Worcester-Sixways, LI and Wasps, WTF?

First topic message reminder :

And no, I don’t mean “welcome to Facebook” .
I logged onto the forum a few days ago to learn more about what has happened to these clubs expecting to a thread on this. But I had to write one instead. (Should I have used the title “who cares”?)

After listening to an OTB interview with an English reporter on the subject I gather that no staff working at Worcester have been paid for months, including those on low wages who will have missed mortgage payments and since their finances/ accounts still haven’t been properly kept they can’t yet be sold so there’s no hope of a white knight rescuing them. Their finances were completely mismanaged. Wasps appear to be in a better position and although they’ll be relegated will continue to exist. They are struggling to pay a tax bill and a debt incurred when they moved to London. (I thought this sounded weird, why move to a crazy expensive city packed with other sports teams?)

Below is an interesting article from the BBC on this topic.
https://www.bbc.com/sport/rugby-union/63053674
What shocked me about this article is the following: “ One club owner, who spoke on condition of anonymity, told BBC Sport: "I don't think there's one owner who'd tell you the model is working. It's completely flawed." Bristol Bears owner Stephen Lansdown recently said there is "just not enough money in the game,” If this is true, why is it true?

In the meantime , other clubs in the prem have voted to increase the salary cap at a time when many clubs are struggling with debts. This all sounds seriously worrying and suggests that clubs in the prem will soon have bigger financial problems in the future trying to pay even more in wages. Which suggests that more will start to go bust. And they voted to increase the salary cap? Am I missing something here or is this as dysfunctional as it sounds? And how can there not be enough money in the game in England? Rugby fans from other countries also regularly say how great the competition is, fans are absolutely showing up to see it, the competition is healthy, tv contracts are in place, cvc threw money at it recently. In theory things should be great. So….Welcome to Facebook?

(By the way this thread isn’t an invitation to slam the premiership or gloat. We are all rugby fans first and foremost and this could just as easily happen to your own club.)

No 7&1/2 wrote:Bristol take the European spot anyway.

I think I had read that somewhere as well. It does seem a bit nuts for the Premiership to be putting teams into the Euro Rugby with a losing record in the league. Not exactly a club competition featuring only the best European teams.

No 7&1/2 wrote:

LeinsterFan4life wrote:

No 7&1/2 wrote:

LeinsterFan4life wrote:

Welshmushroom wrote:From a PRL perspective 10 years ago I understood the club vs country battle that was going on.  They could see viable ways of gaining further money was to control various country internationals and then ransoming those Unions for additional release payments.

But now are different times and this model simply can't work in England.  France are now the powerhouse of club rugby and even they haven't gone down this route, often preferring to only sign overseas players that will either end their international careers or switch to qualify for JIFF or French international honors.

It's probably in the best interest of the club game in England to work outside of international windows and stop the country clashes.

The PRL now have enough to be dealing with, they should hand the reigns of the HC back to the unions, where it thrived previously.

You think it's just the PRL who decide on all things Europe?

One of two major players in getting the comp off the unions, which has turned out to be a disaster.

Why is it a disaster though? I never get this.

Well I'm guessing at the time it was because of the promises they made about how they were going to grow the revenue. Under Union management the competition was growing year on year. I believe they said it would be worth 100 million by now and from the latest stats revealed sponsorships and funding hasn't grown anywhere near the amount they thought promised. In fact it's barely grown at all especially as the Premiership and Top14 top loaded their TV deals to pay bigger margins into the local leagues than the Champions Cup so they could keep the majority of TV money to themselves without having to share it similar to what happens in the Champions Cup with the other TV deals.

Again the original poster may have had a different point but this might be one of the reasons European rugby really hasn't been a success under Club management.

So 2 of the groups have got a better deal. Not a disaster then.

No 7&1/2 wrote:So 2 of the groups have got a better deal. Not a disaster then.

It is when you consider the deliverable measure they stated as part of taking it over. They have failed on the metric they said they would deliver.

