Post by QPR Report on May 30, 2009 7:25:16 GMT
ALmost 30 years ago today....
The Independent/Steve Bale - May 30, 1996 - Pounds 10m offer to link QPR with Wasps -
Combining football and rugby clubs, much touted since rugby union went professional nine months ago, will become reality if Queen's Park Rangers and Wasps accept bids from a music magnate who intends to bring them together at Loftus Road.
Chris Wright, majority shareholder of the television and entertainment group Chrysalis, yesterday tabled an pounds 8m offer to buy the recently relegated football club from Richard Thompson. At the same time he proposed paying pounds 1.75m for a 49.9 per cent stake in Wasps, with another pounds 1m available for players' contracts.
Rangers director Alan Hedges said that Wright's was just one of three offers for the football club. One is fronted by the former Guinness chief, Ernest Saunders.
"I have been a supporter at Loftus Road for 20 years. That's why I want to get involved - because I am a fanatic," Wright said yesterday. He said that Ray Wilkins would definitely continue as manager, and would have money to buy new players.
Wright believed he had the deal "in the bag" two days ago but said that Thompson "changed the parameters - and that usually means asking for more money".
Wasps have asked for 21 days to consider Wright's offer, which is contingent on their playing first-team matches at Loftus Road and using their present facility at Sudbury near Wembley for second-team fixtures for both the football and rugby clubs, though Wright is reportedly interested in developing Sudbury if his QPR interest goes unrequited.
Wright's plan received the immediate endorsement of their captain, the England flanker Lawrence Dallaglio, and the Wasps players.
"The QPR link-up would undoubtedly be good for Wasps," Dallaglio said yesterday. "It would provide us with the best stadium facilities in the country and help us go into the new era of professional rugby in the right environment to produce a trophy-winning side."
He added: "The surface is like a bowling-green and would be fantastic to play on." Quite how long it would stay in such pristine condition is arguable, though, remembering the experience of Cardiff City when the Cardiff rugby league side played at Ninian Park in the early 1980s. Then, the rugby, even without union's churningly intensive scrummaging, rucking and mauling, played havoc with the turf.
That would be just one of the implications that the Football League would want to investigate. "Any member club wishing to share its ground with another sporting activity would need our permission," League spokesman Chris Hull said.
"There would be obvious concerns as to the standard of pitches for League matches if another sport were to be staged on the same ground."
There are also potential problems with the pitch size. On the few occasions rugby has used football facilities - for instance, when the North played New Zealand at Anfield in 1993 - the pitch has had to be shortened in order to accommodate even a truncated in-goal area.
"These proposals not only offer both clubs financial security but also the chance to establish London's premier sporting venue at Loftus Road," Wright said. "We would ensure that Wasps and QPR retain their individual identities but are able to benefit from the huge marketing and commercial opportunities that the joint organisation would provide."
FINANCIAL TIMES - June 3 1996 - Chrysalis chief mixes business and passion
One night last year Chris Wright, chairman of Britain's Chrysalis media group, was watching his basketball team, the Sheffield Sharks,
play the London Towers at Wembley, writes Patrick Harverson in London.
He was standing at the back of the court chatting with a bystander, but it was the game which kept him nervously transfixed.
For the 51-year-old millionaire, owning a sports team is not an idle hobby but a passion. He wants to expand his empire by acquiring
Queens Park Rangers, a London professional soccer club, and Wasps rugby union club. Although Wright's £llm plan unveiled last
week to merge the two clubs and create a single publicly quoted sports company was well received at Wasps and QPR, there are obstacles. In particular, his plan for Wasps to share QPR's Loftus Road stadium - a key element in his integrated sports club strategy - may fail to win the approval of the sports authorities.
However, as founder of Chrysalis Records, one of the most famous music labels in rock, and responsible for building a multimedia
empire encompassing television, radio, films and rock music, Wright's acumen should be an asset to the sporting world.
Certainly he has enough money to make his plan work: his stake in Chrysalis is worth about £64m. But while Wright is a genuine sports
fen. he will not let sentimentality get in the way of making money. He said of the heretical idea that a rugby team should play at a football stadium: “It's all about bums on seats." archive.org/stream/FinancialTimes1996UKEnglish/Jun%2003%201996%2C%20Financial%20Times%2C%20%233%2C%20UK%20%28en%29_djvu.txt
TELEGRAPH/Mihir Bose - April 3 2001 - Wright prepared to cut ties with QPR for £1
CHRIS WRIGHT, the chairman of Queens Park Rangers, might be willing to sell the club for just £1, provided the new owner is willing to take on debts of around £6.5 million.
