Following a front page story in the Tor. Star re the Canadian women’s team having to pay $2900 to play for
From: Charles Schandl [mailto:chuckschandl@gmail.com]
Sent: Sunday, July 31, 2011 9:41 PM
To: S & J Morrison
Cc: Craig Morley; Andrew Terry; kevin bloska; Scott Hume; Nick Parks; KEITH MCINTYRE; Chris Mant
Subject: Re: Rugby
Jack, small correction to below. The potential indebtedness arising out of the partnership in the Churchill Cup is not $750,000, it is $1,200,000. As such this could more than double Rugby
Chuck
On Sun, Jul 31, 2011 at 12:23 PM, Charles Schandl <chuckschandl@gmail.com> wrote:
Jack, feel free to distribute as you see fit. If I may there are a couple of other noteworthy items:
1. To provide a more complete picture I decided to have a look at the minutes from the last AGM. For some reason they have not yet been posted even though the meeting was held 4 months ago.
2. I reviewed the minutes from last year's meeting instead to see what discussion and commitment had been made with respect to the financials and Women's rugby. The following are noteworthy:
a) In the AGM minutes there is no mention of financial affairs
b) There is a separate set of minutes for the "Business Session" but there is no mention of financial matters, except one line that says the financials were discussed in a separate "Financial .workshop".
c) There are no minutes from the referenced "Financial workshop"
d) There is a copy of the finance report which essentially just highlights certain items, but concludes with "Rugby Canada will continue to focus on developing sustainable commercial revenue sources combined with tight cost controls around administration and team spending." It seems that the effect of these tight cost controls around administration was to increase them by 11% the following year.
e) The only other financial-related report was for insurance. In that report it appears that a decision has already been taken to make insurance purchase "an administrative rather than a strategic task". Well, I find this interesting because there was another comment in the AGM minutes that there was to be a review of the imbalance between premiums charged and coverage costs. I also found it somewhat shocking given the recent insurance debacle our sport faced when there was no coverage available for a catastrophic claim. I also find it interesting that the board seems to feel that a cost that represents a full 25% of their non-salary discretionary expenses is merely administrative and not strategic. This is simply absurd.
f) In the AGM minutes there are numerous firm commitments to the Women's national team with no mention of how this commitment was to happen. It appears that since then the decision must have been taken to show their commitment by charging each woman $2,900 to play.
g) There is much of the AGM minutes thanking departing board members, introducing new ones, and most heartwarming was an entire section devoted to a discussion of how engraved plaques were given to departing board members.
3. In both the 2009 and 2010 audited financial statement the auditor (BDO) makes a note about Rugby
4. Nowhere in the AGM or other minutes that are available is there any discussion or even mention of the Churchill Cup partnership indebtedness, so it is impossible to know what Rugby Canada's exposure here is. Also there is no mention in the minutes, nor a report from management, that outlines the "unaudited financial information provided by management" to the auditors. Nor is there any discussion of why this potential indebtedness is not considered by the auditors in their "Going Concern" note to the audited statements. This is not a trivial amount and there should be openness around what our exposure is, and how these accumulated loss amounts are arrived at.
Regards,
Chuck
On Fri, Jul 29, 2011 at 6:17 PM, S & J Morrison <s.j.morrison@sympatico.ca> wrote:
Chuck, I believe you’ve provided an excellent in depth review of current concerns relating to the administration of rugby in
Another question I have is where does
Forty top Canadians playing in
one way. Whatever happens there is just no way Professional rugby is going to be seen in
Chuck, I’d like to pass on your comments to Rugby
Jack
From: Charles Schandl [mailto:chuckschandl@gmail.com]
Sent: Friday, July 29, 2011 3:44 PM
To: S & J Morrison
Cc: Craig Morley; Andrew Terry; kevin bloska; Scott Hume; Nick Parks; KEITH MCINTYRE; Chris Mant
Subject: Rugby
Jack,
I've attached below a link to a recent news article that is, at least, thought provoking and in my opinion reflective of a significant problem our sport faces administratively. I know you have recently been following and circulating debate around the current state of our sport, and I thought you might find this of interest.