Also the clubs running it was always going to expose this sort of issue. The Irish always made sure the Pot grew and then divided it fairly among the Unions and generally took control of how these sort of deals were structured.

At the end of the day if you don't work along equal partnerships and weaken them instead by backdoor tactics like this you won't grow unity amongst the group. Which sure at the moment works in their favor but how long for? I'm sure France and Ireland will try to redraw the map again at some stage now the Premiership has reduced numbers which I'm sure will then prompt the question how the money distribution will work moving forward.

Welshmushroom wrote:

No 7&1/2 wrote:

LeinsterFan4life wrote:

No 7&1/2 wrote:

LeinsterFan4life wrote:

Welshmushroom wrote:From a PRL perspective 10 years ago I understood the club vs country battle that was going on.  They could see viable ways of gaining further money was to control various country internationals and then ransoming those Unions for additional release payments.

But now are different times and this model simply can't work in England.  France are now the powerhouse of club rugby and even they haven't gone down this route, often preferring to only sign overseas players that will either end their international careers or switch to qualify for JIFF or French international honors.

It's probably in the best interest of the club game in England to work outside of international windows and stop the country clashes.

The PRL now have enough to be dealing with, they should hand the reigns of the HC back to the unions, where it thrived previously.

You think it's just the PRL who decide on all things Europe?

One of two major players in getting the comp off the unions, which has turned out to be a disaster.

Why is it a disaster though? I never get this.

Well I'm guessing at the time it was because of the promises they made about how they were going to grow the revenue.  Under Union management the competition was growing year on year.  I believe they said it would be worth 100 million by now and from the latest stats revealed sponsorships and funding hasn't grown anywhere near the amount they thought promised.  In fact it's barely grown at all especially as the Premiership and Top14 top loaded their TV deals to pay bigger margins into the local leagues than the Champions Cup so they could keep the majority of TV money to themselves without having to share it similar to what happens in the Champions Cup with the other TV deals.

Again the original poster may have had a different point but this might be one of the reasons European rugby really hasn't been a success under Club management.

They have failed to deliver on every single one of their original promises and what really annoys me is how they've shut the door on tier 2 nations competing. I read that Heineken aren't paying as much as they were for the title sponsorship, I don't know if that's true though. It also looks as though attendances are falling, it's very easy to get tickets to any game here in Ireland now.

We haven't even mentioned this years format either.

Welshmushroom wrote:

No 7&1/2 wrote:So 2 of the groups have got a better deal. Not a disaster then.

It is when you consider the deliverable measure they stated as part of taking it over.  They have failed on the metric they said they would deliver.  

Also the clubs running it was always going to expose this sort of issue.  The Irish always made sure the Pot grew and then divided it fairly among the Unions and generally took control of how these sort of deals were structured.  

At the end of the day if you don't work along equal partnerships and weaken them instead by backdoor tactics like this you won't grow unity amongst the group.  Which sure at the moment works in their favor but how long for?  I'm sure France and Ireland will try to redraw the map again at some stage now the Premiership has reduced numbers which I'm sure will then prompt the question how the money distribution will work moving forward.

I'm sure they will. The nature of teams and organisations to get the best for themselves. If the other 2 leagues think there's a chance to increase their slice of the pie they'll try it. If it doesn't leave the English with the same amount of money or a reduced proportion it obviously means any change is a disaster so will be a hard task.

LeinsterFan4life wrote:

Welshmushroom wrote:

No 7&1/2 wrote:

LeinsterFan4life wrote:

No 7&1/2 wrote:

LeinsterFan4life wrote:

Welshmushroom wrote:From a PRL perspective 10 years ago I understood the club vs country battle that was going on.  They could see viable ways of gaining further money was to control various country internationals and then ransoming those Unions for additional release payments.

But now are different times and this model simply can't work in England.  France are now the powerhouse of club rugby and even they haven't gone down this route, often preferring to only sign overseas players that will either end their international careers or switch to qualify for JIFF or French international honors.

It's probably in the best interest of the club game in England to work outside of international windows and stop the country clashes.

The PRL now have enough to be dealing with, they should hand the reigns of the HC back to the unions, where it thrived previously.

