Nigel Melville's role as director of a for-profit 7s enterprise is posing conflict-of-interest concerns for the chief executive of USARFU.
Grand Prix Sports & Entertainment, which holds an exclusive USARFU sanction that underpins the startup's business strategy, is soliciting multimillion-dollar investments in a Las Vegas 7s competition looking to kick off next fall. Its prospectus presents Melville as if he were a director of the offering, raising the question whether the union is formally involved in the unannounced capital raising.
Gambling, a second major selling point of the GPSE prospectus, creates additional difficulties for the union executive. Many of Boulder's members are minors who may not legally wager, while the pastime is generally disdained by the USOC and the NCAA, from whom USARFU has been struggling to win varsity status for women's rugby.
Melville did not responded to requests for comment.
At minimum, Melville's relationship with GPSE, described by the latter's founder as 'totally awesome and supportive' in a January American Rugby interview, suggests a nonchalant attitude toward those players and coaches, educators and parents who prefer the sports education system to sports entertainment industry. Following rugby's inclusion in the Olympic Games, there have never been more opportunities to access varsity resources for participant, institutional, and commercial growth.
In the business world, investors frequently take seats on a startup's board in order to monitor affairs. Business objectives are complementary and the investor's financial motive is explicit. Straddling nonprofit and for-profit organizations can be more complicated when organizational goals are not clearly aligned or the nonprofit's members have no visibility into the private company's affairs.
'Our exclusive agreement with USA Rugby means that Grand Prix Sports & Entertainment will be the only media company with the rights to create, produce, and broadcast fully sanctioned rugby sevens content,' reads the company's investment offering. 7s matches will 'instantly connect with the coveted 18- to 34-year-old male demo while providing gambling and sports-betting audiences off-the-charts gaming action,' it adds elsewhere.
GPSE purchased rights to USARFU-sanctioned commercial 7s competition in 2005, at a time when previous chief executive Doug Arnot was in desperate need of cash. Three years later, Melville extended GPSE's license to the union's long-established club and territorial national championships as well as a new collegiate 7s championship.
GPSE had been in arrears in making payments, however, and it is not known whether the rights granted in 2008 have lapsed. Melville had not responded to a query, underlining the point that a private company's director may not wish to discuss its business affairs, though they are of interest to the member-supported union.
Simultaneously, USARFU holds an equity position in and receives annual licensing fees from the USA 7s, and Melville also serves on the advisory board of that competition. The USA 7s and the yet-to-launch GPSE competition are commercial rivals.
Interestingly, GPSE and USARFU itself may end up competing for scarce sponsor dollars, as both are looking to sell advertising packages. Pat Guthrie, the longtime congressman from Southern California, is chief revenue officer and president of the American Rugby Football League, the GPSE entity which will govern domestic 7s competitions. (American RFL is different from conventional, 13-a-side rugby league in America, whose governing body is known as American National Rugby League, or AMRNL.)
Grand Prix Sports & Entertainment, which holds an exclusive USARFU sanction that underpins the startup's business strategy, is soliciting multimillion-dollar investments in a Las Vegas 7s competition looking to kick off next fall. Its prospectus presents Melville as if he were a director of the offering, raising the question whether the union is formally involved in the unannounced capital raising.
Gambling, a second major selling point of the GPSE prospectus, creates additional difficulties for the union executive. Many of Boulder's members are minors who may not legally wager, while the pastime is generally disdained by the USOC and the NCAA, from whom USARFU has been struggling to win varsity status for women's rugby.
Melville did not responded to requests for comment.
At minimum, Melville's relationship with GPSE, described by the latter's founder as 'totally awesome and supportive' in a January American Rugby interview, suggests a nonchalant attitude toward those players and coaches, educators and parents who prefer the sports education system to sports entertainment industry. Following rugby's inclusion in the Olympic Games, there have never been more opportunities to access varsity resources for participant, institutional, and commercial growth.
In the business world, investors frequently take seats on a startup's board in order to monitor affairs. Business objectives are complementary and the investor's financial motive is explicit. Straddling nonprofit and for-profit organizations can be more complicated when organizational goals are not clearly aligned or the nonprofit's members have no visibility into the private company's affairs.
'Our exclusive agreement with USA Rugby means that Grand Prix Sports & Entertainment will be the only media company with the rights to create, produce, and broadcast fully sanctioned rugby sevens content,' reads the company's investment offering. 7s matches will 'instantly connect with the coveted 18- to 34-year-old male demo while providing gambling and sports-betting audiences off-the-charts gaming action,' it adds elsewhere.
GPSE purchased rights to USARFU-sanctioned commercial 7s competition in 2005, at a time when previous chief executive Doug Arnot was in desperate need of cash. Three years later, Melville extended GPSE's license to the union's long-established club and territorial national championships as well as a new collegiate 7s championship.
GPSE had been in arrears in making payments, however, and it is not known whether the rights granted in 2008 have lapsed. Melville had not responded to a query, underlining the point that a private company's director may not wish to discuss its business affairs, though they are of interest to the member-supported union.
Simultaneously, USARFU holds an equity position in and receives annual licensing fees from the USA 7s, and Melville also serves on the advisory board of that competition. The USA 7s and the yet-to-launch GPSE competition are commercial rivals.
