How Long Can This Go On?

https://www.theguardian.com/sport/2019/apr/08/exeter-in-the-black-premiership-rugby-losses-year-to-june-2018

Only Exeter are making a profit - how long can this keep going before it all comes down with a mighty crash?

OK ignoring the issues with reported profit loss being a pretty poor indication of financial stability and sustainability it is pretty inevitable that ring fencing will happen, and needs to. It may lose a big chunk of romance from the club game (and had it happened when it was first being seriously mooted then Exeter never would've been a thing!) but pragmatism has to take over eventually. better it happens in a planned way that the pooshow that was the regionalisation of the Welsh clubs. The real argument will come down to the number of teams and impacts that has on the number of games played.

Its been said in the other thread but if Tigers go down it will be a big blow to all the Premiership clubs, and if anything hasten their resolve to have a more stable model.

Gooseberry wrote:OK ignoring the issues with reported profit loss being a pretty poor indication of financial stability and sustainability it is pretty inevitable that ring fencing will happen, and needs to. It may lose a big chunk of romance from the club game (and had it happened when it was first being seriously mooted then Exeter never would've been a thing!) but pragmatism has to take over eventually. better it happens in a planned way that the pooshow that was the regionalisation of the Welsh clubs. The real argument will come down to the number of teams and impacts that has on the number of games played.

Its been said in the other thread but if Tigers go down it will be a big blow to all the Premiership clubs, and if anything hasten their resolve to have a more stable model.

When it is ringfenced can the pro14 get an apology.
Also will that make the French top14 the "best league in the world" as it will still have relegation?

Apology from who?

I think it's a bigger issue.

Look at the Welsh regions and the money they are losing also.

Rugby in general is spending more money than it's making (just like football is)

When things like wage caps are brought in, clubs just find ways around this. So long as you have an investor (a private multi millionaire or a union like the SRU) that is willing to stump up the operating costs and forgive the lack of profit, then you are ok.

As soon as one of thee investors decides they and their money are offski, then you are going to be in a world of pain.

Ironically, ringfencing is hampered by exactly this. If you ringfence the clubs in the GP and somoene goes bust, the current method of that club being demoted to lower leagues is taken away.

Its all a bit complicated!

carpet baboon wrote:

Gooseberry wrote:OK ignoring the issues with reported profit loss being a pretty poor indication of financial stability and sustainability it is pretty inevitable that ring fencing will happen, and needs to. It may lose a big chunk of romance from the club game (and had it happened when it was first being seriously mooted then Exeter never would've been a thing!) but pragmatism has to take over eventually. better it happens in a planned way that the pooshow that was the regionalisation of the Welsh clubs. The real argument will come down to the number of teams and impacts that has on the number of games played.

Its been said in the other thread but if Tigers go down it will be a big blow to all the Premiership clubs, and if anything hasten their resolve to have a more stable model.

When it is ringfenced can the pro14 get an apology.
Also will that make the French top14 the "best league in the world" as it will still have relegation?

The pro 14 owes its watchers an apology first

Gooseberry wrote:OK ignoring the issues with reported profit loss being a pretty poor indication of financial stability and sustainability it is pretty inevitable that ring fencing will happen, and needs to. It may lose a big chunk of romance from the club game (and had it happened when it was first being seriously mooted then Exeter never would've been a thing!) but pragmatism has to take over eventually. better it happens in a planned way that the pooshow that was the regionalisation of the Welsh clubs. The real argument will come down to the number of teams and impacts that has on the number of games played.

Its been said in the other thread but if Tigers go down it will be a big blow to all the Premiership clubs, and if anything hasten their resolve to have a more stable model.

Why exactly does ringfencing need to happen? What advantage does it provide that the current system doesn't?

No 7&1/2 wrote:Apology from who?

Well all the GP owners and fans who said that lack of relegation made it an inferior league, as teams had nothing to play for in the second half of the season and had no incentive to improve. How's that?

Gooseberry wrote:

carpet baboon wrote:

Gooseberry wrote:OK ignoring the issues with reported profit loss being a pretty poor indication of financial stability and sustainability it is pretty inevitable that ring fencing will happen, and needs to. It may lose a big chunk of romance from the club game (and had it happened when it was first being seriously mooted then Exeter never would've been a thing!) but pragmatism has to take over eventually. better it happens in a planned way that the pooshow that was the regionalisation of the Welsh clubs. The real argument will come down to the number of teams and impacts that has on the number of games played.

Its been said in the other thread but if Tigers go down it will be a big blow to all the Premiership clubs, and if anything hasten their resolve to have a more stable model.

When it is ringfenced can the pro14 get an apology.
Also will that make the French top14 the "best league in the world" as it will still have relegation?

