PREMIUM |
Alex Cadwallader, former professional Rugby Union player, a restructuring and turnaround expert, and director at Leonard Curtis, reflects what needs to be done to make English club rugby more financially viable.
Whilst rugby’s governing body the Rugby Football Union (RFU) may come under some criticism for setting their hard deadline for London Irish, we have to remember that the same voices were blaming them for not intervening earlier with Wasps and Worcester collapsing mid-season last year.
Yes if the RFU is not satisfied that London Irish can make it through the next season and are expelled from the Premiership, it will be another devastating blow to the game. However, you have to compare it to London Irish collapsing in the middle of next season as opposed to them suddenly finding a benefactor to pour more money into a loss-making business.
Given that the club has been for sale for £1 (along with quite a few others) for a couple of years, the former appears far more likely.
The game needs a strong regulator and one that is prepared to enforce its rules. There were numerous commentators complaining about the previous ‘fit and proper’ test that allowed certain owners to come into the game and you have to accept that this will mean some buyers are turned away.
Although does the game really want owners who look to move the grounds and other key assets out of the club as happened and was planned at Wasps and Worcester respectively?
In the same vein can we really criticise the RFU for demanding that the clubs can demonstrate they can make it through the season?
We also need to remember that London Irish is clearly not a one-off, although given that this could be the third club to fail in the last 12 months I doubt anybody does.
The current business models in the Premiership clubs do not work and the structure has allowed clubs to trade unprofitably and, in certain circumstances, off a cliff into administration.
Startlingly, England’s top-tier professional clubs have reported combined operating losses of over half a billion in the last twenty or so years. And the clubs’ budgets for next season? I suspect the majority, if not all, will be aiming to deliver a manageable loss with the figure of £4m per club being widely mentioned.
Even against this backdrop, the never-ending debate around the salary cap continues with a some clubs wanting it to be increased to £6.4m for the 2024/25 seasons and others, understandably, at a loss as to why this is being even considered when plenty of clubs are struggling to survive as it is.
How to move on
The definition of insanity is doing the same thing and expecting a different result…. I was told this in many a post-game debrief at a training ground or in a boardroom in the world of restructuring. However, given the dramatic events of the last few years what change has really happened in the English game?
Is the plan to just let capitalism and stark economics eventually leave us with six or seven clubs, or will the game come together to accept the issues and address them?
There are plenty of sensible and experienced minds in the game and outside who would like to make the required changes if their hands weren’t tied. Firstly I believe that the game (the RFU, Premiership Rugby, the clubs, and CVC, a major investor in the league) needs to accept that:
Secondly, it would be great to see CVC become more active and follow their successful strategy in Formula One. Where is the next Jonah Lomu Rugby Game or Rugby Trading cards/stickers to capture the young audience?
Why aren’t clips and memes of Tom Curry and Mario Itoje all over TikTok and Instagram this fortnight in the build up to the premiership final? Are we really just relying on the broadsheets and a subscription TV channel to grab new eyeballs? Or do we follow what has been successful elsewhere – Lebron James’ Lakers, Tom Brady’s Patriots, A Rod’s Yankees…ring any bells?
Finally, the most dramatic but potentially successful option could be to merge Rugby Union and Rugby League. Both the English and Australian games are suffering the most from having two very similar sports competing for the same sets of eyeballs.
In England, we have seen both games invest millions in trying to expand their game North and South respectively. Would merging the game and the leagues not potentially provide us with enough fans and commercial revenue to support two professional leagues of say 8 teams? So, in theory, we could have the equivalent of the below fixture list in the future:
Until we get to that stage, the game in England needs to accept reality and provide a sustainable platform where a club’s costs are under control and manageable. Yes that will mean that a highly-paid kicking coach might not be retained and certain players leave for France or Japan.
The clubs are also likely to suffer initially in European Club competition until a time when the revenue has increased to allow the clubs to spend more on players and staff.