Government aware of Jersey Reds' debts before signing off major £370,000 grants, emails show

• The large chain of emails shows how senior government officials discussed financial issues with Jersey Reds' board in the months before the club went into administration

Jersey Reds were on the verge of administration in January 2023, eight months before it ceased trading, emails sent between the club and the government show.

Nearly 100 pages of correspondence uncovered by an ITV News Freedom of Information request reveal the rugby team was viewed as "not commercially realistic" by senior government figures and there was "limited sympathy for a private club chasing their dream" of promotion.

Despite these warnings in January 2023, Jersey's government still gave grants of £370,000 to the Championship-winning club between July and September of that year.

The side would cease trading in late September and officially go into liquidation in October 2023.

January 2023

The first email exchange covered by the Freedom of Information request is from Mark Chown, the director of a company which sent funding to the club.

He wrote to Jersey Government's former Chief Executive Officer Suzanne Wylie on 23 January stating the club had not secured the number of investors that it hoped for and one investor was warning of pulling their money for that month.

"This leaves a major problem," Mr Chown wrote and left them on the edge of administration. 

He added: "Should a total of 220k funding not be received by end w/c 30.1.23 and of that 110k by 31.1.23 ... then the business will be trading whilst insolvent and the directors will have no option, unless another solution is found, than to seek administration."

Discussing the issue with government officials, Ms Wylie stated: "This for me is a decision on whether Jersey wants a professional rugby team ... it would be almost impossible for them to be self-sustaining I would imagine." 

A response was drafted to the letter informing the club they would not be getting a grant. 

In the drafted email, they mention the reduction in funding across the Championship and suggested the club need to "cut their cloth accordingly and manage the business to a budget".

It added: "The ambition of Jersey Reds is not commercially realistic."

February 2023

On 2 February, a civil servant emailed the then Sports Minister, Deputy Lucy Stephenson, stating that government support was unlikely "particularly in light of their misguided strategy" and "inability to budget".

The club did not go under in January. An email from the club to the government in February stated: "We continue to manage cash flow as best we can and secured payments from existing investors to meet the January payroll.

"We continue to meet with other new investors and are hopeful of signing them to our project."

June 2023

In April, the club had their greatest triumph, winning the Championship. ITV News understands this was an overperformance for the team and came earlier than they had planned for. 

But only two months later, the club again asked the government for money. 

An email dated 23 June from a civil servant stated that Mr Chown had called him saying without government support, "there is a high probability [he indicated 99%] that Jersey Reds will go into administration next Friday [30 June]."

The civil servant added: "At the present time, he is unaware of any other funding solutions that will mitigate the issue".

The government response to this in private was highly critical of the club. 

One email states: "We now just need the Reds directors to recognise the meaning of sustainable and to stop targeting a league that offers them nothing". 

Despite these internal warnings, the government still backed the club to the tune of £370,000 from July to September.

September 2023

At the end of September, the club announced that it may need to go into administration after not being able to pay player's wages.

That was confirmed in early October with Grant Thornton appointed as liquidators. 

At the time it was revealed the company owed £3.1 million to creditors.

In an email earlier that month, the man who now has responsibility for sport, Constable Andy Jehan, said to colleagues: "One has to ask how we have actually paid out money this season?

"The directors appear to be at risk of having knowingly issued contracts that they can't fulfill as it clearly isn't a going concern."

ITV News has contacted Jersey's government and the former Chair of Jersey Reds, Mark Morgan, for comment.

During a States' meeting in October 2023, Deputy Stephenson was asked to justify the funding of the club.

Her response: "The emergency payments were given at what we recognise was a difficult time for the club and were designed to prevent an unstructured collapse of Jersey Reds.

"We were very conscious that there were people's jobs and livelihoods depending on these wages."