Rugby Finances
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Playing to empty stadiums places premiership rugby under threat
Head of England’s top league says clubs will go bust unless restrictions are eased
Playing to empty stadiums places premiership rugby under threat
England’s biggest rugby clubs face the “very real” risk of going bust unless the UK government eases restrictions on fans entering stadiums, according to the head of the country’s leading league.
Darren Childs, chief executive of Premiership Rugby, the top tier of English club rugby union, called on ministers to come to a “pragmatic solution” for the reopening of grounds despite concerns to public safety due to the coronavirus pandemic.
Mr Childs told the Financial Times that financial losses from rugby matches that restarted in August without paying spectators, as well as an expensive testing regime for players, is costing clubs tens of millions of pounds.
These shortfalls are devastating to rugby clubs, which are more reliant on match day income than wealthier sporting competitions such as football’s Premier League, which derives more from broadcasting deals. Last season, Exeter Chiefs was the only one of Premiership Rugby’s 13 shareholder teams to turn a profit.
“It’s becoming increasingly more alarming, the longer it goes on,” said Mr Childs. “We’re not expecting to open up every seat, but just getting some back in will help to alleviate some of the financial downside . . . we’re trying to keep the show on the road.”
His warning comes as the UK government has scaled back plans to allow the gradual reopening of sports grounds following a rise in coronavirus cases.
Financial strain is being felt even after Premiership Rugby sold a 27 per cent stake in the league for £200m in 2018 to CVC Capital Partners, the European private equity group.
Some rugby clubs are spending the roughly £15m each received from the CVC deal during the pandemic to help stay afloat rather than investing in infrastructure and marketing spending. Mr Childs said there were no plans from CVC to provide additional funding, leading to a greater focus on cutting costs.
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similar from Exeter owner.
Exeter owner Rowe warns club rugby faces financial ruin unless fans return soon
“I’ve been a businessman since I left the Royal Marines 50 years ago and for the first time I feel totally hopeless because I can’t do anything to change the situation"
Exeter owner Tony Rowe warns club rugby faces financial ruin unless fans return soon
The owner of English rugby’s top club has warned that the Premiership elite face financial ruin unless fans are allowed back into games soon.
Exeter boss Tony Rowe spelt out the nightmare scenario in response to a report which claimed attendances at sporting events could be restricted to between 1,000 and 2,500 from October 1, depending on the coronavirus infection rate. Culture Secretary Oliver Dowden meets sports bodies today.
“We need 10,000 bums on seats each game to break even - and we don’t have the overheads of some other clubs,” he said.
“So if they’re saying crowds are going to be limited to 2,500, we’re going to say we don’t want any fans in, because a crowd of that size costs us more than playing behind closed doors and we’re already losing £1 million a month.
“Times that by all the Premiership clubs - they’re probably losing the same - and we’re going to be dead. The clubs financially are going to be dead.”
Rowe’s dire warning was echoed by Gloucester chief executive Lance Bradley who told BBC Radio 4: “We simply have to get fans back in reasonable numbers as soon as possible to ensure the game survives.
Gloucester hosted English rugby’s second crowd pilot match on Monday night with 1,000 spectators allowed into Kingsholm for the visit of Harlequins.
Exeter, who top the Premiership and take on Northampton this Sunday for a place in the European Cup semi-finals, are the one club in England’s top flight to have made professional rugby pay.
At least they were before the pandemic struck.
“We haven’t had our accounts finalised but for last year, which finished at the end of June, we will post a loss for the first time in our history,” said Rowe. “And a big loss. We are talking about millions, not 100s of 1000s.”
“I know the government are trying to protect us all. But financially we will be dead if they don’t allow us to have some sort of numbers back in the ground.”
Rowe’s stark admission was echoed by London Irish owner Mick Crossan, while Worcester stressed the “need” to have full grounds again “as soon as possible”.
A Warriors statement read: “Even before the Covid-19 pandemic the majority of clubs were not sustainable on the revenue generated from gate receipts alone. So any restriction on numbers is bound to have a serious adverse impact on income streams.
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Irish rugby 'burning' €5million a month to keep show on the road
Behind closed doors rugby has killed a major IRFU revenue stream, leaving leading official Philip Browne gravely worried for the future.
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Laporte.
Fraud investigation. To do with Montepllier and Goosen being paid lots to go farming for a year and not play for Racing for final year of contract. General salary cap shenangins and whether properly investigated.
The club had been accused of irregularities during the 2018/19, following an expose by L’Equippe and RMC. The LNR stated that the “parties are pleased that an amicable solution has been found and that it is allows us to work in the future in a peaceful atmosphere.”
