Merger of URC & English Prem considered

Tuesday 8 October 2024

https://www.walesonline.co.uk/sport/rugby/rugby-news/two-choices-tabled-urc-english-30094854

A merger of the United Rugby Championship and English Premiership split into two divisions with promotion and relegation is being considered.

Both competitions are looking at ways of increasing the value of future broadcasting deals with neither the URC or the Gallagher Premiership achieving the level of commercial success it wants. Talks are taking place between the relevant powerbrokers from both competitions, along with private equity firm CVC, who own a 27% share on the Premiership and 28% of the URC.

One option being seriously considered is merging both leagues into two divisions with promotion and relegation. All sides would play each other home and away with play-offs at the end of the season.

The other option is an Anglo-Welsh conference sitting within the URC where Wales' four professional clubs - Cardiff, Dragons, Ospreys and Scarlets - would essentially play English sides throughout the season until the end of season play-offs. One potential sticking point here could be the number of Welsh clubs, with some English sides favouring two and others three.

WalesOnline understands there is a difference of opinion among the English clubs with some preferring the Anglo-Welsh conference and others wanting regular fixtures against heavyweight Irish provinces, while there are also those who would prefer not to have Italian or South African sides involved. Wales' clubs would prefer an Anglo-Welsh conference because it would cut out travelling, reignite historic rivalries and potentially lead to improved attendances while there is also a salary cap in England which would increase the chances of the Welsh sides being competitive.

Any league too big becomes a convoluted mess.

Having a promotion and relegation league won't work in my opinion as you are basically creating two tiers. Who gets what money?

Having an English and Welsh League on one side and an Irish, Scottish, Italian and South African League could work.

Having a home and away round robin is in my opinion the best way to have a league as all teams play everyone else home and away which is as fair as it gets.

Question though is how do you fit 22 rounds of regular season, plus playoffs(assume it will be top four from each side) into extra three weekends plus european champions cup and tests with enough rest for players?

In all honesty, if this goes like Poopie in a handbag I sincerely hope SARU stops putting their trust in global partnerships and just build our 14 provinces into a league where talent is drafted so everyone gets their share of tealent, it kight take time to become financially viable, but until then, just pay the players what they can. Those wanting to play overseas can go.

The sustainability of SA rugby doesn't primarily lie in how much you can pay top players. We have hundreds of talented players coming through every year. We do not have enough professional teams to accommodate them all.

If salaries need to be capped at R30 000 000 per team, then so be it. The quality will build within a few years.

Besides there are ways to increase team revenues that has never been utilised within our setup.

An additional source of income can come from club cards where if you buy a sponsorship as an individual for R1 000, if Griquas for example sell 10 000 clubs sponsor cards that gives the club an additional 10million to be paid as bonuses to the players.

Might not sound like much, but if properly marketed it can become a solid source of revenue for a club.


Though all this depends on a quick conclusion to this "merger" or failure there of.


We need to strike while the iron is hot, Springbok rugby and its popularity is at an alltime high in SA.

The URC is great. Leave it alone!

Rugby union has a terrible record when it comes to expanding leagues or trying to keep second division pro rugby financially viable. The sport is fragile. If a competition works then for Gods sake don’t mess with it!

And really who is going to turn up to watch the second division pro rugby tournament ? Even in France the attendances at the pro D 2 are much lower than the top14. I don’t see how clubs that get relegated won’t be in financial trouble because of it.

The premiership needs to link their salary cap to a clubs turnover. Or do something radically different. Until they change their current system that has caused clubs debts to rise then joining any tournament won’t fix a thing. There will still be pro English clubs going bankrupt. Except it’ll be happening in the URC instead.

And it would cheapen the European cup.

I’m not convinced it would vastly improve the region’s fortunes in Wales either.

Stupid idea and as I understand it approaches were made and rebuffed ( read on here) Why should the URC bail out a failing english league? Why would the english clubs accept the welsh into their league? It would mean english clubs dropping to the championship or the welsh entering in the championship.

the URC is doing fine with a good standard of rugby, a competitive league, increasing attendances. What would the english clubs have to offer us? Nothing.

The RFU and the PRL have been bad faith actors and are roundly distrusted. this is nothing more than nonsense invented to drive clicks to wales on line

I think this news story comes from the predictions of what will happen with European Rugby. I believe the current agreement ends at 2030 and nobody knows if it will even exist after that. French rugby is running away with their own league and they may go inhouse potentially by focusing purely on their league.

English clubs are worried about what happens if they lose another 4 - 6 games in a season.

URC will also have less games but they have more options to expand than Premiership rugby has. I'd love to see the league becoming a more inclusive league to countries that World Rugby simply wont support enough. Personally I would love in the long term for teams from countries that really could expand the sport if it took off in those countries (Portugal, Spain, Germany, Holland etc) Granted they would have to be careful about how expansion would be handled but I believe if rugby truly wants to tap into the bigger money they have to take the sport to countries with massive populations.

The World Rugby project in the Oceana Countries (Fiji, Tonga, Samoa etc) are a total waste of time as most those places literally have no population. I understand they produce great rugby players but to build teams in those countries is poor strategy as those places dont have the money or population to develop rugby.

