English rugby’s financial crisis could leave Premiership clubs plagued by vultures | Premiership
OWe have to look at the runners and the runners, scrutinize the comings and goings, establish our forecasts of order of arrival, semi-finalists, winners. We should argue eagerly over all of the above, dismissing each other’s opinions as worthless. Have you ever actually played the game? You don’t know what you’re talking about. All the usual brickbats that any self-respecting sport resonates at this time of year.
Instead, we approach the new season of English rugby, 25 years after the Premiership was founded, with a stomach ache. We can’t even predict with certainty how many teams will be lining up when it all kicks off next weekend.
Worcester’s fate is turning those stomachs at the moment, but the club’s plight is little more than a bubo surfacing. A chronic illness has been bubbling for years. The constitution of English rugby is hopelessly dysfunctional. But for a few periods approaching apparent solvency (around 2005 and 2015, to be precise), to be followed by the inevitable period of reckless overconfidence, this was always the case.
If bean counters had enough time to wade through the individual accounts of the respective companies, they would find that Premiership clubs’ cumulative losses over those first 25 years amount to over half a billion pounds. For the most part, these losses were covered by wealthy benefactors with large reserves of patience (if only they were infinite) and more or less large reserves of money.
Worcester is in trouble because the owners seem to have more talk than money. There is now an air of mutiny among the club’s staff, so weary of insurance are they, but what we are seeing in Worcester is just an exposition of the gaping gap between spending at a typical Premiership club and its income. Without Steve Lansdown or Bruce Craig to bridge the chasm in each club’s finances, Worcester is what’s going on.
It won’t stop there. Wasps, multiple champions no less, are the other club to have had their financial troubles aired this pre-season, but it’s a growing secret that at least three others are in imminent danger. With some, the owner’s dwindling reserves of patience is the problem; with others, the decline in cash reserves. Either way, someone rich is needed and needed now. Please apply directly to each club.
An ability to sift through genuine candidates and circling vultures is the next requirement that England rugby’s dysfunctional governance model must acquire. How much more difficult will that prove to be, given the almost guaranteed losses that any rugby-loving multi-millionaire knows they will face, should they decide to commit in good faith?
Each club received a cash injection from CVC, the private equity firm, in December 2018, the month after the current owners of Worcester arrived. This will have helped some clubs in the short term, but the long term reality is that their share of central revenue has now shrunk from the 27% stake acquired by CVC.
Then the Covid hit, which undoubtedly precipitated the crisis. Nothing like a pandemic to reveal gaping chasms. Each club is believed to have taken out an eight-figure loan from the government. Worcester’s was £15million. No doubt refunds aren’t due for the first two years, but they will be soon, likely adding more than a million to each club’s annual expenditure.
Considering all this, it’s perhaps unsurprising that the influx of big Premiership signings seems rather paltry this year. Handré Pollard, the World Cup winner from South Africa signed by champions Leicester from Montpellier, is pretty much like an incoming superstar.
There are some big signatures inside. Vincent Koch, Pollard’s Springbok team-mate, moves from Saracens to Wasps, while Sale in particular signed some interesting Englishmen, managed by George Ford, but they released four top South Africans, all of whom are leaving the Premiership.
Cutting his fabric feels the shape of things to come for English rugby as much as in any other area of life. Maybe one day we may even enter a third period of something approaching solvency. Or maybe the number of English clubs trying to pay their players a living wage will dwindle as wrestlers drop.
If making predictions about how things will turn out at the end of a nine-month season is futile at the best of times, this year the uncertainty is particularly poignant.