There is never a dull day in Welsh rugby. The latest saga is the proposed majority acquisition of professional rugby region the Scarlets by Montana registered and off-market luxury asset broker, House of 海角视频 Group (HOL).
The company, under its founder, chief executive and chair, Kirsti Jane Baker, 36, who hails from Pontypridd, has taken over non-rugby operational control of the club via its new sports and entertainment division.
We should know this week from the WRU its plans for restructuring the professional game, with the likely outcome that the current four regions will be reduced to two (one in the west and one in the east) or three.
Both the Scarlets and the Ospreys opted not to enter into a new funding agreement with the union (Professional Rugby Agreement 25), for several reasons — including concerns over the WRU’s acquisition of Cardiff Rugby out of administration (although it is seeking to sell it back into private ownership), and effectively becoming its benefactor to plug trading shortfalls.
The Dragons and Cardiff will now see a significant uplift in funding from the union over the next three years and a reduction in passed-through union debt from NatWest — with their PRA 23 deals being prematurely superseded by PRA 25.
The owners of the Dragons, who include David Buttress, were always going to sign, taking the position that the most important consideration had to be the interest of staff and players and the viability of the business.
The former board of Cardiff, before the club collapsed and the acquisition of its assets out of administration by the WRU, were also minded to sign. Like the Dragons, while there were some aspects of PRA 25 they were not happy with, they were not going to turn down down increased funding from the union and reduced debt.
Having not signed, the Scarlets and the Ospreys remain locked in the financially inferior PRA 23, which will now continue to run until July 2027. This puts more pressure on the boards of the two regions to increase benefactor support.
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The proposed deal from HOL, through its new division House of Sports & Entertainment, comes as the Ospreys have struck a rental agreement, in principle, with Swansea Council at what will be a redeveloped St Helen’s ground in Swansea, where they intend to play from the 2026–27 season. They will have a temporary home for the coming season at the Brewery Field in Bridgend.
The two were regions were understood to be considering a joint legal challenge against the WRU citing a unfair master and servant type relationship. How the Ospreys now feel about their rivals just over the Loughor Bridge, in what could be seen as an attempt to steal a march on them in terms of future security, is not clear.
But why strike an option to acquire a 55% share of a club whose future is far from certain? HOL's chief experience officer Simon Kozlowski said it has no interest in a merger with the Ospreys and its focus is solely on the Scarlets.
Chairman of the Scarlets, Simon Muderack, and fellow board members like Nigel Short would no doubt have undertaken detailed due diligence to give surety on the financial position of HOL, the source of its income and possibly formal notification from its bank(s) that it has the necessary reserves to invest long term into the club.
What we seemingly have at the moment is that HOL has entered into a management contract with the existing board and has invested some initial capital. while it works towards a majority ownership stake.
HOL, in its statement, said it had taken on liabilities of the club. It is understood that the WRU, which has had no previous interaction with the business, was informed by the board of the Scarlets only shortly before they issued their statement. Around half of the club’s revenue still comes from the WRU.
Under PRA 23, or any future funding deal, it would need to conduct its own financial and fit-and-proper test — as any sporting governing body would. This would also be insisted on by NatWest if HOL is to take on the debt provision liability arranged by the union and passed through to the club, as well as by Carmarthenshire County Council with its loan exposure.
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The WRU would also need, as it would with any assessment of a takeover of a Welsh club, to understand the source of HOL’s income stream and information on its clients.
This could be done via a professional advisory firm acting on behalf of the union. If HOL wants to acquire majority control, the WRU would also require the onshoring of liabilities to a 海角视频-based entity underpinned with personal guarantees.
The issue with the collapse of Cardiff Rugby was that, when it came to the crunch, its former benefactors Neal Griffith and Phil Kempe were unwilling, as required under their ownership deal with the former board of the club and the WRU, to finance trading losses.
The benefactor condition was not given in their personal capacities, but via a special purchase vehicle set up to acquire Cardiff Rugby — Jersey-based Helford Capital. It was a company with no assets. That is why the WRU would want a tighter commitment from HOL.
The WRU will now determine what triggers their own financial and fit-and-proper person test. Is it the point we are at now, where HOL has an option to acquire 55%, or when they exercise that option? That position is being clarified by the WRU. HOL are also fully aware of the union’s due diligence requirements and are aiming to work with them towards what they hope is a successful conclusion.
Outside of listed entities, company law in the US is far less stringent than in the 海角视频.
While HOL was registered as a limited liability company in Montana last year, it doesn’t have to publish financial accounts or details of its ownership structure. The only directors listed are Ms Baker and Nadine de Zoeten. What is not known is their respective equity positions, or whether there are other investors in the business.
The limited information available in the public domain includes a trading address, which was a residential address in Calabasas, California, before last week being changed to an office address in Montana, where it was incorporated.
However, Montana is not where it conducts its business. Deals can be struck anywhere, through mobile phones or laptops, by connecting high net worth sellers and buyers.
Montana is more opaque than other US states on publicly available private company data and is often seen as America’s onshore version of the British Virgin Islands. There are though other US states, mostly Republican, with similarly light-touch business registration requirements.
Montana registered
HOL was registered in Montana as a limited liability company, which benefits from the fact that owners are generally not personally liable for the debts of the business.
