Yorkshire Carnegie are through their darkest hour and will live to their means from now on, club chief executive Gary Hetherington reports.
The former Premiership club and one-time Powergen Cup winners nearly went to the wall this summer after entering administration.
But with the club saying creditors are now satisfied and the RFU convinced they have a sustainable business plan going forward, they will kick-off the Championship season next weekend without the 28-point penalty they were threatened with.
They will also kick-off as a part-time club, with Hetherington reassuring supporters in Tuesday’s statement that:
* new players and staff appointments will be made this week;
* the club will only spend what they earn;
The focus is now on stability and spending only what we earn, so a big emphasis on growing each of our income streams.Gary Hetherington
* the rugby budget will be £600k this season;
* Carnegie will play all 11 Championship home games at Emerald Headingley;
* the club is now ‘through its darkest hour’
* Yorkshire RFU academy to be based at Leeds Beckett University
In a lengthy statement on the club’s website, Hetherington said: “I am pleased to report we are now very close to putting all our recent difficulties behind us and embarking on a new challenge for the club.
“But, before we focus on the present and future, it is worth reminding ourselves about the recent past as I understand some confusion and misunderstanding still prevails.
“The past eight months have been extremely challenging. In January, the club faced closure and liquidation, resulting from previously committed funding for the business failing to materialise.
“Fortunately, the shareholders of the club’s non-trading holding Company, YTL Ltd, provided personal funds to enable all players and staff to be paid in full until June 30 and the expiry of contracts.
“However, the club couldn’t meet its liabilities for 2019/20 which included nine contracted players and the club’s Operating Board (LRUFC Ltd) of myself, Rob Oates, Professor Paul Smith and Sir Ian McGeechan had no alternative but to enter into a CVA (Company Voluntary Arrangement) and the YTL Ltd Shareholders provided additional, personal funds to the CVA which will enable all the Creditors to receive part-payment for their debt.
“The YTL Board of seven, included the four Directors of LRUFC Ltd and Jon Wright, Alistair da Costa and Chairman, David Dockray.
“On June 30, Sir Ian and Paul Smith resigned from both YTL and LRUFC, leaving myself and Rob Oates as sole directors of the operating company, supported by YTL who were committed to maintaining Yorkshire Carnegie in the Championship.
“The CVA was a new experience for me and I and all our stakeholders are indebted to the expertise and professionalism of our advisors, including Andy Smith and Begbies Traynor who managed the CVA process, which achieved 100 per cent support from the Trade Creditors and nine contracted players.
“This result satisfied the RFU Regulations and avoided a possible 28-point penalty. We have also satisfied the RFU who have been very rigorous, but fair, to maintain our Championship status and our YTL Shareholders have, once again, assisted by providing a £150,000 Bond to the RFU.
“Chris Gibson was appointed as full-time managing director along with Suzanne Oakes as finance director and company secretary and together the board have devised a new business plan and operating model based on a break-even budget and part-time Rugby operation.
“Total expenditure is restricted to just under £1m, of which, the rugby department will spend £600K, vastly reduced from the £2.5m spent in each of the last five years.
“The focus is now on stability and spending only what we earn, so a big emphasis on growing each of our income streams.
“Martyn Wood has been appointed as full-time director of rugby to work alongside Chris Gibson to recruit a new squad and build on the very strong partnership with Leeds Beckett University, who will provide a base for the Yorkshire RFU Academy.
“Kirkstall will remain the club’s training base and Emerald Headingley Stadium will host all 11 Championship home games and the partnership with Leeds Rhinos who provide facilities, amenities and management support under a Services and Management Agreement, will continue.
“The club is now through its darkest hour and ready for the challenge ahead. New appointments to the board of the operating company will be announced soon.
“The YTL Ltd Board will also undergo change and will continue to focus solely on raising new investment. New players and rugby staff appointments will also be announced next week, along with membership and season ticket details.
“The club is extremely grateful for the support of all its shareholders, management, sponsors, members and fans and the on-going support is so essential for Yorkshire Carnegie to recover from the trauma of last season and build on its heritage and support base to deliver the best possible team and match day experience in 2019/2020.”