Wright is awaiting an offer from Andrew Ellis, a property developer, with whom he has held talks. He will, however, continue to be involved with Wasps rugby club which he, along with former trustees of Wasps, is planning to buy out and run independently of QPR. Both teams will continue to play at Loftus Road.
A QPR fan for 30 years, Wright also admitted to errors in the running of the club, who are in danger of being relegated from Division One this season. He said that it was a mistake for the club to float on the Stock Exchange and that QPR spent too much in the transfer market. In an effort to secure QPR's future, however, Wright is prepared to sell the club for a nominal sum.
At present both QPR and Wasps are subsidiaries of Loftus Road plc, a quoted company, and their combined debts are £9.5 million. However, once Wright buys out Wasps and also the QPR training ground near Acton, the debts will come down to £6.5 million.
Wright, who is in France on business, told me yesterday: "QPR will continue to train at the Acton ground, play at Loftus Road and the football club as such could be sold for a nominal fee. However, any buyer must demonstrate that he will take the club forward.
"I do not want to sell QPR to someone who will sell Loftus Road, which could be worth £20 million, move QPR somewhere else or get them to ground-share with Fulham or Brentford and then walk away with the money. Unlike QPR, which is a football club and can go into administration, Wasps being a rugby club cannot. I am committed to funding QPR until October and the administration has been done to make sure both clubs have a future which may not be prosperous - we cannot guarantee that in the present climate - but will at least be secure."
If his plans do not work, Wright stands to lose all of the £20 million he has put into QPR. If his plans succeed he could cut his losses to £11.5 million. QPR are losing £575,000 a month, and Wright said: "That is a cost to me personally. I am borrowing from the banks and I cannot borrow any more."
Wright may have been prepared to carry on funding the losses but for the reaction of the fans after QPR lost at home to Fulham in January. It marked the moment when Wright felt his era at QPR, which had begun with such acclaim as fans welcomed a genuine supporter to replace the increasingly disliked Richard Thompson, turned to hatred. He feels it all the more deeply because sharing his directors box that day was Mohamed Fayed, regarded as the new model for the football club owner.
"I am not a Fayed. If the fans had appreciated that things were not good but I was doing my best and that, unlike Fayed, I could not just get my cheque book out, I would have stayed. But since then fans have tried to storm the directors box and I was told by our chief executive that if I wanted to come to home matches we would have to get special security. I lose £275,000 at every home match. On top of that if I have to have special security to watch, then it is not worth it."
Even then Wright could have avoided the weekend's dramatic decision to put QPR into administration but for the fact that Loftus Road are a publicly quoted company. "If we were private we could have arranged matters until everything was settled. But as a public company we had to inform the Stock Exchange. Our accounts were due and this showed we could no longer say we were a `going concern' [solvent]. It proves to me that it is a mistake to float. Football clubs should not be on the Stock Exchange, apart from Manchester United."
This is one of many mistakes Wright disarmingly owns up to. "It could be said we were dealt a bad hand but you still have to play it and we made mistakes, there was bad luck and bad advice and bad decisions made."
One of these, said Wright, was when a former chief executive signed up several young players on long-term contracts worth a lot of money. "A dozen or so youth players were given three, four, or even five-year contracts of between £40,000 and £90,000 a year. Most of them will never play for QPR. I did not know about it until sometime afterwards. I should have been more hands-on."
At that time QPR were enveloped in a euphoria of greatness to come, and Wright admitted it was a mistake to attempt to change the essential nature of the club. He said: "QPR had always existed by buying cheap and selling at a profit. Look at Ipswich - they have done brilliantly that way. Unfortunately we did not want to go down that route. So we bought John Spencer for £2.25 million with a salary of £400,000, Mike Sheron for £2.75 million with salary of £450,000 and Gavin Peacock for £1 million a salary of £350,000. It did not work."
Interestingly, Wright defended the decision to put Wasps and QPR together, saying: "Conceptually, the merger does work. Even financially it has not done badly. We got £8-9 million selling Sudbury-Wasps ground and in the last two years this has kept QPR going. But the football fans feel rugby is sucking the money out of football, which is not the case."
Wright will continue to follow QPR but feels like a boy who has stubbed his toe. "It hurts so much I want to cry," he said, "but I want to be grown up and not show my tears."
Loftus Road Factfile
Aug 1996: Chris Wright, owner of Chrysalis Records and said to be worth £150m, buys QPR for £10m and Wasps for £3m and floats company on Stock Exchange.
Nov 1996: Wright breaks QPR transfer record, signing John Spencer from Chelsea for £2.5m.
July 1997: QPR make their most expensive signing, recruiting Mike Sheron from Stoke City for £2.7m.
March 1998: Rangers sign Vinnie Jones for £750,000.
End of 'parachute' payments to ex-Premiership clubs for two years after drop out of top flight hits Rangers hard.
