our best local talent
- We want a team that plays/ competes with courage, passion and desire
- We want a Club that is financially secure
- We want team to have strong and genuine community engagement
Match day experience – We raised this issue and spoke about the experience of the average fan and those who bring children to the games. I asked whether there was a budget for match day entertainment and was assured there was but we expressed our concern at the lack of substance with match day entertainment. On this point we think they clearly understand that they need to make it an event each and every time there is a home game and to their credit they acknowledged that it’s not happening right now.
They do however have people working on this issue and indicated that we would be seeing improvements in 2016.
Merchandise – We highlighted, in our opinion, the lack of quality merchandise and the fact that it wasn’t “cool” for kids in particular to wear Knights guy and the lack of variety across the range. Comparisons were made with the Souths selection of gear and a discussion was held about a logo suite (a variety of different logos) and their application across different merchandise groups. We were told that work was being done in this area and we offered to provide feedback prior to launch.
They hoped the members and supporters will consider the ‘Marvel’ initiative a positive step forward in relation to the aforementioned feedback.
Big club / little club Shane asked whether they wanted to be a little club located in Newcastle or a big club with a large supporter based and trying to pull in supporters from beyond the Hunter. Matt was emphatic that they wanted to be a big club with a large geographical reach.
Strategy day – They spoke briefly about the strategy day that had been recently held. It seems that the day was about revisiting the strategic plan, they discussed football related matters and it seems the optimal future ownership structure was discussed in detail. No clear direction has been given regarding the ideal future structure; it’s still in the preliminary stages of review.
Crusade – Shane detailed the old Crusade and the use of a brass band on game days to provide an atmosphere. He also indicated how the HSG shut it down on day one of their tenure. Matt and Brian were interested and want to speak further on how to reactivate it.
Membership – We raised the issue of memberships and the limited scope of them as opposed to an AFL club or EPL, we used the example of Collingwood with 26 different types of membership. Matt Gidley said they were working on this area currently and expected to have a revised structure ready to go for 2016. This is a huge opportunity for the club.
Commitment to excellence – We had a good discussion about this aspect and we voiced our concerns regarding where the average supporter felt we stood. Matt walked us through a number of initiatives that they have in place currently.
They include:
• A tie up with the Uni of Newcastle with much of the preseason testing and training done there. Additionally they provide neurological support and testing.
• They are assembling a proposal to establish a Rugby League academy behind the stadium with the support of the NSW government and the NRL.
• They have expanded their sports science dept. with 2 PHD’s working within the group.
We asked about whether they had benchmarked their sports science dept. against best practices in the NRL and within other sports such as NBA, EPL and NFL. We were advised that they have an internal project underway to do that as they feel they have an internal competency within the group that can facilitate that.
We also asked whether there was the possibility of a sports science campus being attached to the academy project or even the stadium to better imbed best practices into the club. We were advised that they were speaking with the Uni on a variety of issues but I don’t believe we got a definitive answer. It might be an area of opportunity.
Locals – We asked the question about a possible “locals first” policy and Matt explained that they did feel that locals gave a better account of themselves generally due to their linkage to the region but there was no specific quota system in place and places in the squad needed to be merit based. We asked whether this policy was borne out by the research conducted and it seems to be the case. Matt did however go on to say that they would give juniors a fair go at making their mark in first grade but if after a while it just wasn’t going to work out then ultimately they would make the tough calls.
He also said that if they needed to add quality to the squad then they would do so as and when required. Matt indicated that ideally our squad will be built with the majority of the team consisting of our best locally developed talent complemented with quality/ marquee players that fill a gap in skill set required for the team to function at capacity that cannot currently be filled from players within our development pathways/teams i.e. Trent Hodkinson.
Cap management - We asked whether the club was at the cap and they confirmed it was. We asked about the relative quality of rosters compared to ours. They indicated that it was difficult in the NRL because the impact of 3rd party agreements was significant.
Matt acknowledged that some Clubs can access significant third party revenue to strengthen their squads while we, whilst not for a second looking to use this as an excuse, are looking for innovative methods to build our team/ recruitment & retention systems while also looking to garner legitimate third party opportunities at our Club in compliance with NRL Rules and Regulations.
We asked whether it was tough to get players to come to Newcastle and they indicated that it wasn’t and we also asked whether we were playing overs for players to come to the club and they said no, they set a fair market price and didn’t exceed that, they would let player walk if necessary.
Expanding the reach of the club - We asked about where the club saw its geographical boundaries and Matt indicated from the central coast up as far as Coffs Harbour and out as far as Tamworth.
We asked what the club was doing to cultivate support in the regional areas and they indicated that they used footy clinics and school visits. We suggested that they could really strengthen the grip proactively. We suggested moving a game to the Central Coast every year and use that as leverage to get 2-3 more Sydney clubs to move home games up there and include the Knights so that there would be 3-4 games on the Coast each year involving the Knights.
We also suggested that they move another game a year on a 3 yr. rotation through Coffs, Port and Tamworth to cement a following in the Northern part of NSW. We believe that it might make it easier to sell season tickets in Newcastle because they could reduce the pricing and a lesser amount of games would bolster crowd numbers and make for more event type atmospheres. Both initiatives would need to be done with the assistance of the NRL to ensure the club was not financially worse off. Matt said they had people working on this type of initiative and had spoken with the NRL.
Supporter consultative group – I’d been asked for suggestions during the call with John Quayle for first steps as a new CEO (purely debating exercise only) and at the time I’d suggested a supporter’s consultative group. During this meeting I suggested to Brian and Matt that all the stakeholders had a voice in the club except for the supporters and members and this was part of what was fuelling the Knights Rebuild campaign.
We understand that we traded our rights away with the installation of the HSG but we felt there was an opportunity to give the supporters a connection into the club so I again proposed the possibility of forming a supporter’s consultative group.
Independently selected, it could provide regular feedback to the club on a variety of issues as well as providing a conduit to the supporters to raise issues that concern them. Both Brian and Matt thought it was a good idea and we will be discussing the situation further to see if we can establish a structure that works.
Reoccurring theme of “it will take time” - During the course of the discussion, we heard many times that things would take time to correct, to resolve or implement. We accept that in many cases, Brian and Matt are trying to manage expectations and they do believe that things can’t be fixed straight away. We did however make the point a number of times during the course of the discussion that we don’t have the luxury of time to turn things around and make progress on and off the field; we are losing the hearts and wallets of the Hunter.
If things are going to take 3 yrs., then it needs to be done in 18 months. We have to find faster ways of getting things done.
Matt totally agreed, he said we need to be strategic, work collaboratively; innovatively and efficiently to ensure the time it takes is as minimal as possible.
Overall they were generous with their time and spoke freely on many of the issues and we understand that they couldn’t always be completely candid. They seemed willing to discuss any issue put to them and seemed very genuine about getting the club back on its feet both on and off the field.
We’ll stay in touch with them regarding the supporters group and some of the other issues and we look forward to the launch of the strategic plan and detail behind it. We reiterated that there was a level of goodwill towards the new board but we needed them to make things happen and communicate their plans with the fans.
We also told them that there were a lot of Knights fans willing to help the club in any way they could, the club only needs to ask.
Again credit to both Brian McGuigan and Matt Gidley for addressing the concerns of our group.
Let us know if you have any questions or concerns, Jason.
