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.

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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. 

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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. 

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“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.”

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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)

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