I am writing to all staff to put them on notice that the Directors have decided to carry out a full appraisal and review of the World Snooker Limited’s (WSL) organisation, operations and staff levels.

Background

In June 2010 the structure of WPBSA and WSL changed significantly; WSL is under new ownership and operates as an independent entity which now has sole responsibility for the promotion and exploitation of all World Snooker tour events. WSL has obligations in respect of guaranteeing certain minimum levels of Prize Money to the tour players and delivering certain services to the WPBSA.

In an attempt to reinvigorate interest in snooker (from TV broadcasters, sponsors, the general public and players) and to comply with our contractual obligations to the WPBSA the last year has seen the introduction of a large number of new tournaments. This has led to an increase in activity but by and large the additional tournaments have been unprofitable. This requires us to consider how we may operate more effectively.

The BBC renewed their contract with us for a further three years with effect from 1 July 2011, but they did so by reducing the number of tournaments they broadcast to three per annum (from four per annum under the previous contract) and at the same time reduced our rights fee income by 25% (from £4m to £3m). This alone gives us one less event to exploit and a £1m shortfall in revenue in each of the next three financial years with the future of a BBC contract beyond that point being uncertain.

Business position and cost savings

Over the last year we have made some changes to the way WSL operates. However largely the approach adopted by the Directors has been to observe and leave existing practices and operations as they were.

That being said, notwithstanding an early decision to reverse the 10% pay cut imposed by former management, we have made concerted efforts to reduce our operating costs and some considerable expenditure savings have already been made.

Even after these cost savings and due to the loss of TV rights fee income referred to above the latest budgets for the year ended 30 June 2012 show a deficit in the region of £300,000. This fact combined with the inevitable problems associated with finding new sponsors in an economic recession mean that alternative income streams and substantial further cost savings will have to be found to enable the company to return to profitability and ultimately survive.

Whilst the company must have regard to the need to retain the balance of skills and experience to meet the future business requirements, we must also review the skills we require taking into account the way in which we work, the increasing use of technology in communicating with players, tournament organisers, sponsors and the general public.

This letter introduces a period of review and consultation. It seems likely that the need to increase effectiveness, reduce costs and review skills, will lead to change, which will in turn lead to redundancies.

We do not have a concluded view of the numbers of redundancies that could result from this process or the areas of the business that may be most affected. Therefore, initially everyone should consider themselves at risk of redundancy. As you will see, it is our intention to develop a proposal within the next three weeks, enabling us to identify those at continuing risk.

Our plans will take account of your comments and you will be informed as these evolve.

Voluntary redundancy or early retirement

In the circumstances it is appropriate to ask any employee who wishes to apply for voluntary redundancy or early retirement please to contact me as soon as possible. WSL will consider such applications. However it reserves the right to reject any applications, particularly if it considers that it is in the long-term interests of WSL to retain certain employees. WSL may still have to make compulsory redundancies if it does not receive a sufficient number of appropriate volunteers or the review indicates that other redundancies are required.

WSL will offer the following terms to those taking voluntary redundancy:

• Notice pay (all or some of which may be worked) plus any holiday pay due, plus
• Statutory redundancy pay, plus
• An ex gratia payment at the rate of £500 per week, based on  1 week’s pay for each completed year of service where your age was under 41 and 1.5 week’s pay for each year of completed service where your age was 41 or above.

Process

This review process is intended to enable WSL to discuss your views on how we can achieve the objectives identified above (improved effectiveness, cost savings and relevant skills), and explore ways of avoiding compulsory redundancies (such as offering alternative employment, if any exists). The process will cover the roles of the entire company and will not be restricted to any particular department or functions although the future needs of each department and our obligations to the WPBSA will be taken into consideration in the assessment.

I am asking Elaine to book time for me to meet with you during the first three weeks of this month.

WSL intends to be in a position to publish its plans on proposed structure and skills by 1 July at the latest. These will take account of the comments gathered from you in the review process and discussions with the Directors of the Company.

At the same time we will firm up on potential redundancies, in anticipation of further meetings with those (if any) at continuing risk of redundancy.

Where practicable we will consider redeployment as a means of avoiding redundancy.

The intention is to give all staff ample opportunity to contribute fully to the consultation process. It is for this reason that I explain the context and objectives we have from this process, driven by our determination to build on recent achievement and to make the most of the real opportunities available to WSL and the WPBSA.

I enclose an appraisal questionnaire with this mailing which will be used as the basis of individual consultation interviews with each member of staff. At these individual meetings staff shall be entitled to be accompanied by a friend or colleague should they so wish. You will be informed of your interview time and date shortly. Please can you return the appraisal questionnaire to me by email no later than 24 hours before your interview.

You will be given the opportunity to contribute to the process by making suggestions on how the Company could be run more efficiently. These suggestions can be made either during formal group discussions convened for the purpose or during the individual consultation meetings.

The following factors will be taken into consideration in the redundancy selection process:-

• Skills, experience and aptitude for the work
• Standard of performance
• Attendance (excluding any disability-related absence)and disciplinary record
• Flexibility/ adaptability
• Length of service

WSL wishes to understand clearly your skills and each member of staff at continuing risk of redundancy will be assessed in light of the roles required under the reorganised business.

We do not propose to have a long drawn out process and, having, during the week ending 1 July, published the structure and identified those at continuing risk of redundancy, we intend to carry out any further consultation to conclude the review no later than 15 July 2011.

Any compulsory redundancy payments will be at a level which will be no lower than the minimum basic award for statutory redundancy payments which are calculated according to the standard formula based on length of service, age and weekly pay (capped at £400).

Following the conclusion of this process any of those whose roles are declared redundant will have an opportunity to appeal the decision by having a personal hearing with the Chairman of WSL.

We apologise for having to take this course of action and appreciate that the period of review will be unsettling and any redundancy stressful. Hence the wish to consult as fully as possible, while keeping the period of greatest uncertainty short. The company will provide support by allowing employees whose roles are selected for redundancy (if any) reasonable time off on full pay in order to find a new job or to arrange training.

Yours faithfully

Steve Dawson

Director

For and on behalf of World Snooker Limited