Rugby Finances
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Dodgy as fuck
Worcester Warriors: the inside story of a rugby club’s collapse | Michael Aylwin
With all employees out of work and the club’s future hanging by a thread, administrators are set to pore over the club’s finances. What will they find? There is a lot to unravel …
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@Machpants Colin Goldring has some questions to answer it appears.
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Jeez, my head hurts trying to only half understand that.
Amongst all that stuff about the convoluted 'ownership' of the club is the rather bizarre statement that someone was disbarred for "causing or allowing" the disappearance of 8M Euro from a client.
FFS there are people banged up for nicking 100 quid from a corner shop. Lawyers eh? -
WR have bought RugbyPass.
Bought it off Sky NZ whio acquired it a few years ago, and in a way off of NZRU who took a 10% stake in Sky last TV rights deal.
I think having a WR equivalent of a thing like NBATV is a good move for them.
But will need to get rid of the terrible 'news' part of rugbypass, being the governing body. Surely?
Latest News | World Rugby
The latest World Rugby news, including about the World Rankings, Tournaments, Player Welfare and the Laws of the Game
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Sky bought Dublin-based RugbyPass in 2019 in a deal it said at the time would cost US$40 million.
However, about a third of the purchase price comprised payments that were contingent on the business’ future performance, of which only $1.7m has so far been paid out.
Yikes.
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Also. Sky nz tied up rights deals for WR events until 2029 at the same time. So, looks like sky used that as a bit of leverage? Or in lieu? Depends who was more keen, as to who got the better part of that part of the deal.
Either way, sky have removed them selves from the bidding process for next 2 men's RWCs, plus the other extras.
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This was from yesterday (before the Wasps into administration news)
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A 10 team Premiership would make sense from a scheduling/ workload POV. If keeping a home and away format. As it removes 4 matchesfrom the normal 12 team league (6 matches from the temporary 13 team league, pre-Worcester folding). These would be matches on international weeks that could be removed.
But, from a rugby POV. A 10 team pro league in the second biggest domestic market in the world only makes sense of it is paired with a fully pro second division.
From the self interest of the PRL shareholding clubs. It wouldn't be about the above though. Its probably about sharing the central income among 10 clubs + CVC, rather than 13 + CVC.
Down to 11 now with Wasps gone.
In the financial reporting pre-covid. By The Guardian and by The Rugby Paper. Sale and Newcastle were both revenue basket cases. Worcester were sometimes excluded from that journalism as they were in second division at the time.
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Of the 2 clubs that have gone into administration.
One was the only club that was paying real commercial interest rates on its debt (Wasps). And the debt markets have frozen, and can't re-finance (this would have been the 3rd time it would have needed to be re-financed, and the economic conditions have changed)
The other was a club with dodgy owners, but also the club with the highest wages as a % of turnover. On low turnover.
This table below was the last report before covid, of the league as a whole (by the Rugby Paper)
Worcester's wage bill 95.6% of turnover.
The other clubs near that Worcester position of low turnover and high % wage bill are Sale, Newcastle and London Irish.
Note. London Irish's situation has changed for the better since then as they have moved back to London from Reading. Would expect their turnover to increase at Brentford, near their historic home and in a way bigger market.
2018 numbers.
Screen Shot 2022-10-13 at 9.57.51 AM
A record £44.4m in losses, Premiership club finances in deeper detail
But Exeter Chiefs, who were the only club to turn a profit, chairman Tony Rowe says CVC money has boosted balance sheets
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On Sale and Newcastle.
This table is based on date from The Guardian article back in 2018, so pre-CVC.
Where they are so vulnerable, is that they are the two clubs so much more dependant on 'central income' rather than independent ticketing, hospitality (and even hotel ...) income that the other clubs have.
It is the central income that the league has sold 27% of to CVC.
Screen Shot 2022-10-14 at 10.03.04 AM
Premiership rugby finances: the full club-by-club breakdown and verdict
The 2016-17 accounts of all Premiership clubs and what the figures say about their health. Wasps led the way in turnover but spiralling wages cause concern
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Looking at Newcastle's most recent accounts.
Comparing them to 2018, dates of The Rugby Paper article.
Screen Shot 2022-10-14 at 10.33.33 AM
2021 profit/loss *(Paper Profit, based on a paper re-valuing up of PRL shares)
Operating loss of about -£0.2mBear in mind - Still looks like the 2020/21 season was covid impacted, based on average attendance being 3k under 2018.
Debt:
2018:
2021:
Screen Shot 2022-10-14 at 10.36.52 AMLooks Like they have a £9.3m Govt loan covid bailout. My guess.
Other debt didn't increase. Maybe went down by about a million.
The CVC payment has gone on mainly operating costs. -
I was looking at WR/IRB financials, to see what impact the covid assistance by WR to some of the individual unions had made.
E.g. things like Australia getting a "15/05/2020 — World Rugby has agreed to allocate a A$14.2m relief package to Rugby Australia as part of its Covid-19 rugby relief strategy."
But, I can see no sign of it at all? (Maybe they helped facilitate loans, rather than doled out grants?)
Screen Shot 2022-10-18 at 9.18.52 AM -
Another thing I was interested in was the profit of the 2019 Japan RWC.
As there hasn't been any proper reporting on it yet. Just the 'fluff' reporting like how much economic activity it generated for the nation etc. Not how much profit for JRFU and WR.
Cynically, I'm thinking they want to bury it a bit.
Because even though it was a fantastically successful tournament both on the field, and economically, as it didn't surpass the previous tournament financially (even though this was expected and budgeted for), it doesn't get printed/celebrated.
The above table shows WR financials, not RWCL.
WR expected the higher costs of running a tournament in Japan meant that it wouldn't be as profitable as 2015 in England.
But, are they trying to hide that it wan't even as profitable as 2007? and not much up on 2011?
Question is, do the 'running costs' of the tournament include the tournament participation fees? (which were separated out in 2007 reporting, but.are buried within in 2011, 2015, 2019. Are these fees now reported under grants our tournament expenses?). The numbers trends suggest they are under grants.
Because an increase in running costs due to higher participation fees (mostly to tier 1 unions) moving money about within the sport, is an entirely different kettle of fish to higher costs due to cost of living/doing business in Japan.
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The 'danger' of what I am doing above - is I am using WR financials and trying to extrapolate RWC financials.
In one of the WR annual reports, they have this table. But only goes up to 2011. Showing specific RWCL figures.
In here they have included participation fees as part of tournament costs.So from earlier table. in 2007 the participation fee was reported as 32m, and this table shows tournament costs (which include this fee) of 79.2m
RWC Tourn Financials -
would it be a completely crazy idea of NZR to buy Wasps or at least a decent share, potentially rotating NZ players who could do with some development in a different comp or sabbaticals
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@Kiwiwomble said in Rugby Finances:
would it be a completely crazy idea of NZR to buy Wasps or at least a decent share, potentially rotating NZ players who could do with some development in a different comp or sabbaticals
You don't need the risk of owning shares to have an agreement with a club
Not sure how much came out of it, but NZR had an agreement with Harlequins to share info give experience to coaches/young players etc.
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@Duluth yeah, obviously you dont need too, just one way to have a bit of control, the Quins deal is actually what made me think about it, dont remember anything actually happening
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Initially Harry Plummer spent one summer training up there. Marchant had a season in NZ
I don't think much has happened in recent years though
Japanese teams have become more attractive and probably replaced what they wanted from Quins. The season is at a good time and not too arduous, there's good relationships with several coaches etc
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Didn't realise that Brad Shields had scored a job teaching others how to drop the ball.