Unfortunately the article is not complete, and possibly not even fair, since the writer makes no effort to link this back to the financial picture of rugby in Canada to evaluate whether or not the position of Rugby Canada as expressed by Graham Brown is defensible. Essentially Mr. Brown deflects the criticism to the IRB for funding women's rugby at a far lower rate than men's, saying that without more IRB funding Rugby
Based on this article it appears each team member is being charged $2,900. Assuming 30 team members this translates to a revenue stream to Rugby
There are a number of noteworthy items in the 2010 financials, and when compared to 2009:
1. External (IRB and Government) funding dropped in 2010 by about $300,000. Not including a non-recurring item it seems commendable that Rugby Canada was able to make up that shortfall entirely through their own revenue stream. However when you look more carefully this is deceptive.
2. Of the internal increase in revenue, $125,000 is fundraising. Unfortunately the expenses for fundraising also went up by $125,000 so there is no real increase in net fundraising income.
3. The balance, $200,000, is an increase in National Teams revenue. And in fact, the picture gets brighter because Rugby
4. Not including non-recurring items, the overall expenses for Rugby
5. In the meantime, year over year Rugby
6. The General Administration costs are on top of "Staff Salaries" which account for an additional $845,000 in 2010 and when combined with administration the total is some $1,445,000 for 2010. Unfortunately in 2010 their entire discretionary spend on domestic rugby, development and the like was only $1,180,000.
7. Of further interest are the Insurance revenues and expenses. Over the 2 years ('09 and '10) Rugby
Based on the above, I have some suggestions for Mr. Brown to help fund the Women's National side and to ensure that our best players actually play (surely this is the point of a national side, and in line with the stated purpose of Rugby
A) Cut your General Administration costs back by the amount they increased last year. In the world at large flat administrative budgeting (as opposed to your 11% increase) has been the norm for some time now, so this should be easily achievable. Net benefit: $50,000
B) Decrease your expenses associated with fundraising. Currently the expenses associated with fundraising are $173K against revenue of $246K, or a staggering 70%! Just reducing the expense rate to 50% which is still high (perhaps fewer canapes and drinkies for Board members on Gala nights might help do the trick) generates an additional $50,000
C) Decrease costs associated with Board meetings by 50%. I can suggest some new technology called "conference calling" that might defray the costs of business class tickets and downtown
D) Contribute back 50% of your windfall on insurance premiums for an additional $65,000. I would suggest the other 50% be given back in the way of reduced premiums for players. At the current high premium costs for players vs. other sports, there can be little doubt that at least some people are turning away from rugby. If we can bring these premiums down it will help attract more players, thereby generating more membership dues for Rugby
E) Take a serious look at your mandate and decide whether it is to support "Staff Salaries" and "General Administration" or is it to support the development of a national rugby plan through donation, development and the like. The direct expenses associated with the national team are essentially a wash against revenue received from outside sources (IRB and Government) so we need to look to the other revenue and expense items that are at the discretion of Rugby
With these very modest steps we total $325,000 (more next year) that should be immediately available to support our Women's National side at the Nations Cup. They only need $87,000 to stop this absurd pay-to-play policy, so that leaves a balance of about $240,000. Now in the article attached above Mr. Brown also mentions in passing that the National Under 20's side recently had to pay $4,100 each to play. I for one had to pull out my handkerchief in sympathy with his tough situation when he says that Rugby Canada's decision to charge these young players, who represent the future of our national program, was "tough to talk to parents about". Well, I am very pleased to tell him that with the $240,000 that is left over he can make lots of cheerful calls to parents and tell them they're getting their money back, since that will only cost about $123,000.
This still leaves us with about $115,000 left over from our modest cost saving suggestions. I suggest it be put aside in a fund, to be called upon the next time a young national player misses the chance to contribute to our national side because his parents can't afford Mr. Brown's pay-to-play fee, or our Women's National side can't field our strongest team at the Nations Cup.
We can, and should, debate what the true mandate of Rugby
What I find unacceptable, and even unconscionable, is a state of affairs where Rugby
1. Uses more of its discretionary spend to administer the mandate than to fulfill it, thereby charging fees and premiums that serve to block new entrants to the sport;
2. Has created a financial situation and allocation that favors administrative and Board expenses over paying for our Nations Cup playing shirts (players have to pay for their own jerseys it seems), resulting in national level players unwilling or unable to play for their respective national teams; and
3. Has a Board that rationalizes these failures by blaming IRB contributions rather than getting their own house in order and actually doing something about the absurdity of charging the national players exorbitant fees for the right to play for
I have heard much in recent years from Rugby
Yours,
Chuck Schandl
Club Captain