'Player wages are too high... rugby can't afford the squads it has'
Newcastle managing director Mick Hogan hopes the legacy of the grubby Saracens salary cap controversy will be a levelling off in the spiralling player wages paid at the higher end of an English club sport that continues to financially struggle to make ends meet.
The London club have accepted automatic relegation from the Gallagher Premiership at the end of this season after failing to come in under the £7million salary cap for 2019/20.
It follows their punishment in early November of a £5.36m fine and a deduction of 35 Premiership points for salary cap breaches in the three most recent seasons, the last of which ended with Saracens declared champions on a glorious June 2019 day at Twickenham and Newcastle relegated for finishing twelfth on the ladder.
Hogan is satisfied that Saracens have finally been severely punished for their persistent cheating, but the Newcastle administrator fears for the long-term viability of the club game in England due to the increasing levels of player remuneration.
“I hope it means that we start to get player wages under control,” he told RugbyPass when asked what he hoped the eventual legacy of the Saracens salary cap saga would be for the Premiership.
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“Player wages, unfortunately, are still too high. I can see both sides. The players in some respects deserve every penny. When you compare them to other world-class sportsmen, rugby players are underpaid.
“What they have put their bodies through in training every day, it’s an incredible demand. But the issue we have in rugby is that we cannot afford the squads we have.
“When twelve of the 13 Premiership Rugby clubs – I include the current twelve and ourselves as current shareholders – make a loss and have done so for four or five years on the bounce, that tells you the model is broken. In the last five years, there is only Exeter I believe that have made a profit.
This is quite an achievement when you consider the established pattern https://t.co/OKBycTOaCa
— RugbyPass (@RugbyPass) January 25, 2020
“The issue is the squads we have now. We have to have to fulfil so many games and because it is so position-specific and because the injury rates are so high, the squad sizes we have are unsustainable.
“There is only one sport in the world that can sustain squads of 50 to 60 players and that is the NFL. When you get billion pound TV deals you can afford to pay your players the wages they do, but I don’t think on the whole rugby can afford squads with 50 full-time players.
“You look at the losses the clubs made last year – it was over £40m. If you put that in context, to get to break even, to cover those collective £40m losses, you need to sell an additional two million tickets at an average of £20 net of VAT to get to £40m quid.
Managing director Mick Hogan isn’t blaming @Saracens for the trauma @FalconsRugby are enduring in the Championship… but he tells @heagneyl it still leaves a sour taste belatedly finding out a @premrugby rival cheated last seasonhttps://t.co/CfYiZmovYZ
— RugbyPass (@RugbyPass) January 25, 2020
“When you consider we don’t even sell two million tickets between us over the season including the final, what you’re saying is that every club has got to double the size of their support base and I don’t think there is a single club that can do that purely on size of stadiums because there is no club currently at less than 50 per cent of their capacity.
“Gloucester, Leicester, Northampton, Bath are full every week so the only other way then is to double the price of your tickets and again that is not going to happen. If you’re charging someone £40, £50 to sit down now, you are going to have to charge them £80, £90, £100 to sit down and the game will not sustain that.
“What we have got to do is have a look at the other revenue areas and broadcasting would be one, but we have still got to get the costs under control. The challenge out there is you have got market forces dictating that the players are worth a certain amount. Those market forced are Top 14 and other leagues around the world.”
WATCH: Andy Goode and ex-club boss Brendan Venter get into a heated debate on The Rugby Pad over Saracens salary scandal
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