July 1999: QPR buy Stewart Wardley from Saffron Walden for £15,000 and Rob Steiner from Bradford for £215,000.
Nov 1999: Sammy Koejoe signs from Austria Salzburg for £250,000.
May 2000: Clarke Carlisle signs from Blackpool for £250,000, bringing total to £730,000 for the season. No players were sold.
July 2000: Peter Crouch signed from Tottenham Hotspur for £60,000.
Dec 2000: Michel Ngonge bought from Watford for £50,000 to bring QPR's total money spent on transfers to £110,000. Only player sold was Ademola Bankole to Crewe Alexandra for £50,000.
After two-and-a-half years of waiting to slash the wage bill, during which time the sale of Wasps' former ground in Sudbury saved the company from ruin, Rangers are reported to be set to sell more than 20 players who will be out of contract this summer.
Feb 2001: Wright announces intention to stand down when a new owner comes forward, but says he will continue to meet the company's heavy losses until at least October this year.
April 2001: Holding company Loftus Road plc, owners of QPR and Wasps, are put into administration due to losses of £570,000 per month.
www.telegraph.co.uk/sport/football/leagues/championship/3002384/Wright-prepared-to-cut-ties-with-QPR-for-1.html
______________________________________
July 1, 2004
And Chris Wright looking back (From 2004)
Chrysallis: Chris Wright
01/07/04 10:59 by Growing Business
"QPR was like catching a falling knife,” says Chris Wright, of the West London football club he took over in 1996.
Growing Business: I
The man who started Chrysalis in 1968 and turned it into one of the world’s largest independent record labels is clearly still haunted by what he describes as “the only abject failure I’ve had”.
During his spell with Queens Park Rangers, Wright tried desperately to gain re-promotion to the Premier League, having taken over soon after their drop. But an ill-fated merger with Wasps Rugby Club and AIM-listing under the name Loftus Road Plc (the ground both clubs were to share), was followed by relegation to the Second Division, and the club went into administration struggling for its survival.
They eventually re-emerged and regained some stability on the playing field. But Wright, already a hated figure with the fans, departed in 2002. Ironically, with £10m worth of debts cleared by directors, the club sealed a return to Division One this year. Given he lost £15m of his own money though, it may seem harsh that he remains unwelcome at the club. But, unfortunately, fans rarely recognise good intentions when those running a club take it to the brink of extinction.
He’s moved on, of course, but it’s hard not to let the one major blip on his CV rankle with a man so obsessed with success. After all, to many in the general public this may have been the one time they were truly aware of one of Britain’s most prominent entrepreneurs. Prior to that his major successes, including launching the careers of Sinéad O’Connor, Blondie, Spandau Ballet and Jethro Tull, plus television programmes Midsomer Murders and Football Italia, and a burgeoning portfolio of radio stations, had done much of the talking for him. Even the company’s recently acquired publicity for making the Sunday Times 100 Best Companies to Work For was reflected glory.
TAKING A GAMBLE
But that’s what investment in sport can do. It’s a gamble too often taken with the heart and not the head (see Investing in Football, p46). Business nous counts for little and, refreshingly, Wright is ready to admit his shortcomings. “Administration was a result of me overextending to try to get success on the pitch, trying to get re-promoted and spending money the club simply wasn’t generating. I’ve never speculated with Chrysalis like I did with football. Your brains go out of the window. But I’m not the only one.”
Of that there’s no doubt. It’s fair to say that, since taking on the role of social secretary at Manchester University in the mid-1960s and booking the cream of rising talent to play on campus, Wright has generally had a sixth sense for what the public want. After starting Chrysalis with Terry Ellis (the company was an amalgamation of their names, Chris- Ellis), who he eventually bought out in 1985 for £17.3m, Wright has channelled virtually all his energy into the business. The fruits of his labour are borne out in the annual rich lists, where he is estimated to have amassed around £112m. And last year, the London Stock Exchange-listed company recorded a turnover of £246m, made a £10.4m profit and is now valued at around £320m, making it far more popular with the City than when it floated in 1985 amid controversy.
At the time, a director of Management Agency & Music Plc, which Chrysalis merged with, refused to support a circular announcing the deal to shareholders. This coincided with Spandau Ballet telling the world it was suing the company for alleged breaches of contract. The timing couldn’t have been worse. And to compound matters, the stockmarket had also fallen sharply after plans to float were announced.
MOVING INTO RADIO
But Wright’s able to accentuate the positives now. “Building a record company to being one of the largest independents in the world from a standing start is, in retrospect, a pretty amazing accomplishment,” he says. “Building a TV business up was a fundamental thing too. We’ve also gone from a standing start to being one of the country’s largest radio operators.”
