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It has been 2 weeks since the Scarlets announced a surprise investment deal with the US based House of Luxury LLC. The news caused massive waves in Welsh rugby and social media was rife with speculation, rumour and accusations directed towards the new investors and their leaders. Since then, there have been multiple interviews and Q&A sessions with the people involved in the deal. Now, we have some answers…
House of Luxury are an American company specialising in facilitating the purchase of luxury items discreetly for high wealth clients. In their own words, they find ‘toys for rich people’ even if those items are not publicly for sale.
They say that discretion is a vital part of their business model, to the point where it is understood that their very public foray into Welsh rugby has already cost them clients who value discretion as a top priority. This has caused them to now partition their company into ‘House of Luxury’ and ‘House of Sports and Entertainment’ - the latter of which is the one which is officially involved in the Scarlets.
The House of Luxury CEO is Kirsti Jane, a self described ‘unconventional’ entrepreneur who has created many companies throughout her career. She lives in Wales and speaks Welsh. She has been the most publicly visible member of the investment team, along with House of Luxury ‘Chief Experience Officer’ Simon Kozlowski. He is a South African from Durban and was present for the Scarlets vs Sharks match in the URC last season, by which point the negotiations between the two parties were already several months in.
The money House of Sports and Entertainment are investing into the Scarlets comes from the profits made by House of Luxury. According to Kozlowski, these profits are several times larger than the Scarlets annual operating budget.
House of Luxury are not a publicly listed company in the UK meaning their annual accounts cannot be looked up on the internet. There is a ‘The House of Luxury Ltd’ on companies house, but this is not affiliated with the company that is investing into the Scarlets. House of Luxury are under no legal obligation to disclose how much money they have.
It is confirmed that House of Sports and Entertainment funds have already been invested into the Scarlets and that they have already assumed the Scarlets’ liabilities - ie they are paying their debts.
The Scarlets current board remains in place, their CEO is Simon Muderak and their General Manager is Jon Daniels. Both of these people have already been in place for many years at the region. House of Sports and Entertainment have assumed control of non-rugby activities and they are reporting into the Scarlets board. Initially, their work will mainly focus on marketing, promotion and securing more sponsors.
The other names most mentioned in the story of this investment are David Moffett and Dan Biggar. Neither of these two are on the Scarlets board and will have any say in the day to day running of the region. Moffett will oversee a portfolio that goes well beyond just the Scarlets. Biggar’s role is ambassadorial only, he will not be making decisions for the region.
The thing that the Scarlets have that House of Sports and Entertainment want to exploit is their stadium, Parc y Scarlets. In their view, the Parc is underutilised as an events venue and they want to explore that opportunity. They want to bring events such as more rugby matches, football matches and music concerts to the Parc, which currently does not happen. Their business plan for the Scarlets is contingent on being able to make these things happen.
The Parc is not fully owned by the Scarlets, as they are still paying off a Carmarthenshire Council loan that funded its construction. House of Sports and Entertainment are not in a position to buy the Parc. What they plan to do is invest in the facilities such as new floodlights, PA system and a 4G pitch - a necessity if the stadium wants to become a multi-purpose event.
House of Sports and Entertainment say they are not planning for any eventuality other than the continuation of professional rugby in Llanelli. They are not interested in a merger with another team and say they are highly motivated by preserving the Scarlets’ history and their brand.
However, they have not yet taken any equity in the Scarlets and any investment into the facilities is entirely dependant on them serving the WRU restructure. They say they will not offer anyone certainty or false hope. They will remain in their current role as off-field contributors only until the future of the Scarlets is understood.
In their announcement of the investment deal, the Scarlets said House of Sports and Entertainment will offer leadership and legal guidance through the WRU’s consultation period. It was revealed last week that both the Scarlets and the Ospreys have opened legal proceedings against the WRU whilst there are rumours the Dragons are also prepared to do the same. It is not know if House of Sports and Entertainment are involved in these proceedings.