Are Wasps the tip of the iceberg?

Wasps are in serious financial trouble. They are losing £2m per year, owe their "owner" £6.5m and only have enough cash to last till the end of this season. Who else are in trouble? Well I read today that Bath lost £1.8m in 2010/11 and owe Bruce Craig £4.5m. Scarlets have struggled in the past and needed WRU bail out. Cardiff Blues are apparently in trouble. In Scotland i can remember major financial problems for Edinburgh (with the region being bought back by the SRU?).
While trying to investigate the situation elsewhere I stumbled on to a free site that uses data logged at companies house and among other things calculates the Net Worth. Whilst not infallible it gives some idea as to the financial stability of companies.

England

RFU : Do not file with Companies house being a Provident Society
Bath Rugby Ltd -£1.8m
Exeter Rugby Group Ltd +£7.0m
Gloucester Rugby Ltd +£3.4m
Harlequin Football Club Ltd (went dormant Jan 2012 – must have created a new company)
Leicester Football Club PLC +£18.4m
London Irish Holdings Ltd -£3.6m
London Wasps Holdings Ltd -£11.1m
Newcastle Rugby Ltd -£5.4m
Northampton Saints PLC +£12.0m (Northampton Rugby Football club Ltd +£3.8m)
Sale – Cannot find
Saracens Ltd -£23.6m
Worcester Warriors – 5 companies found for Sixways – all dormant


Scotland
Scottish Rugby Union PLC -£12.2m
Are Edinburgh and Glasgow owned by SRU?


Wales

WRU +£5.3m
Cardiff Rugby Football Club Ltd -£6.0m
Dragons Rugby Ltd -£2.2m
Ospreys Rugby Ltd -£2.9m
Scarlets Regional Ltd -£2.1m

I think it is fair to say some clubs are at real risk.

Sarries look like they're ready to crash and burn! Playing the risky strategy running a club on debt! If their owner leaves they're screwed to put it lightly!

V. Interesting post, but a depressing reminder as a Wasps fan that we may not be around much longer at this rate!

I have faith in Wasps. I think they are important to the rugby scene in the UK and especially London and somebody will see this and help them out financially. They may well drop down and then with the economic hit of not being in the AP, their nadir will be rather dark but I think their attitude and history means they will somehow survive. And woe betide us all when they get properly back on track

Are these figures quoted as the overall positions of the clubs?

Are these quotes the cubs net worth? Or what the club makes each season?

Net Worth.

Just gives an indication of the accumulated debt in some cases.

Brilliant work 12:02:13, this makes very interesting reading. It is no surprise that with the exception of Bath, every club which owns its own stadium is healthier, of course this is down to owning the stadium making the figures better, but in general all of those clubs are run in a sustainable manner. If I were a Sarries fann I would be very concerned as if the backer loses interest they could be in a world of trouble.

I believe that the company that owns Quins is called Mosaic

On the basis of the figures the WRU is capable of supporting 2 regions. Scarlets and Dragons are the only ones with their own facilities and have the lowest debts. Re badge them East Wales and West Wales..... job done?

I am honestly quite shocked at the amount of the Jeff sides that are not in clover, as I honestly thought that they were all (well in general) being run rather successfully.

What I find the most worrying is that Saffercens are further in the red than all the other (in debt) Jeff sides put together (and all the Welsh and Scottish sides put together too). That surely can't carry on for too long.

I'm pretty sure that Quins have two share holders (each holding a single share) called Blue Sky Leisure Limited, and Blue Sky Leisure Ltd.

I'm not sure how what/ if anything else the Blue Sky companies do other than run Quins, but they seem to be in a relatively healthy position with £177k gross profit last year, and with assets outstripping liabilities by about £7m. However they do still seem to be making a loss of about £1.8m pa after tax.

I'm not an accountant though so i don't really know what all of that means.

Harlequins made a good move using Surrey Sports Park as their training grounds. As a student at that University they've used it to their advantage to publicise the team quite well, certainly they sell all the Harlequins gear at the sports park shop. Not only this but the Sports park is an olympic training venue so gets big publicity in the area. Add this with offering cheap tickets to students, and you have healthy profit as said above. Just a shame I support Wasps...

They also let our University use the Stoop for our Varsity rugby, which exposes more students to the brand as well as making some money from the ground on a day when Quins aren't there. If you have a Stadium, you have to make the most of it

What I find the most worrying is that Saffercens are further in the red than all the other (in debt) Jeff sides put together (and all the Welsh and Scottish sides put together too). That surely can't carry on for too long.