The TV arm was recently disposed of for more than £50m and, in radio, Heart FM is among the fastest-growing stations and continues to threaten Capital FM’s leadership in London. Galaxy and LBC are also part of the stable that has pulled in revenues of £33m in the six months to April of this year. And despite Chrysalis selling its record label to EMI in 1991, it subsequently started another, Echo. This has signed OutKast, and Moloko. The music publishing division has also been successful, boasting rights to over 50,000 songs.
It’s easier now, in a way, to grow new brands given the company has the finance to support an idea for longer. But does he feel he could have grown the business in today’s climate, or were there more openings in the creative industries for entrepreneurs back then? “It’s a different environment now. The way we did it would be more difficult. We didn’t have any money, but had a decent idea and built a business without any help,” he says. “The fact there aren’t local provincial bank managers now would be the main hindrance,” he says.
Aside from talent spotting and creating brands, Wright’s other major strength is inspiring in his workforce a strong sense of identity, which he feels remains despite its size and public status. As well as the standard ‘work hard, play hard’ mantra, Chrysalis retains the smaller business mentality, which starts with Wright. “Unless we can be the best there’s no reason to exist, because we’re not the biggest and there’s no value in being a smaller version of a major,” he argues.
Somewhat unusually though for an owner-manager, where conviction in what you’re doing is essential, he’s more than aware of his deficiencies. But as he considers his tendency to delegate and give others responsibility his main weakness, it suggests the end result would have been better had certain decisions been made by him.
Case study
INVESTING IN SPORT: WRIGHT’S QPR EXPERIENCE
Chris Wright paid £9m for Queen’s Park Rangers in 1996 having been a fan of the club for more than 20 years. “When it went up for sale I couldn’t resist. If I hadn’t had a go I’d have regretted it for the rest of my life. As it is – I’ll regret it for the rest of my life.”
The problem with football, says Wright, is that everyone’s afraid of the fans and spends their time trying to pander to them. “Decisions are made not by the directors or the chairman, but by the fans. The pressure group is so strong. Claudio Ranieri’s recent departure was probably the first time ever that the fans have not fired a manager. And this makes it difficult to run things sensibly.” So it’s no surprise he blames the hiring and firing of managers during his tenure on them.
Given Wright’s problems with QPR, you might think he’d rate football a complex business. But it still strikes him as being remarkably simple. “It’s not brain surgery – it’s pretty easy really. You need a good manager who looks after the players. The marketing takes place on the football pitch. Having said that, there’s more emphasis now on players’ contracts.”
However, despite raising £12m in a stock market flotation, when the club went into administration they had accrued losses of £27m over four years. They owed £4m to the VAT tax man and creditors, and £11m to Wright who had secured debts using the club’s property.
He also realised late on that there’s much more to a player’s transfer than first meets the eye. “It’s a dishonest business with back-handers going on all over,” he says. “I was not aware to the extent I ought to have been at the time, but the whole bung process is rife in football.”
If he had his time again, Wright feels he would probably be more hands-on. But as he says: “The main thing in my life is Chrysalis. Without a healthy Chrysalis I couldn’t afford something like QPR anyway.”
He remains a QPR fan and likes to go to games occasionally, but the circumstances had changed when he returned recently. “The existing board refused to let me sit with them,” he says. “I’m not supposed to be their friends – I’m more the anti-christ, as far as fans are concerned – so they made me sit with the opposition directors.”
It’s probably a reference to his other main disappointment – Chrysalis’ internet investments. Overall, the company made a £27m loss on attempting to build or back successful dot coms and ultimately only one investment made a profit. “I never wanted to do any of the internet investments we did anyway,” he says. “But we raised money specifically for internet ventures and there was a feeling that unless we spent it on that, the City would have been very unhappy. But actually, in hindsight, they might have been happier if we’d said we’re not going to do it and are instead going to establish another radio station.”
Wright decided against using his right to veto, and instead went with the consensus. He still holds a significant stake of 28% in the public company – more than enough to maintain a reasonable say in what direction it heads in. “If it happened again then I’d say that, in my view, the business is best served by saving the money and that it would be better spent elsewhere…and that’s that.”
When it comes to the City, you get the impression he doesn’t waste much time worrying about forecasts or the share price, which is not to say he won’t do what’s necessary. Instead, unlike many public companies, Chrysalis is run as it sees fit and a strong performance in the Square Mile should simply be a positive by-product of a successful business. “You can make a huge mistake in trying to second guess the City. They’re there to make money and have a responsibility to the client base. Our focus is building and running businesses, not worrying about the City. I’d much rather the share price was going down but know the company is healthy than the other way around.” And it’s an approach that, give or take the odd failure, has worked so far.
www.growingbusiness.co.uk/chrysallis-chris-wright.html
The Independent/Steve Bale - May 30, 1996 - Pounds 10m offer to link QPR with Wasps -
Combining football and rugby clubs, much touted since rugby union went professional nine months ago, will become reality if Queen's Park Rangers and Wasps accept bids from a music magnate who intends to bring them together at Loftus Road.
