Richmond prepared for a crisis ... then it happenedBy Greg Baum
The Age
May 25, 2020 — 6.52pmRichmond prepared for a crisis ... then it happened
In February, almost by accident, Richmond began to war game a sudden, gigantic crash in membership and finances.
It wasn't quite the case that the Tigers were ahead of the game again, but it meant that they were on top of their game when the coronavirus struck.
"As part of our strategic planning, because we thought there was going to be a recession in the next 10 years, we started thinking: if there is, how long can we go without any money?" president Peggy O'Neal said at a Committee for Economic Development of Australia (CEDA) sports business forum last week. "How many members can we afford to lose and still maintain what we're doing?
"We hadn't developed that very far, but we were starting to think the good times can't go on forever."
On Monday, club chief executive Brendon Gale explained that Richmond periodically invited in consultant and ethicist Peter Collins, a former Jesuit priest, who two years ago wrote a report on the ball-tampering scandal for Cricket Australia. His remit was to help the club look far ahead.
"It's scenario planning. Imagine in 10 years' time, if we went through a recession, maybe a depression, how would we manage?" Gale said. "Just say we had a 15, 20 per cent fall in revenue across the board, how would we manage that?
"That was in February. Within a month, we were almost shut down."
As it happens, the Tigers expect to lose about 20 per cent of their revenue this season, even if limited crowds come back.
What Richmond reaffirmed in February was that their decision eight years ago to diversify into other businesses, including leisure management and leadership education, was sound.
"We had to build our business," he said. "Wins were few and far between then because we were coming off the bottom. The key focus was on diversifying our business. That insulates you from footy recession. That strategy has served us well through this period."
But Richmond, like all clubs, is still feeling the pinch. That includes the loss of staff, knowing that many will not be back.
"Sporting clubs and sporting organisations mostly have to do a lot with a little," O'Neal said.
"They rely quite a lot on volunteers. They rely on young people who don't get paid what perhaps they could get paid in other businesses, because they love their sport and they want to be a part of the excitement of competitive sport."
Now the model will change.
"I think everything is on the table to be looked at again," O'Neal said. "I think the normal we had on January 1 is not what people are going to be looking at. I think that for a while, we'll have to do as much with less."
This applied even to a well-supported, wealthy and recently successful club like Richmond. The AFL's new, drastically reduced soft cap on footy spending guaranteed it.
"Even if you wanted to bring back all the staff that you had to stand down, and had the money, you can't," said O'Neal. "That shows they're going to be leaner organisations."
Gale said one man would not be asked back: the consultant Collins, who foresaw this crash. Gale was joking.
https://www.theage.com.au/sport/afl/richmond-prepared-for-a-crisis-then-it-happened-20200525-p54wah.html