The accusations against the club revolved around the signing of South African flyhalf Johan Goosen, and a number of other top players. A report had suggested that money paid sums to Goosen and other players via a shell company in South Africa, so that the majority of their salaries would not be counted towards the salary cap.
Laporte now stands accused of giving favourable treatment to Montpellier after it was revealed that a company he owns had signed an image rights contract with Mohed Altrad’s Altrad Group in early 2017, a deal he since pulled out of.
The anti-fraud squad will now grill Laporte.
Report: Laporte to be interviewed by French anti-fraud squad
World Rugby vice-chairman Bernard Laporte is set to be interviewed by the French anti-fraud squad over his links to Montpellier Herault owner Mohed Altrad.
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Some rare good news for this thread. Crowds back at NPC games (except in Greater Auckland).
But tempered by coinciding with All Blacks being withdrawn (crazy IMO, should be flexible, people will be forgiving)
Shouldn't be hard for Taranaki to sell out their temporary athletics track home.
I will head along to the Wellington club finals though instead of the Friday night NPC game, as kid friendly time. Went last year with my kid and is one of the best atmospheres I've attended. Hope they get a cut of the hot dogs and chips van ....
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@Machpants said in Rugby Finances:
UK Premiership are going down, as it appears that govt has shelved any further crowds at games - they were running pilot schemes, but the UK is on it’s way to Lockdown 2.0
Positioning themselves for a government bailout. Suddenly lot's of club chairmen in the news saying how vital crowds are and need stadiums opened up.
Pressure isn't really abut letting in the crowds, it's about saying you prevented us running our business, give us some bailout money.
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Voila:
RFU, Premiership Rugby seek government bailouts as spectator return plans put on hold
English rugby stands on the edge of a precipice after club and country announced they are seeking government bailouts to avoid financial ruin caused by new restrictions on fans attending matches.
English rugby stands on the edge of a precipice after club and country announced they are seeking government bailouts to avoid financial ruin caused by new restrictions on fans attending matches.
The Rugby Football Union is forecasting losses totalling £106m as a result of measures designed to limit a second wave of coronavirus infections that will prevent Twickenham from hosting fans for up to six months.Chief executive Bill Sweeney has revealed a perilous financial outlook as a result of a £122m reduction in revenue for the forthcoming Autumn Nations Cup and £138m for the Six Nations.
The impact of these are losses of £46m and £60m respectively, forcing the world's richest union to request state aid. And the English top flight has followed suit, Premiership Rugby asking for a "rescue package" after warning of "irreparable damage to our clubs" by the absence of crowds for the foreseeable future.
The RFU and Premiership Rugby attended a meeting of major sports with Oliver Dowden, the Secretary of State for Digital, Culture, Media and Sport, immediately after Prime Minister Boris Johnson had announced the new restrictions.
Sweeney was present to outline the gravity of the situation at Twickenham and in a bleak statement, warned of the possible consequences if assistance is not provided.
"From the outset we have been clear that an autumn without crowds would leave us with little choice but to approach government for financial help. Unfortunately, we are now in that position," Sweeney said.
"Without support we are in danger of clubs at the heart of communities across England, as well as players and volunteers, disappearing forever."
Sweeney, who also revealed that the community game is facing a plunge in revenue of £86m, added: "Premiership and Championship Clubs will face significant financial hardship. Our community rugby clubs, many of which run grounds at the heart of their communities are under threat."
Premiership Rugby chief executive Darren Childs revealed what is at stake as the second wave of the coronavirus pandemic threatens financial oblivion across a number of sports.
"We look forward to working with Government on a rescue package for professional club rugby in England and we will continue to seek innovative ways to overcome these challenges to ensure Premiership Rugby and its clubs have a
future," Childs said.
Gloucester chief executive Lance Bradley offered a similarly grim outlook for the Premiership, even questioning whether its existing structure could withstand such losses.
"I don't want to sound over-dramatic but it can't be for six months if we want to have professional rugby survive in the format that we know," Bradley told the PA news agency.
"At Gloucester we had plans for when fans would come back and we planned for some to be back at the start of the new season and for more to be back come in January.
"It's a big problem for us not to have fans in grounds because it's about a third of our income. We can't just shut everything down for six months.
"If we're not allowed to have fans for an extended period, then some kind of financial support to overcome that would certainly help."
Bradley's view was echoed by Saracens director of rugby Mark McCall, who believes the impact of continuing to play behind closed doors will extend into the Test arena.
