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Economics of the madhouse


Scotland on Sunday reports
IAIN MORRISON
THE horse bolted so long ago that it is over the hill and into the next country, never mind county, but it is still almost impossible to look forward to next weekend's Guinness Premiership final between Sale Sharks and Leicester Tigers without dwelling wistfully upon what might have been.

Edinburgh-born businessman Brian Kennedy did offer to buy into Scottish professional rugby but the SRU bigwigs at that time turned down his money for reasons that might have appeared sensible at the time but which, in hindsight, look nothing short of madness. The rest is history. Kennedy took his moolah to his adopted town of Manchester and six years later Sale Sharks sit on top of the Premiership pile after the regular season with 80 minutes next Saturday to prove their supremacy.

Kennedy is rattling good company. Chatty and friendly, he is happy to make time for the press despite being pursued by Sky Television for an interview ahead of next weekend's finale while also attempting to close a large business deal in between times. He is a man without airs or angles, which possibly stems from his modest beginning in the Gorgie area of Edinburgh where his dad commuted to the "posh people's houses in Colinton" to clean windows, dragging the young Brian out in all weathers to help him in return for the princely sum of £1 per week.

He must have polished plenty of windows because Kennedy now heads a glazing, plastics and property empire that boasts a turnover of approximately £450m a year, while his own private net worth was recently guesstimated in the region of £150m. All of which goes some way towards explaining how he can afford to spend £9m on dragging the Sharks from anonymity to the semi-finals of the Heineken Cup and, of course, next Saturday's decider at Twickenham. The how is taken care of but that still leaves the why.

Quite simply, Kennedy is mad for the game. He loves it. Just a couple of months ago the little local team his brother plays for struggled to find 15 bodies to field against some hoary farmers in the Buxton hills. Kennedy immediately offered himself and dragged along Sale's coaching duo of Philippe Saint Andre and Kingsley Jones, which must mean some interesting small print in their contracts. The farmers got a fright facing two international veterans and the multi-millionaire owner of Sharks, "and we won", Kennedy says with his childlike enthusiasm for the game miraculously still intact at the age of 46.

With the Scottish pro-teams now actively searching for investors Kennedy has opened his door, and more importantly his books, to all interested parties. He says that he already has a meeting planned with Aberdeen businessman Graham Burgess to discuss any bid.

Referring to people like himself who have backed the club game in England with oodles of hard cash he once said: "They've done that for the love of the game, there's no commercial justification for it". Now that he has been drafted on to the good ship SRU as a non-executive director will he say the same thing to potential investors in Scottish pro-teams?

"Absolutely", he insists, "because that is the truth. This is not a money-making venture. But if you invest in rugby union I can guarantee that you will add a bit of spice to your life, you will have a real challenge on your hands and you will be injecting capital into a sport that we all love and believe in. Furthermore it is possible that if you build the right brand and get some success you will have a vibrant club with 10-12,000 supporters and not lose money."

This is essentially where the Sharks are now, with Kennedy expecting his team to break even this financial year and post a small profit next season. The businessman in him reckons that no more than a handful of clubs in the Guinness Premiership make money.

"Northampton, Leicester, Gloucester and perhaps ourselves, but others are going in the right direction and London Irish might be profitable soon. But if Sale makes any money next year it will be re-invested back into the squad."

After years living down south Kennedy's accent owes almost as much to Manchester as it does his native city and his son Jonny has even appeared in England's under-16 age group trials.

With perfect irony, Dusty Hare recruited the young Kennedy, who has signed academy forms with Sale's greatest rivals, Leicester. Is there any chance of Junior showing up next weekend sporting opposition colours?

"No!" is the short and sharp answer. "He'll be there wearing the blue Sharks' shirt. He knows what side his bread is buttered," says a laughing father who is understandably proud of his son's achievements to date.

He is also proud of how far his club has come since he first took over, especially given that his chosen area of the country has traditionally belonged to rugby league and football. Knowing the overwhelming importance of good facilities, Kennedy moved Sale from their cosy facilities at Heywood Road and into a ground sharing scheme with Stockport County at Edgeley Park where they have been attracting crowds of 10,000. That is almost eight times the average gate of 1,200 when he first took over and twice the fan base of their round ball co-tenants, which should give Scottish investors some cause for optimism.

"It is a great opportunity for some individuals who love rugby," says Kennedy of the current situation in Scotland. "It should have happened earlier but it didn't. Now the whole thing is rightfully being driven by finance because we (the SRU) cannot afford the current set-up.

"It's a win/win situation because the public will get ownership of the team, it will be marketed better than it has been up to now, there will be more competition, more entrepreneurial flair and more self-sufficiency. Everyone's a winner: the fans, the players, the SRU and the investor."

But only provided the investor does not gauge success by the weight of his wallet?

"You're right, you're right," Kennedy concedes. "This is about a high net worth individual who must invest in rugby for all the reasons that I did it. I will warn them now not to expect to build up equity value."

Asked to point out the biggest pothole in the path of any potential investor in the Scottish pro-teams, Kennedy muses for a while?

"That's a very good question," he says. "I think it would be a warning not to expect success too early. Man makes his plans and God laughs.

"I expected to be winning things after two or three years but we were still playing in front of two and a half thousand spectators after that time. Don't expect a brand to be built too early. It takes time, and success, for the public to get hooked on the team. But if you persevere then you will end up in a situation like Northampton, Leicester or Gloucester, where the fans will turn up almost regardless of whether you are winning or losing.

"I took over Sale when they were in 11th place in the Premiership. The previous owners had wasted £8m and cut the budgets dramatically and they were playing in front of 1,200 or 1,300 people every week. They were useless, the whole club was useless. Those people looking to take over a Scottish pro-team will inherit a much better organisation than I did."

Kennedy admits that he has spent far more money on the Sharks than he ever intended when he started out at the turn of the Millennium. But he insists that he regrets absolutely nothing. He feels that owning Sale Sharks has given him - or should that be driven him - to experience the extremes of emotion, from the highest kind of exhilaration to the depths of despair. He is sufficiently smitten with the game of rugby to consider this an excellent return on his investment.

Whether or not any potential investors in the Scottish game share Kennedy's willingness to accept emotional rather than financial rewards will probably determine the immediate future of the three pro-teams.

This article was posted on 21-May-2006, 07:27 by Hugh Barrow.

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