2023-10-15 07:47:00
Although they are convalescing after two years of sporting distress, the players of the XV de la Rose have, this Sunday, a great opportunity to reach the semi-final. We still have to defeat the Fijian outsider in Marseille this Sunday, who defeated them in their Twickenham den (30-22) last August. This would be the only bright spot for English rugby, which has been plunged for more than a year into a slump with an uncertain outcome, and which continues to torment it.
Two weeks ago, the general director of the British Rugby Federation (RFU), Bill Sweeney, encountered a rebellion from 30 executives of the body. The senior officers in question had initialed a resolution contesting his leadership and expressed their fears about the finances of the RFU, and more generally those of the entire British oval, considered in danger.
Disastrous evidence in support: the successive disappearances, over the last twelve months, of four elite clubs – Wasps, London Irish, Worcester and most recently the Jersey Reds. The first two mentioned being European rugby institutions. The first tremors begin at the end of September 2022, with the placement in receivership of Worcester Warriors. The holding company which controlled the contracts of players and management was liquidated a few days later by a specialized London court, thus opening the door for them to sign for other teams.
The Midlands club, from which the tax authorities are claiming nearly 7 million euros, is relegated to the Championship (2nd division of English rugby), where it begins the 2023-2024 season. At the same time, in October 2022, it is the turn of Wasps – who have six national titles and two European crowns – to no longer be able to offer the financial guarantees to cover their debts.
Then, in the spring, the press learned that London Irish employees, including players and staff, had not received their pay for the month of April. The American presidency of the Londoners had announced payment delays in advance. According to the media across the Channel, the London club’s debt thus amounted to 30 million euros.
These serial falls then fuel the fear of an endless spiral. Especially since no one is spared. In total, the clubs’ combined losses over the past six years amount to almost £300 million (€340 million), according to figures released by the Premiership. An RFU report estimates losses for the current season at £40 million.
Salaries in the viewfinder
How could the finances of such historic teams have plummeted to this extent? To do this, we must start from the revenue generated by the clubs. As with almost any sport, there are three financial windfalls: ticket revenue, sponsorship and TV rights. The more attractive a championship is, the more spectators it attracts and the more these sources of income increase accordingly.
However, in the case of English rugby, the health crisis born from Covid-19 suddenly paralyzed a model that was already financially unstable, unlike its French neighbor. The drop in purchasing power, combined with the temporary cessation of the games, generated less revenue. Despite the aid, these clubs found themselves in default of payment.
“This post-Covid period has brought to the surface all the ills that plague the English model, and has highlighted all the problems that were until now below the surface,” said Tony Collins, professor of history at the University of Montfort and author of several works on rugby, including “a social history of the RFU” (A Social History of English Rugby Union, untranslated). Player salaries are too high compared to the income they can generate. This model is not intended to be sustainable. Almost all Premiership clubs have the same problem, which leads to large debts.
The specialist cites the example of the Leicester Tigers, “a club which attracts crowds, but mired in the mismanagement of its salaries”. At the start of 2023, “they had to apply for aid” of 13 million pounds in order to stay afloat.
At the head of the authorities, we blame the previous mandates, guilty of not having been able to capitalize on the dynamic born from the world champion title in 2003. “English rugby is too ambitious. In this way, it is difficult to make sustainable, explains Tony Collins to Libération. Rugby wanted to model itself on football, the model sport in England, but football is unrivaled in popularity around the world, and many people working for English rugby think it can compete with football. It’s a perilous sight.”
Several recovery options
Worried about the situation, the British government launched a parliamentary inquiry in 2022 and seconded independent advisors to propose solutions to perpetuate the model. A bit like he did for football, when he proposed introducing an independent regulator in the face of the unenviable finances of the Premier League players.
The RFU and the Premiership, well aware of the context, had also considered several recovery options. In 2019, they sealed an agreement with the private equity company CVC Capital Partners, which allowed the thirteen clubs with already weak funds to receive more than 200 million pounds and give themselves a little breathing room.
Guided by the same concern for balanced finances, the Premiership had, as such, initiated in June 2021 an expansion of its championship from twelve to fourteen clubs – last season started at thirteen –, while reducing the risk of relegation with a jump-off between the last of the regular phase and the first of Championship (D2). Too late, the maneuver did not have the desired effect. Worse: the rapid disintegration of this model has forced the governing bodies to revise it downwards.
In this case, the RFU has decided to reduce the championship to ten clubs from the 2023-2024 season. This overhaul should make it possible to optimize the calendar, by limiting the number of matches where English clubs are deprived of their internationals. Because, unlike other sports, club rugby continues during international breaks.
This is the case at the moment: Top 14 or Premiership matches take place on weekends, alongside World Cup matches. However, confrontations deprived of the best elements lower competitiveness, therefore the attractiveness of the championship and the economic benefits that go with it. According to the director general of the RFU, Bill Sweeney, this is “one of the major problems” that the sector must address.
On the downside, a schedule cut by six meetings will necessarily lead to a drop in overall revenue. In the English case, this express remodeling offended the broadcaster BT Sport, which did not appreciate seeing its acquisition lose value. The group had negotiated TV rights over three years for around 130 million euros. According to the English newspaper Mail Sport, BT Sport requested a discount of several million.
The league agrees, especially since BT Sport has no real competitor on the market. However, it tries to negotiate at all costs to limit the damage, and to ensure that the benefits are sufficient for the remaining clubs, or even that they are once again able to compete with European teams on the transfer market.
Support funds and federal contracts to the rescue
Other measures have been launched in parallel to help clubs. The RFU and Premiership Rugby jointly established a “support fund to support the most affected players and staff” this summer, as Premiership Rugby chief executive Simon Massie-Taylor announced. The two organizations will also take responsibility for the contracts of 25 English internationals playing in these clubs, as part of a global agreement worth 128 million pounds (a little less than 150 million euros), revealed at the end of September the Sunday Times. Federal contract systems modeled on those already in force in Ireland or New Zealand. The staff of the new coach, Steve Borthwick, will thus be able to supervise them as they wish, in consultation with the clubs.
The objective of the measure is also to prevent the flight of English talent abroad. The recent departures of internationals Jack Willis and the very promising Henry Arundell to the French Top 14 did not really please. A former Wasps player, the first signed up with Toulouse last November. The second signed this summer for Racing 92 from London Irish.
“I’ve said it a few times before, England needs the best players to play in England,” Danny Care repeated during a press briefing at the English base camp in Le Touquet. If there are ways that can help club rugby and help clubs to be more viable, then we can bring the players on board,” continued the 36-year-old scrum-half, under contract with Harlequins. By “fixing” the best players on English soil, he believes, we give value to the championship. “And it’s positive for everything, like TV rights or crowds in the stadiums,” assures the player.
Limited by their salary cap, English teams also risk prioritizing young local players in the future, which is not necessarily bad news for the XV de la Rose. The English hopefuls will have more playing time and will be more quickly predisposed to join the selection. Other avenues to solidify finances exist, such as broadening the audience and reaching new audiences, particularly women and young people. In this regard, a good run in the World Cup would surely not be too much.
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