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Q&A – Mark Lavery: If we can't have a crowd we can't have a Championship
Neale Harvey gauges the views of Ampthill director of rugy Mark Lavery on the issues facing a league short of income
Ampthill director of rugby Mark Lavery tells NEALE HARVEY why the game is stuck in the slow lane and could face even tougher times ahead as clubs at all levels grapple with the financial fallout of the coronavirus pandemic.
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A sort of bailout wouldn't be unprecedented.
The RFL got a £16m government loan back at the end of April. Terms of the load weren't disclosed.
https://www.bbc.com/sport/rugby-league/52493621Here in NZ, back in June $4.6m relief package to pro sports in NZ. Of which $1.25m went to NZ Rugby.
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@Bovidae said in Rugby Finances:
There are concerns about survival in football too, particularly clubs below Premier League level, so I expect this will have flow-on effects for other sports.
Yes, I'd reckon it is the political importance of lower league football possible failing will mean something will be done and that will mean RFU and PRL will be able to slip their cap in as well.
Macclesfield Town folded last week, with debts worth the same amount as Gareth Bale's weekly wage.
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IRFU.
Also seeking some govt help. Although they are governed by 2 different govts.
'If this goes on indefinitely you have to question if pro rugby is sustainable'
IRFU chief warns ‘existence of professional rugby in Ireland’ is under threat in 2021 as sporting bodies seek government help.
PHILIP BROWNE, THE chief executive of the IRFU .....
Earlier today, Browne – along with leading administrators from the GAA and FAI – met with an Oireachtas committee on coronavirus as the sporting bodies seek a total of €70m to cope with the negative financial impact of coronavirus on Irish sport.
With games ongoing behind closed doors and health experts advising sporting bodies to limit attendances as sporting events have the potential to become ‘super spreaders’ of Covid-19, the three main sporting bodies have suffered financial hits.
So much so that Philip Browne, the chief executive of the IRFU, said that an attendance of 5,000 fans in the Aviva would actually cost the union money. He, along with his colleagues in the GAA and FAI, are hoping the Government would allow a one-metre separation, rather than the proposed two-metre separation – to exist in stadiums.
The reason being that – under current government guidelines – a two metre separation would allow for just 7,000 people in the Aviva whereas a one-metre separation would mean up to 18,000 fans could attend a game in the stadium.
“It (a one metre separation) is still not going to solve the (financial) problem entirely, but it will help,” Browne said, as he pointed out that an attendance of 5,000 fans in the stadium would actually end up as a cost for the IRFU, by the time expenses were taken into account.
“It costs us money to do that,” Browne said. “It achieves one objective in getting spectators into the ground, but it actually ends up costing us a significant amount of money to do that.”
Tom Ryan, director general of the GAA, said the association had lost €21 million so far in 2020 – on the back of the Coronavirus crisis, while Gary Owens, the FAI’s interim chief executive said that the return of fans to stadiums was a crucial part of their financial planning.
Browne went on to tell the Oireachtas Special Committee that the IRFU was “burning” through €5m a month.
“We put a stake in the sand in September that we would put our head above the parapet then, but we’ve moved it out to December,” he said.
“We need in December to see spectators coming back in 2021 and if not, we have to take actions that are frankly unpalatable.
“Unpalatable looks like something very different to what we’re doing at the moment.
“If we cannot generate revenues to support our activities then we will have to scale them back.
“The current projected position to the end of June 2021, showing a negative cash swing of almost €40m from a cash surplus of some €28m in June 2020, to borrowings of just over €10m, backed by union assets, is very serious and is being kept under constant review.
“If these projections were to materialise, the very existence of professional rugby on the island would be under significant threat in 2021.
“Our audited financial statements for the period to July 31, 2020, will show an actual record financial loss of more than €35m.
“We are facing an unprecedented cashflow crisis.”
At least the IRFU, being prudentially run, can ask with a straight face. But who would want to bail these guys out "coz of covid": https://www.forum.thesilverfern.com/assets/uploads/files/1554786376396-changes-in-debt-position.jpg
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Interesting for Saracens. Championship, with no crowds, is not going to happen, the clubs can't afford to operate without gate takings - indeed one of the clubs has gone 100% amateur. And there will not be crowds for that season. So Farrell et al get no rugby apart from international? Or are Saracens going to get away, once again, with their blatant financial doping and get placed back into a ring fenced prem?
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UK government ready to rescue up to eight sports facing financial black hole
A rescue package is to be set up by the government to help up to eight sports facing financial black hole because of the continued absence of fans
UK government ready to rescue up to eight sports facing financial black hole
*Bailout needed because of delay to return of fans
*Matchday revenue crucial to survival of clubs
Exclusive by Sean Ingle, Ben Fisher and Robert Kitson
Tue 22 Sep 2020 16.52 BST
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Sport has been warned the pause in the return of crowds, which was announced by the government on Tuesday, could last throughout winter – and even until the start of April.
