How worried should we be about Wasps?
Since Saracens exited the Gallagher Premiership last season the salary cap has all-but-disappeared as a discussion item. Of course, surviving Covid – in all senses of the phrase – has quite rightly occupied the soon-to-be 13 English top flight clubs’ every waking moment for much of the intervening period.
But comments made by BT Sport pundit and Wasps Non-Executive Director Lawrence Dallaglio on Times podcast ‘The Ruck’ have recently thrown a new pebble into the salary cap pond.
Reviewing Leicester’s round 22 win over his club the former England No.8 said:
“In the key moments Leicester had a bit more physical edge to their game. They seemed to have more depth in their squad, particularly off the bench.
“It would be fascinating for us all – and I’m not sure we’ll ever get to do this – to truly understand how much each club is spending on wages then write that down in a league table.
“While there is a salary cap in place, and there’s a couple of years in which each club has to fall in line with the agreed cap, there’s also differing amounts being spent by each club.
“I’d be interested to see – versus what they’re actually spending – where the league positions finish.
“It’s pretty clear that Exeter and Bristol are right at the top of that salary cap and spending a lot of money to finish first and second.
“If Wasps are not going to put money into the depth of their squad at this stage then they’re not going to finish at the top of the table, it’s as simple as that.”
With Covid-19 hitting revenue streams hard, Dallaglio’s remarks reflect that some Premiership clubs – including and perhaps led by – Wasps are in ever-deepening financial waters.
And far from struggling to stay within the now-reduced cap, it is entirely likely that the bottom half of the Premiership are slashing costs to stay afloat and as a result will be nowhere near the permitted spending threshold.
To give this some context, failure to qualify for the Heineken Cup and the Doomsday scenario of relegation (should it remain a possibility) are two catastrophic commercial scenarios for any Premiership club.
By contrast, as Wasps’ early time in Coventry showed, onfield success brings a feelgood factor that draws fans to games, sells replica kit and gets the corporate world interested in your product.
I will long remember covering the Black-and-Golds’ Christmas 2016 demolition of Bath for the Coventry Telegraph surrounded by 31,600 excited fans including families, women and children.
As Christian Wade ran in a brilliant hat-trick, and the Ricoh revelled in watching Kurtley Beale, Willie le Roux, Elliot Daly and Danny Cipriani – not to mention forwards Nathan Hughes, James Haskell and Matt Mullan – it was electric.
Lesser players – or more accurately a squad with some high-quality players but fewer of them and much less supporting depth – makes success less likely and this type of big revenue-earning occasion an infrequent possibility.
As a consequence, matchday earnings inevitably suffer. But perhaps more ominously this approach also positions a club dangerously close to a cliff-edge over which no owner wants to peer.
It seemed ridiculous in October to suggest that the 2020 Premiership finalists would struggle to qualify for the Heineken Cup – but Wasps scraped in on the last day of the 2020/21 season.
With Joe Launchbury and Jack Willis both injured, then likely to be absent with England, it must cross the minds of the Wasps board that another tough season might follow. It is therefore impossible not to see their thrifty approach to recruitment as an absolute last resort.
In the 2016/17 season Wasps were fined for overrunning the cap by a small amount following a financial planning error. Suffice to say, there is little danger of history being repeated five years on.
Should anyone doubt the scale of the change taking place at the soon-to-be Coventry Building Society Arena, consider the big-name players who have left and arrived since the club’s appearance in the 2017 Premiership Final.
Left: Kurtley Beale, Danny Cipriani, Jake Cooper-Woolley, Elliot Daly, Kyle Eastmond, James Haskell, Nathan Hughes, Ashley Johnson, Sam Jones, Willie le Roux, Matt Mullan, Will Rowlands, Joe Simpson, Will Stuart, Matt Symons, Tommy Taylor, Christian Wade.
Arrived and Left: Kieran Brookes, Juan de Jongh, Lima Sopoaga
Arrived: Malakai Fekitoa, Francois Hougaard, Matteo Minozzi, Brad Shields, Elliott Stooke
After a lean spell following the move from London to Coventry the club’s academy has filled some of this gap through the production of a number of exciting young prospects. The list, which is headlined by Jack Willis, features his brother Tom, fly halves Charlie Atkinson and Jacob Umaga, Tom West and Alfie Barbeary.