You think it's just the PRL who decide on all things Europe?

One of two major players in getting the comp off the unions, which has turned out to be a disaster.

Why is it a disaster though? I never get this.

Well I'm guessing at the time it was because of the promises they made about how they were going to grow the revenue.  Under Union management the competition was growing year on year.  I believe they said it would be worth 100 million by now and from the latest stats revealed sponsorships and funding hasn't grown anywhere near the amount they thought promised.  In fact it's barely grown at all especially as the Premiership and Top14 top loaded their TV deals to pay bigger margins into the local leagues than the Champions Cup so they could keep the majority of TV money to themselves without having to share it similar to what happens in the Champions Cup with the other TV deals.

Again the original poster may have had a different point but this might be one of the reasons European rugby really hasn't been a success under Club management.

They have failed to deliver on every single one of their original promises and what really annoys me is how they've shut the door on tier 2 nations competing. I read that Heineken aren't paying as much as they were for the title sponsorship, I don't know if that's true though. It also looks as though attendances are falling, it's very easy to get tickets to any game here in Ireland now.

We haven't even mentioned this years format either.

Agin though it's all done through votes. It's not just the English as you tried to state.

Bit on the Beeb re funding:

'Exeter chief executive Tony Rowe says the authorities running rugby union must look into finding ways of increasing funding available to clubs.

London Irish went into administration last week, while Wasps and Worcester were removed from the top flight earlier this season after money issues.

Rowe bought a stake in a hotel at Sandy Park last December to help pay off government-backed Covid-19 loans.

"It's been a financially challenging time for all of us," Rowe said.

"But what I guess it has shown is just how underfunded the game of rugby itself truly is.

"That's something not only clubs have to address moving forward, but it's also for the likes of Premiership Rugby and those who run the game in this country to really look into.

"We can't afford to stand still in any shape or form. For the game to grow in the manner we all want, we have to be looking at developing every aspect of it, both on and off the field," he told the club website.

As well as selling its 75% stake in the hotel - which the Chiefs say was a £40m project - the club have also seen high-earning star names such as Stuart Hogg, Jack Nowell, Sam Simmonds, Joe Simmonds and Dave Ewers all leave the club this summer.

Exeter were profitable before the Covid-19 pandemic, largely because of the successful conferencing and events side of their business at Sandy Park.

Rowe feels that stream of funding will continue to return and help fund the club.

Exeter's women are preparing for a Premier 15s final later this month while the men - who reached the semi-finals of the European Champions Cup this season - aim to return to the Premiership's top four after missing out on the play-offs for a second successive campaign.

"The squads we are assembling for the new season are hugely exciting and clearly with an eye to the long-term future as well," Rowe said.

"We have never been a club who look for a short-term fix, we've always had a vision of where we want to go, how we want to get there and a realistic time frame of how long that will be.

"Our success in recent years has been built around having those solid foundations and that is what we will continue to do as we look to attack next season and beyond."'

I actually think Rowe is wrong. I would agree if the Premiership or the clubs themselves were owned by the RFU.

But I think what he is missing is that the clubs through the PRL have total control of the club game. It's their own responsibility to grow their own product which they haven't been able to do. They have failed themselves into improving the product. The RFU get no input or have no control when it comes to the league and how it is run.

The main reason why rugby is unprofitable is because they are paying players beyond any real terms valuations. I understand pressure from other leagues (Top14 & Japan) are creating these valuations as they can afford to set higher valuations based on their incomes.

Simple growth won't solve the problem either as it is a competitive market place. So for example if the PRL can increase Premiership by say 50% it would matter little if the Top14 for example experienced growth at say 100%.

The Top14 has in my opinion won the race to get to the top of the pyramid (much like the Premiership did in Football). Once that has been established it will be impossible to reverse.

This is why I think England cannot reverse this trend and that high profile overseas signings may be a thing of the past. This doesn't have to mean that there is nothing that can be done but that if rugby in England will really adapt it will have to change their current setups. I would argue investing in youth systems and development pathways would be a more positive way to go than trying to buy overseas players to sustain success.

