I don’t think you can over-estimate the effect that acquiring the Ricoh Arena will have on us as a club,” says Nick Eastwood, the softly-spoken deputy chair of Wasps Rugby Club. “It’s a watershed moment and central to our plans to return to the top of European rugby.”
Wasps’ acquisition of Ricoh, for a reported £20m – Eastwood remains tight-lipped about the exact price – in October 2014 marks a remarkable turnaround for a club that was, just 18 months prior, within seconds of going into liquidation due to unpaid bills. The club had struggled financially for years, partly due to it not having its own stadium – resulting in diminished non-matchday revenues – since it sold its ground in Sudbury in 1996.
“The move to Ricoh has given us the security the club has craved for years and is the first step in returning this historic club where it belongs – to the top of Europe,” he says. “Overnight, we went from having the second smallest turnover in the Premiership to having the biggest.
“The huge non-rugby business at Ricoh – the event spaces, restaurants, the casino – turns over £40m a year and will mean that financially, we’ll be able to compete with European heavyweights like Toulouse.”
Setting out
Eastwood’s vision of challenging Europe’s top clubs in sporting and economic terms is ambitious – even audacious – but should come as no surprise, considering his impressive track record. Prior to joining Wasps in 2012, he spent a 12-year spell as finance director of the Rugby Football Union (RFU), during which he oversaw a dramatic turnaround in the sports body’s fortunes. In the course of Eastwood’s reign, RFU’s net worth grew from £35m to £180m and the organisation went from recording a £5m annual loss to making profits of £15m. An impressive record, but one which Eastwood is keen to downplay in his typically jovial way. “Don’t ask me how we did it,” he says on turning around the RFU. “Because I can’t remember!”
Prior to joining the RFU in 1999, Eastwood had enjoyed a successful career in the financial sector. He started out at accounting powerhouse Arthur Anderson in the 1980s before a stint at US-based Lifetime Corporation, owner of recruitment company Office Angels.
He returned to the UK in 1993 and joined Anita Roddick’s team at ethical cosmetics retailer The Body Shop, where he was global head of corporate services. Eastwood says The Body Shop – and the unique business environment created by the blue-sky thinking Roddick – helped him adjust to life at a sports organisation.
“I think the biggest challenges in a membership-based organisation such as RFU are the very unusual governance structures,” he says. “There’s a council and a management board largely made up of elected members, who often have a very different perspective from people with a traditional business background.
“In a business environment you make a decision and your team implements it – in a membership organisation you have to work through others far more. My time at Body Shop was quite good preparation for that, because Anita just didn’t believe in organisation charts so there weren’t many formal structures.”
Striking the balance
During his time at RFU he learned about the delicate balancing act required to run a successful sports business. While most businesses have a single primary objective – economic success – sports operators have two main objectives: commercial achievements and sporting prowess. Both of those objectives were achieved at the RFU, as the financial success was accompanied by England winning the Rugby World Cup in 2003.
Eastwood, however, is keen to point out that he is only accountable for the financial performance. At Wasps, he leaves on-the-field success firmly in the hands of director of rugby Dai Young, the fiercely competitive former Welsh prop.
“When it comes to playing matters, there’s nothing I could directly do, so I don’t even attempt to,” he says – and adds that he is keen to avoid setting any concrete on-field targets.
“I don’t believe in setting specific targets such as wanting to win a certain trophy by a certain date,” he says. “Because what happens if you don’t win it? That’s not to say that Wasps hasn’t got a clear idea of where it wants to be as a club though. We want to be better than we were the year before. We were seventh last year, so want to be in the top six this year.”
Into the WASPS' nest
Eastwood was appointed Wasps CEO in November 2012, during the most tumultuous period in the club’s history. Former owner Steve Hayes, who’d taken the club over in 2008, had failed in his bid to move Wasps to its own stadium and put the club up for sale in October 2011. Finding a new owner for a club £2m in debt and with no assets other than its playing staff, however, wasn’t easy and Hayes relinquished ownership to businessman David Thorne in the summer of 2012.
Thorne’s search for a new CEO that would stabilise the club ended when Eastwood joined in November 2012. But what was in it for Eastwood?
