Realism in rugby has gone viral in the last month. English club owners from Bristol’s Steve Lansdown to London Irish’s Mick Crossan and unions from England to Australia all agree that the suspension of the game throughout the world as countries look to slow the spread of the coronavirus has presented an opportunity to reset the professional game.
“Club rugby has to change,” said Crossan. “Last season cost me £4m and I can’t afford that. It’s definitely not a sustainable business. We cannot keep relying on rich benefactors. This crisis may actually help club rugby if everyone cuts their cloth to suit their pockets and it brings back common sense.”
The current lockdown has exposed the sport’s parlous financial position, union and club, with increases in turnover tending to be spent on wages so that they are no better off. Worcester’s last financial accounts showed a turnover of £12.1m was eclipsed by a wage bill of £12.8m. No wonder the club was sold for £1.
“We do not want to come back in and carry on with the same model that repeats the errors of the past,” said the RFU chief executive, Bill Sweeney. “When you have a crisis of this scale, and I do not think anyone predicted this magnitude, it highlights where there are fault-lines. Some are being exposed now.”
The game in Europe went into the professional era 25 years ago sleepwalking but the south was more alert. Wealthy entrepreneurs in England and France saw an opportunity and took over clubs, quickly finding themselves on a collision course with their unions when there was not even a distant prospect of turning a profit. All that has changed since are running costs thanks to an explosion in wages.
“We are all acutely aware that from present adversity new opportunity could, and very much should, be born,” said the Welsh Rugby Union chairman, Gareth Davies. “Streamlining our playing calendar and balancing up the need for revenue generation have long been issues facing our sport. We need each other more than ever to resolve this conundrum and all rugby playing nations should now realise the extent to which we are interdependent. The end result should be a truly global international calendar. Unity is not only the key to survival but long-term prosperity.”
Premiership Rugby this week repeated its desire to complete the season and fulfil commercial contracts, but it will be a long time before normal life resumes. Even if the restrictions on large gatherings were relaxed sooner rather than later, would there be a demand for big-capacity sporting events amid fears of a renewed outbreak of Covid-19? Social distancing will take on a voluntary nature and there appears to be more chance of next season being affected than a resumption any time soon.
The financial squeeze will become greater and when rugby is played again Test matches will have priority because they are the sport’s commercial driver. The south faces losing its incoming tours: if that happened, Europe’s autumn schedule would need to be revamped and revenue shared, a subject the north has consistently refused to address.
As Davies said, all the unions are in it together and they have an opportunity to assert their authority together, as they should have done in 1995. This week the French Rugby Federation president, Bernard Laporte, floated the idea of a world club championship, a more exclusive version of the Heineken Champions Cup.
It was not something he had suddenly dreamed up. Laporte is running on a ticket with the World Rugby chairman, Bill Beaumont, who is up for re-election next month. Laporte is bidding to become his deputy and the governing body’s plan for a nations league, which was scuppered by some of the Six Nations last year, still has legs.
The planned divisions below the Rugby Championship and the Six Nations are being organised, providing a pathway for second- and third-tier nations. The European unions are in talks with the private equity company CVC about taking a 15% stake in their business in return for £300m.
There will be a temptation, with all the unions predicting substantial losses this year, to snatch the £50m+ each would receive, but how far would it go after debts had been absorbed? The Premiership clubs last year received £12.5m each after selling a 27% stake to CVC, which means they will each receive around £1.5m less from central funds each year at a time when enhanced television and sponsorship deals will be tough to negotiate.
The nations league promised a substantial increase in turnover for unions with all the money raised going to the game and none to speculators whose concern was the bottom line. Put together with Laporte’s proposal, it would allow all the tier one unions to contract their leading players, relieving some of the financial burden on clubs in France and England.
The clubs would resist the move. Owners have put a significant amount into the domestic game with a consequent rise in playing standards and facilities, but wage inflation means the business as a whole is losing some £50m a year, a figure that will rise. The £7m salary cap will be reviewed after the start of the season, but it will need to come down rather than go up.
The playing calendar in Europe is a compromised mish-mash, a product of the drive for cash, which serves neither club nor country well. It cannot survive the current crisis and unions will never have a better opportunity to force change. The game needs them to seize the moment.