Chris Wright, majority shareholder of the television and entertainment group Chrysalis, yesterday tabled an pounds 8m offer to buy the recently relegated football club from Richard Thompson. At the same time he proposed paying pounds 1.75m for a 49.9 per cent stake in Wasps, with another pounds 1m available for players' contracts.
Rangers director Alan Hedges said that Wright's was just one of three offers for the football club. One is fronted by the former Guinness chief, Ernest Saunders.
"I have been a supporter at Loftus Road for 20 years. That's why I want to get involved - because I am a fanatic," Wright said yesterday. He said that Ray Wilkins would definitely continue as manager, and would have money to buy new players.
Wright believed he had the deal "in the bag" two days ago but said that Thompson "changed the parameters - and that usually means asking for more money".
Wasps have asked for 21 days to consider Wright's offer, which is contingent on their playing first-team matches at Loftus Road and using their present facility at Sudbury near Wembley for second-team fixtures for both the football and rugby clubs, though Wright is reportedly interested in developing Sudbury if his QPR interest goes unrequited.
Wright's plan received the immediate endorsement of their captain, the England flanker Lawrence Dallaglio, and the Wasps players.
"The QPR link-up would undoubtedly be good for Wasps," Dallaglio said yesterday. "It would provide us with the best stadium facilities in the country and help us go into the new era of professional rugby in the right environment to produce a trophy-winning side."
He added: "The surface is like a bowling-green and would be fantastic to play on." Quite how long it would stay in such pristine condition is arguable, though, remembering the experience of Cardiff City when the Cardiff rugby league side played at Ninian Park in the early 1980s. Then, the rugby, even without union's churningly intensive scrummaging, rucking and mauling, played havoc with the turf.
That would be just one of the implications that the Football League would want to investigate. "Any member club wishing to share its ground with another sporting activity would need our permission," League spokesman Chris Hull said.
"There would be obvious concerns as to the standard of pitches for League matches if another sport were to be staged on the same ground."
There are also potential problems with the pitch size. On the few occasions rugby has used football facilities - for instance, when the North played New Zealand at Anfield in 1993 - the pitch has had to be shortened in order to accommodate even a truncated in-goal area.
"These proposals not only offer both clubs financial security but also the chance to establish London's premier sporting venue at Loftus Road," Wright said. "We would ensure that Wasps and QPR retain their individual identities but are able to benefit from the huge marketing and commercial opportunities that the joint organisation would provide."
FINANCIAL TIMES - June 3 1996 - Chrysalis chief mixes business and passion
One night last year Chris Wright, chairman of Britain's Chrysalis media group, was watching his basketball team, the Sheffield Sharks,
play the London Towers at Wembley, writes Patrick Harverson in London.
He was standing at the back of the court chatting with a bystander, but it was the game which kept him nervously transfixed.
For the 51-year-old millionaire, owning a sports team is not an idle hobby but a passion. He wants to expand his empire by acquiring
Queens Park Rangers, a London professional soccer club, and Wasps rugby union club. Although Wright's £llm plan unveiled last
week to merge the two clubs and create a single publicly quoted sports company was well received at Wasps and QPR, there are obstacles. In particular, his plan for Wasps to share QPR's Loftus Road stadium - a key element in his integrated sports club strategy - may fail to win the approval of the sports authorities.
However, as founder of Chrysalis Records, one of the most famous music labels in rock, and responsible for building a multimedia
empire encompassing television, radio, films and rock music, Wright's acumen should be an asset to the sporting world.
Certainly he has enough money to make his plan work: his stake in Chrysalis is worth about £64m. But while Wright is a genuine sports
fen. he will not let sentimentality get in the way of making money. He said of the heretical idea that a rugby team should play at a football stadium: “It's all about bums on seats." archive.org/stream/FinancialTimes1996UKEnglish/Jun%2003%201996%2C%20Financial%20Times%2C%20%233%2C%20UK%20%28en%29_djvu.txt
TELEGRAPH/Mihir Bose - April 3 2001 - Wright prepared to cut ties with QPR for £1
CHRIS WRIGHT, the chairman of Queens Park Rangers, might be willing to sell the club for just £1, provided the new owner is willing to take on debts of around £6.5 million.
Wright is awaiting an offer from Andrew Ellis, a property developer, with whom he has held talks. He will, however, continue to be involved with Wasps rugby club which he, along with former trustees of Wasps, is planning to buy out and run independently of QPR. Both teams will continue to play at Loftus Road.
