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USA Rugby board of director Chad Keck has been removed from his post on the Rugby International Marketing board. RIM leadership met Friday in Las Vegas to discuss the fate of the troubled company, and the decision was made to shakeup its composition.
Going forward, USA Rugby’s CEO will serve as the chairman of RIM’s board. For now, that means outgoing CEO Dan Payne sits atop RIM’s board. That keeps USA Rugby’s representation at two members. Pam Kosanke still serves as an independent board member, and the Rugby Football Union and CSM Sports & Entertainment have one seat each.
One of the major breakdowns with the old structure was the ambiguity of the role for USA Rugby’s top executive. USA Rugby owns the majority of RIM, but the CEO didn’t have any formal or official capacity within RIM, the body charged with topping off and growing USA Rugby’s coffers. This change aligns the union more closely with its commercial arm. Keck will continue to serve on USA Rugby’s board.
The transition comes as The Rugby Channel enters its most challenging time as a company. Declining subscription numbers and a lack of capital has RIM looking at all options. Multiple potential investors and buyers for The Rugby Channel have come to the table and left. Over the weekend, FloRugby flew to Las Vegas to meet with RIM leaders to discuss acquisition of the property. Without a buyer, The Rugby Channel is in danger of bankruptcy.
At its height last November, The Rugby Channel boasted 11,600 paid subscribers. As of late January, it was down to 11,000. RIM started with $7.5 million in investment, but it has burned through most of that, with The Rugby Channel being responsible for the majority of the depletion.
“We believe there is definitely a business case here, and we’ve believed that from the beginning,” RIM CEO David Sternberg told Rugby Today in January. “What’s transpired is we’ve needed to deploy capital across our business, and although most of it has gone to The Rugby Channel in terms of getting that very capital-intensive business up and running and building a critical mass of subscribers, we know that will continue, so part of this effort to attract fresh capital is to ensure that we have ample runway to get there.”
Since Rugby Today’s conversation with Sternberg and Keck at USA Rugby’s National Development Summit, at least one potential buyer has walked away. When The Rugby Channel was conceived, FloRugby was not operating and NBC Sports Gold hadn’t been rolled out. Those are two competitors RIM didn’t see coming.
With competing consumer options and a struggle to nail down compelling content, The Rugby Channel pivoted to producing more of its own, which is a costly venture. If saved by an infusion of cash, that will likely continue to be a strategy.
“It is a more competitive market than when we entered, so I will say that from that perspective maybe some of the assumptions from the original plan have changed,” said Sternberg.
“Hindsight’s perfect. If we had anticipated those things happening, then maybe we would have taken in more capital in the first place instead of doing it now. We believe in the business. We believe it’s an asset that in the long term is going to have meaningful value.”
Sternberg was brought on as RIM’s CEO after Nigel Melville announced he was leaving for the RFU. Originally, Sternberg acted as a consultant while RIM was building The Rugby Channel, and Melville was meant to step down from his role of CEO of USA Rugby and transition into the same role at RIM. Sternberg was named interim CEO in 2016, and the next year the interim tag was removed. He was hired largely because of experience in the broadcast business, having served as an executive for both Universal Sports Network and Fox Sports.
"David has led the creation of TheRugbyChannel.tv, which we successfully launched in April," said Melville in the press release announcing Sternberg’s hire. "He knows RIM, our strategy and our considerable value to media partners, sponsors and the global rugby community. His appointment as CEO will help continue RIM's operating momentum and will guide it to further success."