1
Premiership clubs lost a staggering £88.7million in the two years before CVC buy-in
Lord Myners’ extensive 55-page salary cap review has laid bare the deep financial black hole that exists in the game in England, the report highlighting how the 13 Gallagher Premiership shareholder clubs lost a combined total of nearly £89million in the two years prior to selling a 27 per cent stake to CVC Capital Partners.
ADVERTISEMENT
The Premiership was reputed to have gained more than £200m when it decided in December 2018 to sell a minority stake to the private equity firm, but it has now emerged that this deal was struck at the end of a terrible two-year period which starkly highlights the bleak loss-making going on in the business of top-flight rugby.
Accessing Companies House records, the Myners report outlined how a total of £88,726,373 was lost in 2017 and 2018. A total of £39,243,963 was lost by clubs in the year ending 2017, a figure that worsened to £49,482,410.
Only Exeter managed to post a profit, the Chiefs recording surpluses of £1,143,676 and £909,432 in the two years investigated by the report. That suggests that all other Premiership owners should make a point of visiting Tony Rowe and teasing out exactly how to make a profit in a sport that can’t shake its reputation for losing money.
Some of the individual losses were staggering – Wasps in excess of £14m, Worcester more than £13m and Bristol over £12m. The lowest loss-making club was Leicester, with a £2.1m two-year total. However, that more refined level of bookkeeping wasn’t sufficient when it came to putting the club up for sale last summer in a market that refused to nibble, resulting in the Tigers being taken off the market nine months later.
The salary cap report crucially noted, though, that many of the Premiership club owners claimed not to be overly bothered by their loss-making businesses as owning a rugby club was something they were generally doing in search of glory rather than to make ends meet.
Reflecting on the £88.7m two-year losses, Lord Myners wrote: “These figures illustrate just how dependent many clubs are on their owners or benefactors, normally an individual, for viability and sustainability.
ADVERTISEMENT
“The continuing operations of PRL in its present model depend on the generosity and financial resource of owners. It was clear to me after listening to the owners that many are not motivated by the potential to generate profit from the game, but to compete and win on the field.
“The mentality of many of those individuals is indicative of the unique economics of sport. It also suggests that without regulations limiting their ability to spend more, owners/benefactors who could afford to would spend even more than they currently do in pursuit of victory.
“The effect of the salary cap since its introduction has therefore been to control rising costs for clubs relative to increases in revenue. The cap could be said to act as a safety valve against unsustainable losses.
“However, it is obvious that the uncertain outcome of the current season with all the attending economic implications may change the economics of PRL’s member clubs. Their long-term financial viability was not assured before this moment; it is far less so now.”
ADVERTISEMENT
THE TWO-YEAR PREMIERSHIP FINANCIAL REPORT (2017 and 2018)
Bath Rugby Limited
-£5,715,760 LOSS
(-£2,567,201, -£3,148,559)
Bristol Rugby Club Limited
-£12,478,283 LOSS
(£5,241,823, -£7,236,460)
Exeter Rugby Group PLC
£2,053,108 PROFIT
(£1,143,676, £909,432)
Gloucester Rugby Limited
-£3,387,955 LOSS
(-£1,197,771, -£2,181,184)
Harlequin FC Holdings Ltd
-£11,579,193 LOSS
(-£6,624,239, -£4,954,954)
Leicester Football Club PLC
-£2,174,000 LOSS
(-£938,000, -£1,236,000)
London Irish Holdings Ltd
-£6,561,817 LOSS
(-£3,069,678, -£3,492,139)
Newcastle Rugby Ltd
-£7,442,372
(-£3,164,117, -£4,278,255)
Northampton Saints PLC
-£4,018, 003 LOSS
(-£1,230,295, -£2,787,708)
Manchester Sale Rugby Club Ltd
-£2,528,010 LOSS
(-£818,829, -£1,709,181)
Saracens Limited
-£6,637,570 LOSS
(-£2,750,645, -£3,886,925)
Wasps Holdings Ltd
-£14,428,000 LOSS
(-£4,705,000, -£9,723,000)
WRFC Trading Ltd (Worcester)
-£13,837,512 LOSS
(-£8,080,035, -£5,757,477)
Comments on RugbyPass
What was the excuse for the other knockout blowouts then? Does the result not prove the Saints were just so much better? Wise call to put your eggs in one basket when you’ve got 2 comps simultaneously finishing.
27 Go to commentsReally hope Kuruvoli and his partner rock the Canes.
1 Go to commentsI wonder what impact Samson has had on their attack, as the team seems less prone to trundle it up the middle, take the tackle and then trundle it up again. I lost faith in the coach last year as the Rebelss looked like a 2nd/3rd rate South African team. I also disliked Gordon standing back, often ignored as the forward battle went on and on. Maybe its our Aussie way of not getting off our A***’s until the enemy is at the gate.
83 Go to commentsThanks for the write up. Great to see the Rebs winning, I am a little interested in how they will go against the remaining kiwi teams, I think they’ve only played Hurricanes and Highlanders but how great to see these players performing!! I also see Parling has a job beyond June 30! A good move by RA? Also how do you fix the Rebels previously scratchy defence?
83 Go to commentsbe smart - go black
13 Go to commentsNext week the Crusaders hopefully have Scott Barrett back. Will be great to have the captain back. Hopefully he will be the All Black captain as well.