A QPR fan for 30 years, Wright also admitted to errors in the running of the club, who are in danger of being relegated from Division One this season. He said that it was a mistake for the club to float on the Stock Exchange and that QPR spent too much in the transfer market. In an effort to secure QPR's future, however, Wright is prepared to sell the club for a nominal sum.
At present both QPR and Wasps are subsidiaries of Loftus Road plc, a quoted company, and their combined debts are £9.5 million. However, once Wright buys out Wasps and also the QPR training ground near Acton, the debts will come down to £6.5 million.
Wright, who is in France on business, told me yesterday: "QPR will continue to train at the Acton ground, play at Loftus Road and the football club as such could be sold for a nominal fee. However, any buyer must demonstrate that he will take the club forward.
"I do not want to sell QPR to someone who will sell Loftus Road, which could be worth £20 million, move QPR somewhere else or get them to ground-share with Fulham or Brentford and then walk away with the money. Unlike QPR, which is a football club and can go into administration, Wasps being a rugby club cannot. I am committed to funding QPR until October and the administration has been done to make sure both clubs have a future which may not be prosperous - we cannot guarantee that in the present climate - but will at least be secure."
If his plans do not work, Wright stands to lose all of the £20 million he has put into QPR. If his plans succeed he could cut his losses to £11.5 million. QPR are losing £575,000 a month, and Wright said: "That is a cost to me personally. I am borrowing from the banks and I cannot borrow any more."
Wright may have been prepared to carry on funding the losses but for the reaction of the fans after QPR lost at home to Fulham in January. It marked the moment when Wright felt his era at QPR, which had begun with such acclaim as fans welcomed a genuine supporter to replace the increasingly disliked Richard Thompson, turned to hatred. He feels it all the more deeply because sharing his directors box that day was Mohamed Fayed, regarded as the new model for the football club owner.
"I am not a Fayed. If the fans had appreciated that things were not good but I was doing my best and that, unlike Fayed, I could not just get my cheque book out, I would have stayed. But since then fans have tried to storm the directors box and I was told by our chief executive that if I wanted to come to home matches we would have to get special security. I lose £275,000 at every home match. On top of that if I have to have special security to watch, then it is not worth it."
Even then Wright could have avoided the weekend's dramatic decision to put QPR into administration but for the fact that Loftus Road are a publicly quoted company. "If we were private we could have arranged matters until everything was settled. But as a public company we had to inform the Stock Exchange. Our accounts were due and this showed we could no longer say we were a `going concern' [solvent]. It proves to me that it is a mistake to float. Football clubs should not be on the Stock Exchange, apart from Manchester United."
This is one of many mistakes Wright disarmingly owns up to. "It could be said we were dealt a bad hand but you still have to play it and we made mistakes, there was bad luck and bad advice and bad decisions made."
One of these, said Wright, was when a former chief executive signed up several young players on long-term contracts worth a lot of money. "A dozen or so youth players were given three, four, or even five-year contracts of between £40,000 and £90,000 a year. Most of them will never play for QPR. I did not know about it until sometime afterwards. I should have been more hands-on."
At that time QPR were enveloped in a euphoria of greatness to come, and Wright admitted it was a mistake to attempt to change the essential nature of the club. He said: "QPR had always existed by buying cheap and selling at a profit. Look at Ipswich - they have done brilliantly that way. Unfortunately we did not want to go down that route. So we bought John Spencer for £2.25 million with a salary of £400,000, Mike Sheron for £2.75 million with salary of £450,000 and Gavin Peacock for £1 million a salary of £350,000. It did not work."
Interestingly, Wright defended the decision to put Wasps and QPR together, saying: "Conceptually, the merger does work. Even financially it has not done badly. We got £8-9 million selling Sudbury-Wasps ground and in the last two years this has kept QPR going. But the football fans feel rugby is sucking the money out of football, which is not the case."
Wright will continue to follow QPR but feels like a boy who has stubbed his toe. "It hurts so much I want to cry," he said, "but I want to be grown up and not show my tears."
Loftus Road Factfile
Aug 1996: Chris Wright, owner of Chrysalis Records and said to be worth £150m, buys QPR for £10m and Wasps for £3m and floats company on Stock Exchange.
Nov 1996: Wright breaks QPR transfer record, signing John Spencer from Chelsea for £2.5m.
July 1997: QPR make their most expensive signing, recruiting Mike Sheron from Stoke City for £2.7m.
March 1998: Rangers sign Vinnie Jones for £750,000.
End of 'parachute' payments to ex-Premiership clubs for two years after drop out of top flight hits Rangers hard.