Interestingly, GPSE and USARFU itself may end up competing for scarce sponsor dollars, as both are looking to sell advertising packages. Pat Guthrie, the longtime congressman from Southern California, is chief revenue officer and president of the American Rugby Football League, the GPSE entity which will govern domestic 7s competitions. (American RFL is different from conventional, 13-a-side rugby league in America, whose governing body is known as American National Rugby League, or AMRNL.)
Guthrie and Southern California officials did not respond to requests for comment.
Related: 7s: Did USARFU sell too cheaply?
Kurt,
If no one is willing to speak to you in regards to a story you are working on... you're just publishing rumors.
Right or wrong... it's irresponsible "journalism".
Posted by: fact | 09 February 2010 at 11:04
"Fact",
With the lack of transparency in today's leadership decisions, and actions on while representing us, nothing could be written if it required comment from Roberts, Melville and Co.
USA Rugby's leadership has been engaged in questionable business practices similar to those mentioned in this story since the Arnot Era, when it all began to go bad for USA Rugby's CIPP dues paying members.
Being "irresponsible" is not calling these people out on deals that they have done while representing us.
Posted by: The trust is long gone. | 09 February 2010 at 12:37
why is it so hard to understand what a blog is? read toffonrugby if you want "good" rugby journalism
& if those identified as having possible conflicts of interest choose to ignore queries about same, doesn't that say more about those parties than Kurts' abilities to secure official "quotes"?
the potential monetization of 7s in the run-up to 2016 olympics seems like a pretty interesting story & may explain why our english cousins have chosen to hang around and spin their wheels at usar.
also, off-topic, but interesting story nonetheless: http://www.dailycal.org/article/108154/at_wit_s_end
Posted by: ecm | 09 February 2010 at 12:43
If I was Nigel Melville I wouldn't either reply to Kurt.
After all, Melville just got caught with his Johnson in his zipper. The Tatham investor prospectus is online, take a look. There is old Nige as a director in a rugby gaming enterprise.
If I was Jon Prusmack the owner of the USA Sevens, I would keep a close eye on Nige.
The rest of us are stuck with the same guys that says youth is the key, now has our organization tied up with this bunch of gambling investors, nice huh?
Posted by: wtf | 09 February 2010 at 13:19
http://www.dailycal.org/article/108154/at_wit_s_end
There is a god afterall :-)
Posted by: Stanford boy | 09 February 2010 at 14:02
Slow down there Stanford Boy,
A couple of years of turf, isn't that bad. The Cal Rugby guys have cut a deal for these unbelievable improvements to Witter Field.
And remember part of this campus construction is that big-ass new High Performance Center the rugby team is included in.
Posted by: wtf | 09 February 2010 at 14:24
Yeah I know, my apologies - just being childish - it just seemed funny at the time!
Posted by: Stanford Boy | 09 February 2010 at 15:51
You Cali folk me laugh.
Posted by: smoke & mirrors | 09 February 2010 at 16:37
yeah....it'll be interesting to see how the university is gonna take a dump right on the chest of Cal rugby when they don't get their field back in 2 years.
Posted by: I think I've got a turtle head pokin' out | 09 February 2010 at 18:28
anyone know if the uscra town hall will be webcast? that would be nice
Posted by: college | 10 February 2010 at 08:28
And I thought that Cal was the model we were all aspiring to emulate, what with Varsity Rugby on their polo shirts and all. Then we find out that reporting to the Athletic Director can have its downside after all. You have to find out from some contractor that your beloved pristine piece of heavenly grass is about to be paved over to make way for more all weather practice space for the football team.
If this is what Varsity Rugby (the varsity model, right?), then I for one want nothing to do with it. This is the shabbiest of treatment by an uncaring administration. Over 100 years of history and unparalleled success just went in the crapper.
And, just as friend Jack is anxious to launch a premier level competition for 32 (or so) of the best division one brands (and rugby programs), he gets to offer home games at Berkeley High or maybe a local park (where is RSL when we need a role model?) to those traveling many miles to play in the best region of the best rugby competition in the land.
Oh what has varsity rugby come to? Sad indeed.
Posted by: Varsity Rugby? Think Again. | 10 February 2010 at 21:50
Cal rugby moves into a brand new high performance center at this same time. What rugby team anywhere in the US will have access to a facility like this not to mention being a core tenet?
BTW, why is playing on high grade fieldturf such a bad thing?
Sad? Having varsity status is sad? The Cal football team is moving off campus to play their games for a year as well, improvements have a way of reorganizing schedules.
I think Cal playing some of their home matches at local high schools is very smart, Cal draws thousands to their matches. Allowing the local high schools to make some money, while Cal recruits their players is very smart.
As for the college premier league, its long over due.
Posted by: fact | 10 February 2010 at 22:02
Varsity Rugby? Think Again,
You say you don't want anything to do with the varsity. Well lets be honest, that decision was made for you in middle school now wasn't it?
Its hard to be the non-athlete kid in the black dress socks, but come on, varsity is sad :-)
Posted by: bobo | 10 February 2010 at 22:10