12 Go to commentsExciting place to be for the young fella. I expected he was French Polynesian when I saw him included in the France 6N squad (after seeing him in NZs), and therefor be strong grounds we might loose him to rugby down here. Good, in that he is good enough to warrant such a profile, and from a journalism’s fan interaction aspect, to finally get a back ground story on the fella. Hope he has settled into NZ OK and that at least one rugby country will fit with him to help his development, which, if so, he should surely continue for a few years, and then that he can experience France to it’s fullest with a bit more maturity and less reliance on family than you would have at his current age. A good 3 or 4 years before he would be ready for International duty if he wanted to wait. Of course he already sounds good enough to accept a call up, and to cap himself, in the more immediate future (he’d have to be very very good in the case of the ABs), and he’ll get a great taste of that being with the Canes who have a bunch who are just a few years further into their career and looking likely Internationals themselves.
13 Go to commentsI remember towards the end of the original broadcasting deal for Super rugby with Newscorp that there was talk about the competition expanding to improve negotiations for more money - more content, more cash. Professional rugby was still in its infancy then and I held an opposing view that if Super rugby was a truly valuable competition then it should attract more broadcasters to bid for the rights, thereby increasing the value without needing to add more teams and games. Unfortunately since the game turned professional, the tension between club, talent and country has only grown further. I would argue we’re already at a point in time where the present is the future. The only international competitions that matter are 6N, RC and RWC. The inter-hemisphere tours are only developmental for those competitions. The games that increasingly matter more to fans, sponsors and broadcasters are between the clubs. Particularly for European fans, there are multiple competitions to follow your teams fortunes every week. SA is not Europe but competes in a single continental competition, so the travel component will always be an impediment. It was worse in the bloated days of Super rugby when teams traversed between four continents - Africa, America, Asia and Australia. The percentage of players who represent their country is less than 5% of the professional player base, so the sense of sacrifice isn’t as strong a motivation for the rest who are more focused on playing professional rugby and earning as much from their body as they can. Rugby like cricket created the conundrum it’s constantly fighting a losing battle with.
4 Go to commentsOh wow… “But as La Rochelle proved in winning in Cape Town this season, a cross-continental away assignment need not spell the end of days.” La Rochelle actually proved quite the opposite. After traveling to Cape town and back they (back-to-back and current champs) got mercilessly thumped the next week. If travel is not the reason, why else would a full-strength powerhouse like La Rochelle get dumped on their @r$e$ one week later?
27 Go to commentsYou know he can land a winning conversion after the full time siren is up. (Even if it takes two attempts.)
5 Go to commentsA very insightful article from Jake. I would love to know how South African’s feel about their move to Europe. Do you prefer playing in Europe or want to go back to Super Rugby?
4 Go to commentspure fire
1 Go to commentsA very well thought out summary of all the relevant complications…agree with your ”refer the Cricket Test versus 20/20 comparison”. More also definitely doesn't necessarily mean better!
4 Go to commentsMust be something when you are only 19 y.o and both NZ and France want you. Btw he wasn’t the only new caledonian in french U20 as Robin Couly also lived in Noumea until 17. Hope he’s successful wherever he chooses to play.
13 Go to comments“Several key players in the Stade Rochelais squad are in their thirties” South Africans are going to hate the implications of that comment!
5 Go to commentsI know Leinster did a job on La Roche but shortly after HT Leinster were 30-13 ahead of them and at a similar time Toulouse were trailing Exeter. At 60 mins Leinster were 27 ahead but after 67 mins Toulouse were only 19 ahead before Exeter collapsed. That’s heavier scoring by Leinster against the Champions. I think people are looking at Toulouses total a little too much. I also think Northhampton are in with a real chance, albeit I’d put Leinster as favourites. If Leinster make the final I expect them to win by more than ten and with control.
5 Go to commentsHey Nick, your match analysis is decent but the top and tail not so much, a bit more random. For a start there’s a seismic difference in regenerating any club side over a test team. EJ pretty much had to urinate with the appendage he’d been given at test level whereas club success is impacted hugely by the budget. Look no further than Boudjellal’s Toulon project for a perfect example. The set ups at La Rochelle and Leinster are like chalk and cheese and you are correct that Leinster are ahead. Leinster are not just slightly ahead though, they are light years ahead on their plans, with the next gen champions cup team already blooded, seasoned and developing at speed from their time manning the fort in the URC while the cream play CC and tests. They have engineered a strong talent conveyor belt into their system, supported by private money funnelled into a couple of Leinster private schools. The really smart move from Leinster and the IRFU however is maximising the Irish Revenue tax breaks (tax relief on the best 10 years earnings refunded at retirement) to help keep all of their stars in Ireland and happy, while simultaneously funding marquee players consistently. And of course Barrett is the latest example. But in no way is he a “replacement for Henshaw”, he’s only there for one season!!! As for Rob Baxter, the best advice you can give him is to start lobbying Parliament and HMRC for a similar state subsidy, but don’t hold your breath… One thing Cullen has been very smart with is his coaching team. Very quickly he realised his need to supplement his skills, there was talk of him exiting after his first couple of years but he was extremely shrewd bringing in Lancaster and now Nienaber. That has worked superbly and added a layer that really has made a tangible difference. Apart from that you were bang on the money… 😉😂
5 Go to commentsNot sure exactly what went wrong for him at Glasgow but it’s pretty clear he ain’t Franco’s cup of tea. Suspect he would have been better served heading out of Scotland around the same time as Finn, Hoggy and Jonny!
1 Go to commentsBulls disrespected the Northampton supporters and the competition. Decide quickly, fully in or out.
27 Go to commentsI wonder if Parling was ever on England’s radar as a coach? Obviously Borthwick is a great lineout coach, but I do worry he might be taking on too much as both head coach and forwards coach.
1 Go to comments