July 1999: QPR buy Stewart Wardley from Saffron Walden for £15,000 and Rob Steiner from Bradford for £215,000.
Nov 1999: Sammy Koejoe signs from Austria Salzburg for £250,000.
May 2000: Clarke Carlisle signs from Blackpool for £250,000, bringing total to £730,000 for the season. No players were sold.
July 2000: Peter Crouch signed from Tottenham Hotspur for £60,000.
Dec 2000: Michel Ngonge bought from Watford for £50,000 to bring QPR's total money spent on transfers to £110,000. Only player sold was Ademola Bankole to Crewe Alexandra for £50,000.
After two-and-a-half years of waiting to slash the wage bill, during which time the sale of Wasps' former ground in Sudbury saved the company from ruin, Rangers are reported to be set to sell more than 20 players who will be out of contract this summer.
Feb 2001: Wright announces intention to stand down when a new owner comes forward, but says he will continue to meet the company's heavy losses until at least October this year.
April 2001: Holding company Loftus Road plc, owners of QPR and Wasps, are put into administration due to losses of £570,000 per month.
www.telegraph.co.uk/sport/football/leagues/championship/3002384/Wright-prepared-to-cut-ties-with-QPR-for-1.html
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July 1, 2004
And Chris Wright looking back (From 2004)
Chrysallis: Chris Wright
01/07/04 10:59 by Growing Business
"QPR was like catching a falling knife,” says Chris Wright, of the West London football club he took over in 1996.
Growing Business: I
The man who started Chrysalis in 1968 and turned it into one of the world’s largest independent record labels is clearly still haunted by what he describes as “the only abject failure I’ve had”.
During his spell with Queens Park Rangers, Wright tried desperately to gain re-promotion to the Premier League, having taken over soon after their drop. But an ill-fated merger with Wasps Rugby Club and AIM-listing under the name Loftus Road Plc (the ground both clubs were to share), was followed by relegation to the Second Division, and the club went into administration struggling for its survival.
They eventually re-emerged and regained some stability on the playing field. But Wright, already a hated figure with the fans, departed in 2002. Ironically, with £10m worth of debts cleared by directors, the club sealed a return to Division One this year. Given he lost £15m of his own money though, it may seem harsh that he remains unwelcome at the club. But, unfortunately, fans rarely recognise good intentions when those running a club take it to the brink of extinction.
He’s moved on, of course, but it’s hard not to let the one major blip on his CV rankle with a man so obsessed with success. After all, to many in the general public this may have been the one time they were truly aware of one of Britain’s most prominent entrepreneurs. Prior to that his major successes, including launching the careers of Sinéad O’Connor, Blondie, Spandau Ballet and Jethro Tull, plus television programmes Midsomer Murders and Football Italia, and a burgeoning portfolio of radio stations, had done much of the talking for him. Even the company’s recently acquired publicity for making the Sunday Times 100 Best Companies to Work For was reflected glory.
TAKING A GAMBLE
But that’s what investment in sport can do. It’s a gamble too often taken with the heart and not the head (see Investing in Football, p46). Business nous counts for little and, refreshingly, Wright is ready to admit his shortcomings. “Administration was a result of me overextending to try to get success on the pitch, trying to get re-promoted and spending money the club simply wasn’t generating. I’ve never speculated with Chrysalis like I did with football. Your brains go out of the window. But I’m not the only one.”
Of that there’s no doubt. It’s fair to say that, since taking on the role of social secretary at Manchester University in the mid-1960s and booking the cream of rising talent to play on campus, Wright has generally had a sixth sense for what the public want. After starting Chrysalis with Terry Ellis (the company was an amalgamation of their names, Chris- Ellis), who he eventually bought out in 1985 for £17.3m, Wright has channelled virtually all his energy into the business. The fruits of his labour are borne out in the annual rich lists, where he is estimated to have amassed around £112m. And last year, the London Stock Exchange-listed company recorded a turnover of £246m, made a £10.4m profit and is now valued at around £320m, making it far more popular with the City than when it floated in 1985 amid controversy.
At the time, a director of Management Agency & Music Plc, which Chrysalis merged with, refused to support a circular announcing the deal to shareholders. This coincided with Spandau Ballet telling the world it was suing the company for alleged breaches of contract. The timing couldn’t have been worse. And to compound matters, the stockmarket had also fallen sharply after plans to float were announced.
MOVING INTO RADIO
But Wright’s able to accentuate the positives now. “Building a record company to being one of the largest independents in the world from a standing start is, in retrospect, a pretty amazing accomplishment,” he says. “Building a TV business up was a fundamental thing too. We’ve also gone from a standing start to being one of the country’s largest radio operators.”