Now, I am not implying that HOL is not what they say they are: a nascent off-market broker for luxury assets that has had a stellar financial start with projected strong exponential growth.
The question is: surely there are better ways to make a return on investment than owning a club in west Wales? The track record of professional rugby — and this extends to England — is an almost universally loss-making picture, with clubs requiring significant benefactor financial support.
Perhaps HOL believes it has the “magic sauce” to break this seemingly commercial doom loop?
However, west Wales is one of the most deprived parts of the 海角视频, with relatively few large corporates with big marketing and sponsorship budgets (although HOL could seek backing from businesses regardless of location).
In its last financial year to June end, 2024, the Scarlets had a turnover of £11.34m, of which £5.5m came from the WRU. It posted losses of £2.59m with net liabilities of £6.1m, with loans and borrowing due after one year of £9.8m.
It generated £1.5m in sponsorship, an area HOL will look to drive. As HOL are not at liberty to disclose their financials, this invites legitimate questions. They are seeking to acquire not just a business, but a rugby club with a rich heritage and affinity with fans far beyond Llanelli and its immediate hinterland.
The only insight we can glean on financials is from a recent interview my colleague Steffan Thomas conducted for WalesOnline, where Mr Kozlowski disclosed that HOL generates five times the Scarlets’ total annual budget in profit quarterly.
If we take last year’s revenues of £11m, that equates to a profit of £55m, annualised at £220m.
As a broker they would work on an agreed commission for assets sold. Let’s assume an average brokering fee across asset classes of 5%. A generated quarterly profit of £55m would require sold assets worth more than £1bn.
On LinkedIn, the ebullient Ms Baker talks of seeking to sell assets this year — including sports clubs, hotels, and luxury cars — worth around $5bn.
If you are selling a £100m yacht for a wealthy client, and let’s assume a 5% broker fee, that is a gross profit of around £5m. It would only need around 10 similar deals in a quarter to get to £55m. HOL operates in a market with potential for high returns, with relatively low costs beyond people.
Through a private fans group two years ago, Mr Kozlowski floated the idea of HOL potentially acquiring Pontypridd RFC. However, according to director of the club, Mark Rhydderch-Roberts, it didn’t receive an offer through direct normal channels or business advisory intermediaries. He said: “Obviously we would talk to any potential investor looking to back the club, but no offer was made to the board from House of 海角视频, a company we know nothing about.”
From Pontypridd to global broking
But what of Ms Baker, who isn’t shy in talking up the strong trading performance of HOL on LinkedIn, while also refreshingly opening up about previous wellbeing challenges and business failures.
In an interview last year with Leaders Perception magazine, she said she left school without any qualifications before she turned 16 and became pregnant at 18. She was sacked from her first job after being told she didn’t have the skills to sell.
Before setting up HOL she ran Monaco-based luxury car broker House of Motorsports Agency. She has also written a number of business-related books.
Her early business career, with her husband Lloyd, saw them set up a number of 海角视频 businesses.
According to Companies House, their first was called Extreme Cage Fighting registered from from an address in Pontypridd in November 2009. They voluntarily struck off the business from the Companies House register in April 2011.
They then set up a wedding venture called Simply Charming Events in 2010. They terminated their appointments as directors in November 2011, a month before an application to strike the company off the register. It was finally dissolved via a compulsory strike-off lodged by Companies House in July 2014.
She has also been a director in now dissolved businesses Pink Dolphin Companies and Rise Companies, both registered from the same address in Truro, which were both compulsorily struck off the register in November 2019.
Another business, KLB Group, established by Ms Baker and her husband last October, was issued with notice to be struck off in July unless it changed its registered address from a PO Box address within two months
During the pandemic, and following flooding in Pontypridd, they set up the Baker Wilkins Foundation in 2020, to provide grants of up to £10,000 to support businesses, as well as mentoring, to get back on track. It didn’t seek the VAT exemption benefits of being registered as a charity.
The only publicised grant support it made — and yes, there could have been more — was £3,000 to Energie Fitness in Pontypridd, which was used by its owner Jake Budd to acquire new gym equipment.
In 2021, the foundation won an award in the Not for Profit Organisation Awards in the Best Business Funding Support Foundation category from Acquisition International, owned by AI Global Media Ltd.
Like many in business, Ms Baker says she has learnt from past mistakes.
In a recent LinkedIn post she said:“Some people who know me will say everything I touch turns to gold. That’s generous, but it’s not entirely true. I’ve had my fair share of things that didn’t work out, most of them when I was in my early 20s.
“That doesn’t diminish a single thing I’ve built since. People who know me, who’ve worked with me, partnered with me, trusted me with their rarest and most prized assets, will tell you I’m the best closer they’ve ever met.
“People who don’t know me? They’ll judge from a distance, based on old chapters, public records, or narratives that don’t even scratch the surface of what I actually do. That’s the thing about operating off-market. It’s not designed to be understood by the masses. It’s designed to deliver results in a world most people will never see.”
Will the planned takeover of the Scarlets by HOL prove one of the best things to happen to the club — while nothing could eclipse Llanelli beating New Zealand in 1972?
As it stands there are many unanswered questions about the proposed acquisition. However, it is good to see that Ms Baker and the Scarlets board will be engaging with the most important stakeholders in all of this — the Scarlets fans — at a special meeting at Parc y Scarlets this week.