“It was the scale of the challenge,” he says. “Numbers wise and employees wise, Wasps is probably the smallest job I’ve ever done – but it’s by far the most difficult. Wasps had gone from a dominant force in English and European rugby in the 2000s to becoming a club in real trouble.”
During his first week in the job, Eastwood had a meeting with Irish businessman Derek Richardson. It was then that the wheels were set in motion for Richardson, an online insurance magnate, to buy the Wasps from Thorne and secure the club’s long-term future.
“The reason it worked so well with Derek from the very start was that we were both looking to do the same thing – to resurrect a once great club that had fallen on really bad times. I mean really, really bad times.”
Eastwood and Richardson’s rebuilding, however, nearly came to an abrupt end before a brick was laid, thanks to an unpaid £500,000 HMRC bill. At the time, in early 2013, reports suggested that only an 11th hour payment saved the club. Eastwood confirms the reports as accurate.
“We were within a minute of going bust,” he says. “We were on a final warning and had to get a payment off to HMRC by 3.30pm – and the money left the bank account at 3.29pm. If we hadn’t got it out on time, the automated winding up procedures would’ve kicked in and we would have been out of business.”
Disaster was averted and, after a further cash injection from Richardson secured the short-term survival of Wasps, the two could set out to plot a road to sustainable recovery. A major part of that was to secure a new, permanent home.
Moving House
Since selling its old ground in Sudbury, west London for housing in 1996, Wasps had played home games – as a tenant – at four different grounds, most recently at Wycombe Wanderers’ Adams Park. Not owning its own stadium meant the club had little control over revenue streams.
“For every pound of non-ticket revenue we made at Adams Park, we only got to keep around 15p,” he says, outlining one of the many challenges faced by stadium tenants. “The economic model of a ground share just doesn’t work for a rugby club like ours, because effectively all you’ve got during the year is your central income – such as sponsorship – and then your ticket revenues for 16 home games. It’s a bit like having a restaurant and only opening it for 16 days a year. Finding a new home was crucial.”
Eastwood says that, while building a new stadium somewhere within its traditional base in west London was initially treated as the best option, it soon became clear that a more radical plan was needed.
“We realised that building a stadium in the south-east wasn’t an option,” he says. “It was simply never going to happen. To accommodate a stadium and all the revenue-generating facilities you need to have 15-20 acres of free space. Anyone with that sort of land available for a commercial development will never, ever build a stadium on it.”
The decision to uproot and move outside the south-east region wasn’t taken lightly, but was made easier when the opportunity to move into an existing, first-class facility arose. Eastwood says that the Ricoh Arena first came up as an option in March 2014.
“We knew the story of the stadium and that there might be a possibility of it being sold,” Eastwood says. “So we established contact with the council – who owned the stadium – and they asked us to go up and talk to them. They clearly liked what we were planning to do – partly because all of their previous suitors had been property development people – and understood we were real and our ambitions were pure.”
Touching down
Wasps’ life at Ricoh has got off to a good start. The first home game, on 21 December 2014, attracted a crowd of 28,524 – the highest ever top flight crowd at a club ground. Comparing that to Wasps’ average gates at Adams Park – around 5,500 – will force even the most sceptical to accept that the fears of Wasps losing fans due to the relocation were misplaced.
As well as dealing with the increased attendance figures, Eastwood will be kept busy – and happy – by his new responsibilities in running what is now a multi-faceted company. Alongside the 32,000-seater stadium, the company’s estate now includes the 6,000sq m exhibition centre, the 121-bedroom Ricoh Arena Hotel, The Grosvenor G Casino and an on-site leisure club. The size of the business is reflected in a new senior management team with Eastwood being promoted to deputy chair and David Armstrong (new group CEO) and Andy Gibbs (new MD) being brought in.
“It’s incredibly exciting, having all these assets,” Eastwood says. “We’re now an events business and want to make Ricoh the most successful multi-use arena in the country. But at our core we’re still a sports club, so the results that really matter are the ones on the pitch – that’s how our success will be measured. Acquiring Ricoh makes us a leading club in creating revenue, but we need to ensure we translate any financial success to success on the pitch.”
