English rugby clubs ‘heading for disaster’ after mounting £300m in debts

[Rinkadink]

I've heard much worse ideas than well run franchises (emphasis being on well run) as the top tier of the domestic game.

I'm hoping that believing the RFU being fit for purpose is one of them. There's not much worse than the potential franchising of pro rugby in England, I find the idea abhorrent.

Worcester, Ealing, Coventry, Doncaster and Pirates as the pro teams

Should be a 14 team premiership with promotion and relegation. It's appalling that it isn't up to 12 as it stands. The increased revenues would help so much for starters.

 

[Vieux Talonneur]

Can't see how this benefits an already desperate league . Maybe if the gov did less chest beating and more observance they would realise how damaging this tack is

If you lend money, you expect it back on agreed terms, whether you're a government or a bank. Public money brings bigger scrutiny.

Covid was the straw that broke the camel's back but the clubs have been financially mismanaged before and since.

For some reason too many people think different rules apply to sport, a view I might share if clubs were (part) community owned. But they're not - they've sold out to private wealth and as such they should stand or fall on their own commercial merits, just like any other business.

There are obviously massive individual variances, but when people read that the average Prem player salary is north of £100K p.a (still a massive amount for most people), there's not going to be a lot of sympathy about enforcement of loans.

 

[pagliaccio_euforico]

If I'm a championship team (or even the whole league); I'd see what I can grow organically. Almost every attempt PRL has made for money has been a bust. Just build a solid league with reasonable spending.

 

[McTallshort]

For some reason too many people think different rules apply to sport, a view I might share if clubs were (part) community owned. But they're not - they've sold out to private wealth and as such they should stand or fall on their own commercial merits, just like any other business

That's a good point. When wasps went under owing tons of money to the tax payer and local businesses and all everyone talked about was isn't this a shame for the club and how can the brand be saved and start again.

 

[Flankers' paradise]

If you lend money, you expect it back on agreed terms, whether you're a government or a bank. Public money brings bigger scrutiny.

Covid was the straw that broke the camel's back but the clubs have been financially mismanaged before and since.

For some reason too many people think different rules apply to sport, a view I might share if clubs were (part) community owned. But they're not - they've sold out to private wealth and as such they should stand or fall on their own commercial merits, just like any other business.

There are obviously massive individual variances, but when people read that the average Prem player salary is north of £100K p.a (still a massive amount for most people), there's not going to be a lot of sympathy about enforcement of loans.

You're absolutely right, I just think that obviously clubs are still paying NI on players' wages, and so still giving something to the treasury. It may not be the same value as the loan but it's still consistent year on year. If clubs go bust and more players either sign contracts abroad or move home or whatever then that tax base has shrunk - and the gov gets neither. If they can afford to give every mp a 2k pay rise and fail to tax wealth properly then they can afford to be lenient in the way they go about regaining the loans.

Take your point about them being private businesses but they're more than that, they are of public interest and provide community services. Maybe that is the answer though, local government could take shares in their clubs with oversight on how to help sustainability?

 

[Don't Skip Leg Day]

But Covid can't have been predicted by any of the clubs in their business plans. It's unfair to judge them by that.

Ignoring the bias hatred for what wasps did, at least they realised you need to get sustainable on rugby income to fund your rugby. Wish a few other clubs would realise that crowds and shirts alone can't fund a rugby club. We don't need rich bakers or foreign funding, we need cash cows owned by the clubs to fund the sport that's sustainable.

 

[higgik]

But Covid can't have been predicted by any of the clubs in their business plans. It's unfair to judge them by that.

Ignoring the bias hatred for what wasps did, at least they realised you need to get sustainable on rugby income to fund your rugby. Wish a few other clubs would realise that crowds and shirts alone can't fund a rugby club. We don't need rich bakers or foreign funding, we need cash cows owned by the clubs to fund the sport that's sustainable.

Like???

 

[Don't Skip Leg Day]

Like???

Well any cash cow business, so could be the use of your stadium as a conference centre, 3G training pitches for others, car parks are great as well. Anything really where they can use their current assets or invest in something to bring in steady income.

 

[higgik]

Well any cash cow business, so could be the use of your stadium as a conference centre, 3G training pitches for others, car parks are great as well. Anything really where they can use their current assets or invest in something to bring in steady income.

Agreed.
Too many clubs are original rugby clubs that have some money behind them.
They are still run as a rugby club business and not part of the bigger 'professional sports business'.
The sport has a choice, move forward to a proper professional sports business model or back to a shamateur rugby model.
My preference would be for them to model on the NFL franchise model, where the group look after each other, even if that means pulling up the drawbridge of promotion.