I've said for years that the Top14 is the single biggest threat to the game growing globally and we are now starting to see this more than ever with most leagues becoming feeders to it.

To be fair the PRL tried to this themselves 20 years ago but it didn't work. Now I fear the Top14 has firmly established itself as the No1 league in the world when it comes to player budgets.

Well to a point yes. I don't think the RFU are particularly ingratiating themselves to many championship clubs in their approach to the organisation of promotion or media rights. As ever outside money from owners will be a big player for some clubs and it's that along with how much they are allowed to spend which will decide on big names etc. The increase in salary cap should see some big names return I'd imagine.

I would have thought the recent demise of London Irish, Wasps and Worcester will probably have a impact in terms of overseas players not thinking of the Premiership as the safest contracts to sign.

I'm sure there will be some coming in.  But not on the same scale as before and that in turn will hurt the credibility of the league.

What really needs to happen is Premiership sides should be making sure they all own club grounds, top training facility and good academy pathways.  Far better long term investments than signing a overseas player who will eventually leave and take that money with him.

I do like the idea of 2-tier league system, somewhat similar to cricket I guess.

A rebranding to Premiership 1 and 2 with 8-10 sides in each league with perhaps some crossover/playoff system in place. For me, we need to do a few things to jump start the English game.

1. Re-introduce promotion/relegation
2. Relegation not as big a deal as it would be currently
3. Interest in a 2nd tier with financing and TV

P1 - Saracens, Sale, Leicester, Saints, Quins, Exeter, Bath, Bristol
P2 - Gloucester, Falcons, Irish, Wasps, Worcester, Ealing, Jersey, Doncaster

I like to think they'd be genuine interest in watching both P1 and P2.....and it would throw up some great clashes. It should also be quite competitive in both p1 and P2 in theory. Perhaps even different caps for each league?

Also have some caveat in for relegation from P2 even too....haven't got that far yet.

Would just end up diluting teams even further impacting performances and development.

Its a nice idea on the face of it but in reality the Premiership already had to rely heavily on overseas players to stop standards and the quality of the product dropping.

I actually think England can probably only support 6 sides max. It's why I actually think the future should be to join the URC but that will never happen.

Joining the URC would be very bottom on every list....zero chance.

Welshmushroom wrote:Would just end up diluting teams even further impacting performances and development.

Its a nice idea on the face of it but in reality the Premiership already had to rely heavily on overseas players to stop standards and the quality of the product dropping.

I actually think England can probably only support 6 sides max.  It's why I actually think the future should be to join the URC but that will never happen.

So increasing the salary cap will help plug those gaps, the same as other leagues. I don't know where 6 sides comes from? Which sides would those be?

Welshmushroom wrote:I actually think Rowe is wrong.  I would agree if the Premiership or the clubs themselves were owned by the RFU.

But I think what he is missing is that the clubs through the PRL have total control of the club game.  It's their own responsibility to grow their own product which they haven't been able to do.  They have failed themselves into improving the product.  The RFU get no input or have no control when it comes to the league and how it is run.

The PRL have control over the Premiership to an extent. They have little to no control on the club game outside of that. The RFU has generally done a middling to terrible job with the Championship downwards which is their remit.

The whole "the Championship doesn't provide England players" thing need I remind you came from the RFU. Complete dribble which isn't unusual from the RFU.

I'd say Rowe is pretty spot on. He's names the PRL as well as the RFU as needing to do more and he's right. England were at the top of the pile in terms of support and finances but where other counties have advanced at a rate of knots the English club system has ambled along in their wake trying to keep up and wanting to avoid the harsh reality.

I don't think the Top 14 is as far ahead as people think. Ok they have signed a new TV deal for £100m a season which is huge. You have to take into account 30% goes to Pro D2 and the Top 14 regualar season is 26 rounds (nearly 1/3 more rouds than Prem or URC).

Per round the Top 14 deal is worth, £2.6m, URC £2.7 , and Prem £2.2m (up for renewal this season).

