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.
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.
“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.”
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
$950k for a Prop that isn’t fit enough to play 10 mins of rugby? Surely there is someone better to replace Big Mike with
2 Go to commentsFour Kiwis in that backline. A solid statement on the lack of invention, risk-taking and joy in the NH game; game of attrition and head- banging tedium. Longterm medical problems aplenty in the future!
1 Go to commentsGood article, I learnt quite a lot. A big sliding door moment was in the mid 00s when they rejected Steve Anderson's long term transformation and he wrote Ireland's strategy instead.
2 Go to commentsHi Dr Nick! I'm worried that I've started to enjoy watching England and have actually wanted them to win their last two games. What would you prescribe? On a more serious note, I've noticed that the standard of play in March is often better than early February. Do you think this is because of the weather or because the players have been together for longer?
10 Go to commentsMy question in all this brett is who is going to wear the consequences of these actions? Surely just getting the sack isn’t sufficient? A teenager working the till at woolies would probably get taken to court if they took $20 out of the till. You mean to tell me that someone can spend $2.6 million and get away with it? Where was it spent? What companies/people were the beneficiaries etc? How is it just being talked about as an ‘oopsie’ and we all just move on and not a matter of the court for gross negligence, fraud, take your pick…
18 Go to commentslove Manu too but England have relied on him coming back from injury for far too long and not sorted the position with someone else long term . It will be a blessing he has gone . Huge shame he was so injury prone . God speed Manu .
3 Go to commentsI agree with Ben Smith about Brett Cameron. The No. 6 position has to be a monster and a genuine lineout option, like Ollivon, Lawes (now Chessum), Du Toit, etc. The only player who fits that bill right now is Scott Barrett. A fit and fizzing Tuipolotu together with one of the young towers, Sam Darry or Josh Lord, would give Razor the freedom to play Barret at 6.
16 Go to commentsOutstanding article, Graham. Agree with all of it. And enjoy the style of writing too (particularly Grand Slap!).
2 Go to commentsI wouldn't pay a cent for that loafer. He just stands around, waiting for play to come his way. He won't make the Wallabies.
2 Go to commentsGood bit of te reo maori Nic. Or is that Niko or Nikora? On the theme of trees the Oaks v Totara. Game plan would be key. I have one but it would cost you.
10 Go to comments> Shaun Edwards’ You should not have to score 30 points to win a game, as exciting as it is. This statement was surprising to me. It is nonsensical .I guess it is a defence coach speaking. But head coach, defence and attacking coaches all work together. They are inseparable. You score more than the opposition to win. It only needs to be one score. You score whatever the game demands, whatever the opposition demand. You defend whatever it takes. The attack coach needs to be able to clock up 30pts if need be.
10 Go to commentsWho’d have thought, not having Farrell & Youngs kicking the ball at every possible opportunity and playing flat and allowing your centres to run and pass would pay off? No one could possibly have seen this coming. FML. It took a LONG time coming but at least that time has finally come. England need to find a backup to Lawrence. Freeman is the best candidate for me, I see no reason why he can't play 12. He's big, strong, fast and has great hands.
10 Go to commentsLove Manu but he's not the player he was and I imagine Bayonne have paid too much money for him.
3 Go to commentsNew Zealand have not beaten England since 2018 and even that was a pretty close shave.
1 Go to comments“a renewed focus on Scottish-qualified players” Scottish-qualified is another way of saying English. England has development more players for the Scotland national Rugby team in the last 4 years, than Scotland has.
2 Go to commentsThis sounds a lot like the old Welsh rugby proverb “Wales never lose. Other teams just score more points.”
5 Go to commentsFinally,at last, Borthwick has done what the whole of England have been crying out for. Ditch the kick chase and let the players have freedom to attack and run with the ball. It was great to see. Ford played really well and for the first time in ages was 5 yards closer to the gainline which then allowed a more attacking position . Pity it has taken 90 odd caps to do so. However, this has to continue and not be a false dawn . One issue. Marcus. With Ford having one really good game in 5 ,is he the answer long term . Smith puts bums on seats and is terrific to watch . How can you leave him out before he departs for France in disillusion . England are in danger of Simmons , Alex Goode , Cipriani , Mercer and now Smith being unable to get a selection ahead of “favourites” of the management regardless of form . Great to see England play so well .
2 Go to commentsCockerill was an abrasive player in the mould of a Georgian front rower who will have the respect of that pack. Looking forward to seeing what he can do with this exciting team, hopefully they can send a message to unions like Wales that money alone doesn't buy you wins.
2 Go to commentsI like the look of those July matches. Hopefully they'll get some good tests in November too.
2 Go to commentsThis is a poor article, essentially just trolling six nations teams
22 Go to comments