The pro 14 owes its watchers an apology first

What for having 7 teams all fighting for something with three games to go or having the most teams in the knockout stages of the Euro cup?

It's now an inferior conference isn't it?

My question is how could Wasps have £10m more turnover than anyone and still lose £10m

Obviously each club has different expenses so we can't compare each club's losses

Well done Exeter.

Good business built up over a few years, built a strong fan base, they only spend what they have and no big wages for journeymen, oh and a good coach in charge.

Its not rocket science is it.

TightHEAD wrote:Well done Exeter.

Good business built up over a few years, built a strong fan base, they only spend what they have and no big wages for journeymen, oh and a good coach in charge.

Its not rocket science is it.

And take chances on young players, many of them out of an impressive academy

marty2086 wrote:

TightHEAD wrote:Well done Exeter.

Good business built up over a few years, built a strong fan base, they only spend what they have and no big wages for journeymen, oh and a good coach in charge.

Its not rocket science is it.

And take chances on young players, many of them out of an impressive academy

That's the key. Their academy is so strong and they actually give them game time to boost confidence and experience. Coupled with the fact that probably out of all of the premiership teams, Exeter is one of the most desirable locations, it's a recipe for success.

bluestonevedder wrote:

marty2086 wrote:

TightHEAD wrote:Well done Exeter.

Good business built up over a few years, built a strong fan base, they only spend what they have and no big wages for journeymen, oh and a good coach in charge.

Its not rocket science is it.

And take chances on young players, many of them out of an impressive academy

That's the key. Their academy is so strong and they actually give them game time to boost confidence and experience. Coupled with the fact that probably out of all of the premiership teams, Exeter is one of the most desirable locations, it's a recipe for success.

Of course it helps if you have a ground which you can sell for a very large profit and an owner who can subsidise by overpaying for sponsorship.

Exiledinborders wrote:

bluestonevedder wrote:

marty2086 wrote:

TightHEAD wrote:Well done Exeter.

Good business built up over a few years, built a strong fan base, they only spend what they have and no big wages for journeymen, oh and a good coach in charge.

Its not rocket science is it.

And take chances on young players, many of them out of an impressive academy

That's the key. Their academy is so strong and they actually give them game time to boost confidence and experience. Coupled with the fact that probably out of all of the premiership teams, Exeter is one of the most desirable locations, it's a recipe for success.

Of course it helps if you have a ground which you can sell for a very large profit and an owner who can subsidise by overpaying for sponsorship.

How much are they overpaid for sponsorship?

Isn’t Exeter’s academy so strong because they draw from the whole region (Devon, Cornwall, etc)? And it’s a strong rugby region. They are a regional team in all but name!

carpet baboon wrote:

Gooseberry wrote:

carpet baboon wrote:

Gooseberry wrote:OK ignoring the issues with reported profit loss being a pretty poor indication of financial stability and sustainability it is pretty inevitable that ring fencing will happen, and needs to. It may lose a big chunk of romance from the club game (and had it happened when it was first being seriously mooted then Exeter never would've been a thing!) but pragmatism has to take over eventually. better it happens in a planned way that the pooshow that was the regionalisation of the Welsh clubs. The real argument will come down to the number of teams and impacts that has on the number of games played.

Its been said in the other thread but if Tigers go down it will be a big blow to all the Premiership clubs, and if anything hasten their resolve to have a more stable model.

When it is ringfenced can the pro14 get an apology.
Also will that make the French top14 the "best league in the world" as it will still have relegation?

The pro 14 owes its watchers an apology first

What for having 7 teams all fighting for something with three games to go or having the most teams in the knockout stages of the Euro cup?

The change to European qualification certainly helped make Pro14 more competitive. So perhaps they should be thanking PRL

The Oracle wrote:Isn’t Exeter’s academy so strong because they draw from the whole region (Devon, Cornwall, etc)? And it’s a strong rugby region. They are a regional team in all but name!

You're not wrong, and it's undoubtedly a key part of Exeter's success. If Wales were to mix up the regional game again they should look to Exeter to see how it can work. Cornish Pirates are ostensibly fierce rivals to Exeter etc., yet they play a key part in feeding them, along with Taunton, Torquay, Plymouth etc.

They've also 'sold' the club well - the point about the ground is true, but they've developed nicely, including plans of building a hotel on site, I believe.

In terms of over spending, I get the sense that rugby is 'holding on' for a commercial boom in the game. Look at how the finances in football have increased in the last 20, 10, and even 5 years. It's ridiculous. Rugby likewise has seen a boom from obviously going pro, to the growth from the mid to late 2000s, and then again around 2013ish with the greater finances in European rugby.