Top 14 would need bigger squads with star players on show less often.

Add the in the Top 14, they have a Sunday 8pm kick off game, which is very unpopular with fans, but very popular with TV (as there isnt any live sport at that time its one of the most watched games of the week).

If the Prem or URC introduced Sunday 8pm, and went to 26 rounds they would be looking at similar TV deals.

URC purposely shorten season so there are less games durning international breaks and stars are on show more, should mean can have smaller squads than top 14 teams. Premiership has reduced to 10 teams and in the long run this may benefit them. As they are earning more per round,per team than URC and Top 14.

The average attendance for clubs is a serious factor as well. If you look at the clubs in the Prem that have tended to have passable trading results (Saints, Tigers, Chiefs, Quins) they tend to have good sized crowds along with owning their own stadia and using it for other things when not in use.

Top14 is around 15k, the URC less than 10k. Prem is probably close to the URC. Bordeaux boast average attendance of 28k and both La Rochelle and Toulouse sell out home games pretty much every week. Gives revenue a boost and looks great to sponsors.

Average top 14 attendance, 14,841, average Prem 13,385 and average URC 9,500.

Premiership not far off Top 14, and actually have better income per team per round than the Top 14 (which the reduction to 10 teams).

URC has still a bit to go in terms of crowd size, but currently I don't think the Top 14 is massively ahead, its just got 1/3 more of a season which is a 1/3 more TV revenue and 1/3 more games to generate revenue. Not that its more popular or watched more in France than Premiership or URC.

So with three clubs going bust in one season what are the PRL and RFU going to do now to stop the rot in the prem? Are there meetings between them happeningto come up with a plan?  Do the PRL want more cash but no interference from the union? Have the PRL proposed changes to make the prem sustainable? All I’ve heard in terms of changes for next year’s prem  is the salary cap is going up (because clubs struggling with debt all want to spend more on wages again), relegation is back (even though almost no championship club has the ground capacity to get promotion) and the PRL want more money from the union….and that’s it.

The house is on fire so let’s buy new curtains, invite a friend to stay over and ask the neighbour to throw one bucket of water on the hall carpet.

Have I missed the part where a real plan is being devised/ put in place? I’m reading good ideas here but what are the clubs themselves coming up with and when are these plans to be enacted?

Sorry if I missed a key article where this was discussed. I genuinely haven’t heard anything apart from what I mentioned.

Any negotiations ahead of the new agreement have not been made public, so it's merely the public musings from people which have mainly been linked here.

For me the real problem is that despite these clubs going under there is still a handful of current owners who are looking to pass the clubs on. The issue currently is they can't get anyone to invest because they can clearly see from the stats there is no growth at club level and it currently is not paying for itself.

The issue the RFU have is they have major losses happening currently and they don't have any spare resources. In fact given their losses they will have to change the current player access agreement funding the PRL currently get so if anything it's going to get worse for clubs.

And the main issue every club in England currently has is the massive amount of debt burden each of them have. With less money likely coming in at the next set of renewals it's impossible to come up with a clear strategy that will work.

I'd be interested to see how many clubs will actually end up going back to spending up to the cap.

'In fact given their losses they will have to change the current player access agreement funding the PRL currently get so if anything it's going to get worse for clubs.'

The agreement is coming up shortly so we'll see. It's a great opportunity for the RFU to get some more control of players and help clubs with costs of central England players potentially. Could well be a win win.

No 7&1/2 wrote:'In fact given their losses they will have to change the current player access agreement funding the PRL currently get so if anything it's going to get worse for clubs.'

The agreement is coming up shortly so we'll see. It's a great opportunity for the RFU to get some more control of players and help clubs with costs of central England players potentially. Could well be a win win.

Be interested to see how though? Given the RFU have serious losses to counter balance and make back up it's probably safe to assume they won't be investing more money into the PRL. So if it's less money with Clubs having financial problems I'm not sure were the win win comes in? I mean they could probably take away some of the player restrictions on rest periods which might help the Club in the short term but I doubt it will do anything for player welfare.