The TV arm was recently disposed of for more than £50m and, in radio, Heart FM is among the fastest-growing stations and continues to threaten Capital FM’s leadership in London. Galaxy and LBC are also part of the stable that has pulled in revenues of £33m in the six months to April of this year. And despite Chrysalis selling its record label to EMI in 1991, it subsequently started another, Echo. This has signed OutKast, and Moloko. The music publishing division has also been successful, boasting rights to over 50,000 songs.
It’s easier now, in a way, to grow new brands given the company has the finance to support an idea for longer. But does he feel he could have grown the business in today’s climate, or were there more openings in the creative industries for entrepreneurs back then? “It’s a different environment now. The way we did it would be more difficult. We didn’t have any money, but had a decent idea and built a business without any help,” he says. “The fact there aren’t local provincial bank managers now would be the main hindrance,” he says.
Aside from talent spotting and creating brands, Wright’s other major strength is inspiring in his workforce a strong sense of identity, which he feels remains despite its size and public status. As well as the standard ‘work hard, play hard’ mantra, Chrysalis retains the smaller business mentality, which starts with Wright. “Unless we can be the best there’s no reason to exist, because we’re not the biggest and there’s no value in being a smaller version of a major,” he argues.
Somewhat unusually though for an owner-manager, where conviction in what you’re doing is essential, he’s more than aware of his deficiencies. But as he considers his tendency to delegate and give others responsibility his main weakness, it suggests the end result would have been better had certain decisions been made by him.
Case study
INVESTING IN SPORT: WRIGHT’S QPR EXPERIENCE
Chris Wright paid £9m for Queen’s Park Rangers in 1996 having been a fan of the club for more than 20 years. “When it went up for sale I couldn’t resist. If I hadn’t had a go I’d have regretted it for the rest of my life. As it is – I’ll regret it for the rest of my life.”
The problem with football, says Wright, is that everyone’s afraid of the fans and spends their time trying to pander to them. “Decisions are made not by the directors or the chairman, but by the fans. The pressure group is so strong. Claudio Ranieri’s recent departure was probably the first time ever that the fans have not fired a manager. And this makes it difficult to run things sensibly.” So it’s no surprise he blames the hiring and firing of managers during his tenure on them.
Given Wright’s problems with QPR, you might think he’d rate football a complex business. But it still strikes him as being remarkably simple. “It’s not brain surgery – it’s pretty easy really. You need a good manager who looks after the players. The marketing takes place on the football pitch. Having said that, there’s more emphasis now on players’ contracts.”
However, despite raising £12m in a stock market flotation, when the club went into administration they had accrued losses of £27m over four years. They owed £4m to the VAT tax man and creditors, and £11m to Wright who had secured debts using the club’s property.
He also realised late on that there’s much more to a player’s transfer than first meets the eye. “It’s a dishonest business with back-handers going on all over,” he says. “I was not aware to the extent I ought to have been at the time, but the whole bung process is rife in football.”
If he had his time again, Wright feels he would probably be more hands-on. But as he says: “The main thing in my life is Chrysalis. Without a healthy Chrysalis I couldn’t afford something like QPR anyway.”
He remains a QPR fan and likes to go to games occasionally, but the circumstances had changed when he returned recently. “The existing board refused to let me sit with them,” he says. “I’m not supposed to be their friends – I’m more the anti-christ, as far as fans are concerned – so they made me sit with the opposition directors.”
It’s probably a reference to his other main disappointment – Chrysalis’ internet investments. Overall, the company made a £27m loss on attempting to build or back successful dot coms and ultimately only one investment made a profit. “I never wanted to do any of the internet investments we did anyway,” he says. “But we raised money specifically for internet ventures and there was a feeling that unless we spent it on that, the City would have been very unhappy. But actually, in hindsight, they might have been happier if we’d said we’re not going to do it and are instead going to establish another radio station.”
Wright decided against using his right to veto, and instead went with the consensus. He still holds a significant stake of 28% in the public company – more than enough to maintain a reasonable say in what direction it heads in. “If it happened again then I’d say that, in my view, the business is best served by saving the money and that it would be better spent elsewhere…and that’s that.”
When it comes to the City, you get the impression he doesn’t waste much time worrying about forecasts or the share price, which is not to say he won’t do what’s necessary. Instead, unlike many public companies, Chrysalis is run as it sees fit and a strong performance in the Square Mile should simply be a positive by-product of a successful business. “You can make a huge mistake in trying to second guess the City. They’re there to make money and have a responsibility to the client base. Our focus is building and running businesses, not worrying about the City. I’d much rather the share price was going down but know the company is healthy than the other way around.” And it’s an approach that, give or take the odd failure, has worked so far.
www.growingbusiness.co.uk/chrysallis-chris-wright.html