Rugby is clearly seen as a place for commercial interests to make money. Whether that's telecommunications, private equity, or any other usual suspect. I sense the growth in America with the 7s is playing a big part, as are global audiences more generally. USA experienced a soccer boom between 2010 and 2014, they only need a Rugby World Cup to really 'get' a new generation in to the sport and not see it as NFL's inferior, weird, European cousin.

Which, as far as I understand it, is a lot of speculation that could quite easily lead to a collapse of the game. Certainly in Wales the game is being torn apart - there simply isn't the infrastructure to support an adequate semi-pro or even amateur game, let alone improve those tiers to push standards in the pro game and pathways. Wales is holding on for either the English or the Irish to effectively 'succeed' in spreading the club game into new markets and hope the money trickles down. At least, that's what I think is happening.

As for the English clubs, presumably they see themselves as better placed to become the European destination for a Premier League style Premiership that attracts the world's talent. For all the money and lifestlye in France it seems like there are deep structural issues that could see them lose the advantage they currently hold over England/the Pro14.

It's a tricky one. I can't really see rugby ever becoming a global brand or commercial success in the way football has - not just in terms of money and reach, but also in things like 'identity'. The Leicester shirt seemed to be 'the' shirt to wear for English people, wherever they lived, in the late 90s and mid 00s. Not sure that's still the case - and not just because of the rise of Saracens and Exeter. The international game is still the pinnacle of rugby and, in that sense, it's reliant on growing the game into places like USA, Brazil, possibly other European and even Asian countries, for it to really take off.

Purely guesswork, but I could just as likely see some clubs go the way of London Welsh as they are to challenge Toulon and Racing. Wasps are facing that exact test now having relied on a commercial partnership to effectively push them back into contention in their league and develop the brand once again. If the grassroots is lost -and it's not an 'easy' game to play, it's not like street football, it relies on community structures surviving and thriving - rugby could end up destroying itself before its had a chance to grow.

No 7&1/2 wrote:It's now an inferior conference isn't it?

It's called the PRO14 Championship actually....

TightHEAD wrote:Well done Exeter.

Good business built up over a few years, built a strong fan base, they only spend what they have and no big wages for journeymen, oh and a good coach in charge.

Its not rocket science is it.

So the fact that Exeter are £14m in debt doesn't come in to the equation right?

As long as they make £1m or more profit - then everything is rosy?

RugbyFan100 wrote:

TightHEAD wrote:Well done Exeter.

Good business built up over a few years, built a strong fan base, they only spend what they have and no big wages for journeymen, oh and a good coach in charge.

Its not rocket science is it.

So the fact that Exeter are £14m in debt doesn't come in to the equation right?

As long as they make £1m or more profit - then everything is rosy?

Do you actually know what debt is?

Can you name a company without debt?

Quick look at Exeters accounts, where does the 14m figure come from exactly?

Maybe someone else can find it

Exeter Accounts

There are a few things which worry me:
A lot of the clubs seem to be waiting for "something to turn up" which will be the catalyst for rugby expanding into a boom sport, England had two opportunities, firstly in the aftermath of the 2003 win, when for a few moments every child wanted to be Johnny Wilkinson instead of David Beckham, and secondly up to and around the 2015 RWC but with England failing to get out of the group it killed off a lot of the momentum. I don't see any key events in the future that are likely to trigger a "boom" in rugby.
Certain club owners/chairmen seem to think that somehow they have a valuable product that is worth the same as soccer and are intent on turning the sport into a financial game of "devil take the hindmost" without understanding that you can't be Manchester United on Rotherham United attendances and revenues.
Finally the projected "World League" that no one really wants, if it ends up taking the 6 nations of FTA will the end of of public interest in the sport at any level.

tigertattie wrote:I think it's a bigger issue.

Look at the Welsh regions and the money they are losing also.

Rugby in general is spending more money than it's making (just like football is)

When things like wage caps are brought in, clubs just find ways around this. So long as you have an investor (a private multi millionaire or a union like the SRU) that is willing to stump up the operating costs and forgive the lack of profit, then you are ok.

As soon as one of thee investors decides they and their money are offski, then you are going to be in a world of pain.

Ironically, ringfencing is hampered by exactly this. If you ringfence the clubs in the GP and somoene goes bust, the current method of that club being demoted to lower leagues is taken away.

Its all a bit complicated!

So what model of financing competitive rugby teams in England do you suggest?

RugbyFan100 wrote:

So what model of financing competitive rugby teams in England do you suggest?

What would you suggest since you are complaining about one that doesn't involve debt?

Did you find the 14m debt of Exeters?