I imagine that they aren't simply looking to the same deal. May well be more money for more access to England players allowing the clubs to then use that money for padding their squads.

No 7&1/2 wrote:I imagine that they aren't simply looking to the same deal. May well be more money for more access to England players allowing the clubs to then use that money for padding their squads.

Sure it may happen. But the RFU who are going to be the ones paying have already come out and said they overpaid in the last deal. That doesn't point to a increased offer. Given that statement I would imagine the best the PRL can hope for is the same money as before. But as I pointed out the RFU need to make cuts to their spends. They have already cut the community game funding in the National League and given the massive amount of savings they need to make I can't see them not looking at reducing the current deal.

Keep in mind when this deal was negotiated at the time the PRL had a lot more negotiating power than they do now where they could walk away from the deal without major impacts to their league. That simply isn't an option for them currently. Walking away from a new deal now would put serious financial restrictions on at least half of the league.

But with different conditions to the agreement comes different financial envelopes. That's why it's a good time for the rfu to press to get more of what they want. And yes to your last point.

Fair point. Probably will no doubt depend on what conditions the RFU will add in terms of adding value to the deal.

My concern would be that they don't add any. But its all speculation at this point so we will have to see how it all pans out when they have to renew it.

Welshmushroom wrote:

No 7&1/2 wrote:I imagine that they aren't simply looking to the same deal. May well be more money for more access to England players allowing the clubs to then use that money for padding their squads.

Sure it may happen.  But the RFU who are going to be the ones paying have already come out and said they overpaid in the last deal.  That doesn't point to a increased offer.

Because it pays to go into a negotiation saying you think you got a good deal last time...

formerly known as Sam wrote:

Welshmushroom wrote:

No 7&1/2 wrote:I imagine that they aren't simply looking to the same deal. May well be more money for more access to England players allowing the clubs to then use that money for padding their squads.

Sure it may happen.  But the RFU who are going to be the ones paying have already come out and said they overpaid in the last deal.  That doesn't point to a increased offer.

Because it pays to go into a negotiation saying you think you got a good deal last time...

Are you suggesting they got a good deal? 200 million over 8 years to essentially control 45 players. That's 25 million per season. That works out at 555K per player. The majority of any England Squad are nowhere near that as part of their club salaries and that's for an entire year.

Do you think overpaying based on player value constitutes a good deal?

Beeb:

Former England captain Tom Wood has landed a key role on Premiership Rugby's new sporting commission, as the league looks to transform how the club game is run.

The commission will be handed unprecedented decision-making powers as part of a range of governance changes.

It comes after a disastrous period off the field, with Worcester, Wasps and London Irish all going out of business.

Wood won 50 caps for England, retiring in 2022 after a 15-year career.

The former flanker won two Six Nations titles in 2011 and 2017, captaining the national side on their tour of Argentina in 2013, and led Northampton to the Premiership title in 2014.

He will provide a player's perspective as part of the seven-person commission, which will include three more independent figures from sport and business.

It is understood Ministry of Justice board member Mark Rawlinson, who was part of the "Red Knights" group which attempted to buy Manchester United in 2010, will also be part of the commission, as will leading football executive Jane Purdon and governance expert Carys Williams.

The panel will be chaired by Premiership Rugby official Nigel Melville and will also include chief executive Simon Massie-Taylor and rugby director Phil Winstanley.

The group has been given the power to make decisions on behalf of the 10 remaining Premiership clubs over crucial areas such as the calendar and season structure, in a bid to avoid the conflict and vested interests that has hamstrung the league's decision-making process.

As outlined last December, other governance changes will include the establishment of a financial monitoring panel, which will oversee all club finances in a bid to avoid the fates that befell Worcester, Wasps and London Irish.

Meanwhile, talks continue over a new Professional Game Agreement between the Premiership, the Rugby Football Union and the Rugby Players' Association, as the game in England desperately attempts to recover from the calamitous events of the past nine months.

Hi No.7 thanks for posting that. Is there any news on when they’ll issue a report?

Not seen anything since.