All of these plus former Sale back Paolo Odogwu have developed to the fringe of the England side – but on second or third-year post-academy contracts remain significantly cheaper options than the established international names now in pastures anew.
With recruitment that once focused on Super Rugby now being done in the Championship, just how financially hard hit are Wasps?
The table below shows that the Black-and-Golds have reported losses before tax in all but one of the six sets of accounts published since their move to Coventry in 2015. Including depreciation this represents an eye-watering £41.9 million – a figure bolstered by a one-off £12.5 million received in 2019 from CVC for their purchase of PRL shares.
Year End | Losses |
June 2015 | £6.3m |
June 2016 | £9.3m |
June 2017 | £3.7m |
June 2018 | £9.7m |
June 2019 | £4.6m profit |
June 2020 | £11.1m |
Dec 2020 (half-year) | £6.4m |
For Bristol owner Stephen Lansdown this represents small change. However, he is untypical within the Premiership where Wasps boss Derek Richardson was estimated by the Rugby Paper to have an above-average £60 million net worth.
In the interests of balance, it is only fair to point out that Wasps’ changed approach is not all about coping with Covid and trying to reduce trading losses – perfectly reasonable though these objectives are.
Alongside Richardson, who has invested £18.7 million, the club’s main liability which currently sits on the balance sheet at around £34.2 million is within a retail bond secured against the Ricoh Arena. This is due to be refinanced in 2022 and any investment in the stadium prior to then will increase the club’s borrowing scope.
The selection of the Ricoh as a Birmingham 2023 Commonwealth Games location has helped with this, since grants from the Coventry and Warwickshire Local Enterprise Partnership worth £5.2 million are funding redevelopment of parts of the facility.
The 10-year deal which sees Coventry City shortly return to the stadium from exile in Birmingham, is estimated to be worth £1 million per year to Wasps. The presence of a second major tenant also enhances the worth of the Arena as an asset.
Meanwhile the new naming rights arrangement with Coventry Building Society brings an end to a long period of uncertainty in addition to providing a new revenue stream.
The stadium has also recently opened a new bar and restaurant, casino operator Rank group have signed a long-term lease and planning permission has been granted for a second hotel operator to become the Wasps Group’s newest tenants.
Along with the establishment of a lengthy lease for Wasps to base their training at a redeveloped former Warwickshire College site near Stratford-Upon-Avon, this all suggests enough confidence remains for a long-term view to be taken.
But for the story to get to its later chapters Lee Blackett and his depleted squad must first get the club past the introductory pages.
While they may only be the tip of an invisible financial iceberg that is affecting a number of other established Premiership clubs, Wasps are under pressure and the likes of Worcester, London Irish and Newcastle are doubtless watching with interest.
Comments on RugbyPass
late hit what late hit it wasn’t at all late and can clearly see he was committed before the tackle
1 Go to commentsChristian Lio -Willies 2 try perfomance was a standout. As was captain Scott Barrett. Up front was where the boys won it.They are a great team and players. Fantastic Crusades , you can keep going.
1 Go to commentsI don't know how the locals feel about that? I guess if you call yourselves the Worcester Wasps that might be appease. But really we need more teams in the Premiership in my view so they are not padding it out as they are at the moment. It might curtail so many players going abroad as well
4 Go to commentsNZ 😭😭😭is certainly rivaling England for best whingers cup!😭😭😭 !!!
24 Go to commentsYup. New Zealand won 3 out of 10 world cups played. SA 4 out of 8 attempts 30 Vs 50 per cent.🤔🤔
24 Go to commentsShould've done this years ago. Change Saturday kick off times to around 11am. Up and off and back home before 3pm, limit travel time too. Allows players to actually do something else with their Saturday that's family oriented or being rugby fans they could ‘watch’ pro rugby. Increases crowds etc. How can anyone that enjoys grassroots and pro rugby have to choose between the two on Saturdays?