I suspect quite a lot of that debt has come from the original squad scrapping (terminating a lot of contracts) and chasing the new stadium complex. They have a very dedicated part owner in Wray and some serious sugar daddies in a SA consortium who own the rest of the club. I think the idea is the short term losses are written off because they are facilitating the growth of the Sarries brand and the gain of the stadium with financial stability to be sorted on a yearly basis within a few seasons and then the profits after that slowly fed back to pay off the debts to the owners. A very ambitious plan but one that Sarries needed.

They also let our University use the Stoop for our Varsity rugby

Tigers host the Leicester equivelent between Uni of and De Mont. Curiously neither of the Leicester Uni's ever think of inviting Loughborough into the varsity, can't think why...

it's worth noting that net assets/liabilities aren't necessarily indicative of how a club is doing financially. Quins for example seem to have some fairly heavy loan/debenture payments each year that put a dent in their profits (disclaimer... again I'm no forensic accountant but you can check the public accounts from Companies House).

So owning your own ground is only part of the solution - even if you own it you still need to pay for it!

Good to see that some clubs are taking a long term view though and really making the effort to become financially viable using innovative practices and developing their brand in their communities.

have some fairly heavy loan/debenture payments each year that put a dent in their profits

Debentures and loans differ on the basis that debentures are secured as equity where as loans are debt. The difference being the debenture debt is secured on the terms of the issuing company (in this case the club) and is then sold, normal debt is obtained at the terms of the lender.

Most big companies will have a mixture of both with long term debts secured through debentures, loan notes etc.

@ Sam - I think you can still be obliged to repay a debenture? It's just secured and serviced in a different way. They normally act as a medium term corporate finance facility.

That's possibly the most boring thing I've ever typed. Sorry all.

http://www.forbes.com/profile/johann-rupert/

Not too worried about Saracens when they have this man backing them. 199th richest in the world.

http://www.thisismoney.co.uk/money/markets/article-2126222/Saracens-rugby-club-chairman-Nigel-Wray-sells-22-5m-slice-pizza-shares.html

Also with Nigel Wray running the show, Sarries will be fine.

The new stadium will help gain some stability.

I wonder if any of these clubs are or are strongly connected with UK registered charities.

I think you can still be obliged to repay a debenture?

You are, it's specified by the issuing company. Normally a static value with a fixed pay per annum to the owner of the debenture.

Not too worried about Saracens when they have this man backing them. 199th richest in the world.

That's not stability though as all they are doing is writing up debt against the rich owner as opposed to debt against a bank. They still owe money from the losses, you're right in that the new stadium will certainly help matters. The accumilation of losses could do with stopping otherwise after a while the Saffa consortium might lose patience.

Sam the South Africans won't be losing patience yet with Sarries still doing quite well.

There's also Nigel Wray there. I am sure he won't allow the club to fall into ruin.

I'm sure he won't but the sooner Sarries start paying their own way the sooner it won't matter if the Saffa lose interest. Sure having a sugar daddy is really useful to you whilst you need their input but leaning on them constantly ala Wasps is not the way to run a successful club. Sarries are certainly developing the right way with the new ground and revamped image.

But surely the Sarries must be losing money hand over fist with their loss-making bogoff offers and minimal home support?

Even at Barnet, they couldn't rectify the revenue imbalance. Or could they?

Jesus, how do Exeter make £7m a year? Guess it is a very low wage set up and high attendances, but still to make that much is pretty incredible.

Sam and Portnoy we won't know yet. Let's wait and see.

The one thing that Saracens is doing is improving their brand awareness.

The Sarries players involved in the 6 nations, only English side in the quarter finals and high profile games at Wembley will make Saracens a more well known team.

Saracens never seen to be out of the media spotlight these days.

It will be interesting how much their players are on and how long is the contract. They have doubled Attendance, and get tv and euro money so harly a suprise that they made so much first year this year would be closer to break even I would say

On Sariess could we see them play Saints, Tigers, Quins all at HQ that would bring in some money. And If they had no support to cheer them on it would make little differnce

No doubt As will trip along in a few minutes to fill in the blanks.

As far as I'm aware, the s are member-owned and have their own ground (which in itself represents a small fortune in rentals).

The Tigers were very, very lucky at the advent of professionalism. They just happened to be on a rising tide of success as the likes of erstwhile local competitors like Moseley and Coventry were on the way down. Also WR had always been rented by the City council at a peppercorn rate and were subsequently granted to buy the ground at a (let us say) less than true market value.

I think that all the top teams money wise have their own grounds. Because the four irish have their own grounds it makes it be home.

From what I can tell most of the london clubs struggle because they don't have a home or sold it and that is why Sarries, Wasps and LI are stuggling with Att and inturn money

I am sure Tigers bring in as much if not more then sarries or LI from renting out thier ground for events then the others pay to rent. That results in a double gain as no rent plus rent