The government is drawing up plans for an urgent rescue package for as many as eight sports, after being warned numerous clubs face financial ruin because of the lack of gate receipts.
Senior figures from football, rugby union, cricket, horse racing and three other sports also met the culture secretary, Oliver Dowden, on Tuesday to tell him the situation is increasingly perilous.
While Dowden vowed to help, he also made it clear to the Premier League and other more financially stable organisations that they must do their bit by also helping clubs lower down the pyramid. However, the danger to sport was made clear:
• The Rugby Football Union warned it would see a reduction in revenue of £122m and that rugby clubs at the heart of communities across England were “in danger of disappearing for ever”.
• The Premier League reiterated its warning football was losing £100m a month – and said “the football economy” is unsustainable without fans.
• Scott Priestnall, chairman of National League Yeovil, said he feared “for clubs not just at our level but League One, League Two and maybe some in the Championship”.
• The British Horseracing Authority described the news as “a serious blow” and warned the racing industry “is now facing a severe threat” and the loss of millions of pounds.
The government is yet to indicate the scale of any bailout for elite sport. But while grants, loans and rate relief are all on the table, the Guardian understands it will be substantially less than the £1.57bn given to the arts in July. A separate £500m package to save grassroots facilities and clubs from closure is also being considered by the Treasury, which is said to be sceptical about its benefits. But insiders fear that without help around 20% of swimming pools and hundreds of local authority leisure centres could close – costing thousands of jobs, and resulting in a drop in participation.
Grassroots sport has also been hit by the application of the rule of six to all adult indoor team sports – which will affect basketball, netball and five-a-side football leagues. However, children will still be able to play those sports indoors.
The RFU chairman, Bill Sweeney, warned the government the lack of crowds in the autumn fixtures and 2021 Six Nations would cost the sport £106m and have severe consequences at all levels of the game.
“Premiership and Championship clubs will face significant financial hardship,” Sweeney said. “Our community rugby clubs are under threat. Without crowds and league games community rugby will lose an estimated £86m in revenue this season.”
The scale of the problem in club rugby was made clear by Tony Rowe, chief executive of Exeter, who said many teams were in an “absolutely desperate” predicament. “We’ve got to get bums on seats,” he told the Guardian. “Without revenue we can’t hang on for ever. We’ve been losing a million pounds a month since March and we’re a club who usually never lose money. You can’t keep doing that. If we can get people back in the ground, at least we’ll have something coming in.”
The Premier League expressed its disappointment at the lack of fans in stadiums, saying in a statement it was certain they would “be as safe or even safer than at any other public activity currently permitted”, adding: “Last season, Premier League clubs suffered £700m in losses and at present our national game is losing more than £100m per month. This is starting to have a devastating impact on clubs and their communities.”
The Premier League would not be drawn on whether it would take on board comments from the government to offer more financial support to clubs lower down the pyramid.
Frank Lampard, Chelsea’s manager, said the Premier League should step in to help out. “It’s important the Premier League as a collective looks at supporting the Football League, the leagues below and grassroots football,” he said. “Because that’s the base of why we’re all here.”
The Burnley manager, Sean Dyche, offered a dissenting view, saying the Premier League should not necessarily help. “If you are going to apply that rule of thumb, does that mean every hedge fund manager that is incredibly successful, are they going to filter that down to the hedge fund managers that are not so successful?”
The National League is expected to postpone the start of its season when it meets on Thursday amid huge concerns about how its clubs will cope without matchday revenue. The Yeovil chairman, Scott Priestnall, said: “I fear for sport. How is it meant to survive without supporters?”
The Rugby Football League is forecasting a significant six-figure loss, in excess of £250,000, because the Challenge Cup final on 17 October is now being played behind closed doors. There are also fears inside British Basketball League that some of its clubs will struggle to survive if they are unable to hold games with crowds. Its clubs are holding crisis talks on Wednesday.
Additional reporting by Aaron Bower and Greg Wood
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@Machpants said in Rugby Finances:
Haivng seen Oz lose Qantas - what's the status with NZR? AIG gone as of the end of this year, right? That hole has not (will not due to Covid) be filled?
AIG sponsorship runs through until end of 2021.
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@KiwiMurph said in Rugby Finances:
@Machpants said in Rugby Finances:
Haivng seen Oz lose Qantas - what's the status with NZR? AIG gone as of the end of this year, right? That hole has not (will not due to Covid) be filled?
AIG sponsorship runs through until end of 2021.
phew.