9 Go to commentsI bet he inspired those supporters just as much.
1 Go to commentsBen Smith Springboks living rent free in his head 😊😂
67 Go to commentsGood to hear he would like to play the game at the highest level, I hadn’t been to sure how much of a motivator that was before now. Sadly he’s probably chosen the rugby club to go to. Try not to worry about all the input about how you should play rugby Joey and just try to emulate what you do on the league field and have fun. You’ll limit your game too much (well not really because he’s a standard athlete like SBW and he’ll still have enough) if you’re trying to make sure you can recycle the ball back etc. On the other hard, you can totally just try and recycle by looking to offload any and everywhere if you’re going to ground 😋
1 Go to commentsThis just proves that theres always a stat and a metric to use to justify your abilities and your success. Ben did it last week by creating an imaginary competition and now you did the same to counter his argument and espouse a new yardstick for success. Why not just use the current one and lets say the Boks have won 4 world cups making them the most successful world cup team. Outside of the world cup the All Blacks are the most successful team winning countless rugby championships and dominating the rankings with high win percentages. Over the last 4 years statistically the Irish are the best having the highest win rate and also having positive records against every tier 1 side. The most successful Northern team in the game has been England with a world cup title and the most six nations titles in history. The AB’s are the most dominant team in history with the highest win rate and 3 world cups. Lets not try to reinvent the wheel. Just be honest about the actual stats and what each team has been good at doing and that will be enough to define their level of success.
24 Go to commentsHow is 7’s played there? I’m surprised 10 or 11 man rugby hasn’t taken off. 7 just doesn’t fit the 15s dynamics (rules n field etc) but these other versions do.
9 Go to commentsPick Swinton at your peril A liability just like JWH from the Roosters Skelton ??? went missing at RWC
14 Go to commentsLike tennis, who have a ranking system, and I believe rugby too, just measure over each period preceding a world cup event who was the longest number one and that would be it. In tennis the number one player frequently is not the grand slam winner. I love and adore the All Blacks since the days of Ian Kirkpatrick when I was a kid in SA. And still do because they are the masters of running rugby and are gentleman on and off the field - in general. And in my opinion they have been the majority of the time the best rugby team in the world.
24 Go to commentsHaving overseas possessions in 2024 is absurd. These Frenchies should have to give the New Caledonians their freedom.
21 Go to commentsBell injured his foot didn’t he? Bring Tupou in he’ll deliver when it counts. Agree mostly but I would switch in the Reds number 8 Harry Wilson for Swinton and move Rob Valentini to 6 instead. Wilson is a clever player who reads the play, you can’t outmuscle the AB’s and Springboks, if you have any chance it’s by playing clever. Same goes for Paisami, he’s a little guy who doesn’t really trouble the likes of De Allende and Jordie Barrett. I’d rather play Carter Gordon at 12 and put Michael Lynagh’s boy at 10. That way you get a BMT type goalkicker at 10 and a playmaker at 12. Anyways, just my two cents as a Bok supporter.
14 Go to commentsThanks Brett, love your articles which are alway pertinent. It’s a difficult topic trying to have a panel adjudicating consistently penalties for red card issues. Many of the mitigating reasons raised are judged subjectively, hence the different outcomes. How to take away subjective opinions?
9 Go to commentsYes Sir! Surprising, just like Fraser would also have escaped sanction if he was a few inches lower, even if it was by accident that he missed! Has there really been talk about those sanctions or is this just sensational journalism? I stopped reading, so might have missed any notations.
9 Go to commentsAI is only as good as the information put in, the nuances of the sport, what you see out the corner of the eye, how you sum up in a split second the situation, yes the AI is a tool but will not help win games, more likely contribute to a loss, Rugby Players are not robots, all AI can do if offer a solution not the solution. AI will effect many sports, help train better golfers etc.
45 Go to commentsIt couldn’t have been Ryan Crotty. He wasn’t selected in either World Cup side - they chose Money Bill instead. And Money Bill only cared about himself, and that manager he had, not the team.
28 Go to commentsYawn 🥱 nobody would give a hoot about this new trophy. End of the day we just have to beat Ireland and NZ this year then they can finally shut up 🤐
24 Go to comments