For me the sport of rugby really needs to try to get the sport landed in the major european nations. USA has to many sports and that project is not an easy sell over there at the moment. If world rugby actually put all its eggs into Europe and really push the growth there then all world teams will benefit when they become rugby heartlands as they can then move their support elsewhere.

Welshmushroom wrote:I think this news story comes from the predictions of what will happen with European Rugby.  I believe the current agreement ends at 2030 and nobody knows if it will even exist after that.  French rugby is running away with their own league and they may go inhouse potentially by focusing purely on their league.  

English clubs are worried about what happens if they lose another 4 - 6 games in a season.  

URC will also have less games but they have more options to expand than Premiership rugby has.  I'd love to see the league becoming a more inclusive league to countries that World Rugby simply wont support enough.  Personally I would love in the long term for teams from countries that really could expand the sport if it took off in those countries (Portugal, Spain, Germany, Holland etc)  Granted they would have to be careful about how expansion would be handled but I believe if rugby truly wants to tap into the bigger money they have to take the sport to countries with massive populations.

The World Rugby project in the Oceana Countries (Fiji, Tonga, Samoa etc) are a total waste of time as most those places literally have no population.  I understand they produce great rugby players but to build teams in those countries is poor strategy as those places dont have the money or population to develop rugby.

For me the sport of rugby really needs to try to get the sport landed in the major european nations.  USA has to many sports and that project is not an easy sell over there at the moment.  If world rugby actually put all its eggs into Europe and really push the growth there then all world teams will benefit when they become rugby heartlands as they can then move their support elsewhere.  

Yeah this could become some sort of cup competition to replace the European cup. I just can't see how the European cup will continue, with the pool stages reduced to a mess and the competition hidden away on Premier sport, the interest will collapse.

It used to be my favourite competition in rugby, now I couldn't even tell you the dates it's being played on. I'm far more interested in what is happening in the URC.

Same - I dont think it will survive and given the costs involved and lack of interest from a majority of the participating teams has killed this product. Tinkering with this ruined which 10-15 years ago was the probably the best club product.

I do think some of the reason this happened was that French rugby made such a big play in terms of developing their own league and making that a bigger cash cow.

Now that has happened I think it will end European rugby. I'm just surprised the powers at the top of those competitions didn't see this coming. I saw this coming about 7 years ago.......

Welshmushroom wrote:

I do think some of the reason this happened was that French rugby made such a big play in terms of developing their own league and making that a bigger cash cow.  

How come you don't blame the URC for trying to do the same?

Because the Top14 came first and their market has created the league pressures in all other domestic leagues and european leagues.  

As I've said before French rugby at this point in time is in serious danger of turning all other leagues in world rugby into development leagues.   The URC are in essence trying to grow to avoid this becoming the case as long term this kind of trend won't just affect club rugby but international rugby.

It is totally conceivable at this point that the Top14 will go a similar direction as Football in England has taken where it is above the international game and essentially yield all the power and money.  If international revenue decreases over time it will put rugby in those countries at risk.  You can see this play out with Wales already.  If they dont start winning soon they will in turn start having a harder time to fill the MS without either lowering ticket prices or accepting they will have full house sell outs.  That means they earn less money, which in turn impacts the money they can then pass on to club rugby.

Personally I think there will be too many clubs/provinces/unions wanting different things for it to work.

Two tier league system. How do you decide on the first seasons groupings? Purley on merit? Could end up with one nations teams all in the second league, and they won't agree to that.
Fair split between nations? That wouldn't get agreed to either.

Split between Anglo Welsh and the rest. Logically the most sensible, but already there is disagreement between the prem clubs, and if it was decided not all 4 Welsh clubs that would cause outrage in Wales.

I just see too many hurdles to jump which would end up with a terrible compromise where no one wins especially the fans.

I dont even see all 10 English teams being viable.  If you are actually basing this on high performance and a limited reliance on overseas players English rugby can probably only really support 5 teams without the quality dropping off a cliff.  6 at a push.  And lets face it English rugby will never cut their club numbers down.

I also dont think it's in the best interest of the URC to take more than 4-5 English clubs into the league either.  I also dont think they need to expand but even if they wanted to add some teams they have some very interesting options there as i outlined before.  English rugby doesnt have that option if France do end up boycotting European rugby.  The Premiership Cup isnt drawing good numbers so playing lower leagues wont help and with everyone else tied into their own domestics they cant add teams without reducing the funding to the teams who are already struggling.

I cant see any of this coming off and English Clubs probably have to choice but to go to 14 league team eventually.  So basically they can promote 4 clubs from the Championship or try to coax the Welsh over the bridge.  

I just hope the welsh sides dont do it.  Because leaving the URC I think would be a monumental mistake in the long run.  But its Welsh rugby and we have a tendancy to step on to the crazy train from time to time.

There is talk as well that the WRU are looking to now buy 20% stake in the regions in order to have more access and say on things. By all accounts they want to be able to move Welsh Players to other regions if that side is stacked with talent in one position for example. 2 of the 4 regions agree but other 2 dont at the moment. They are looking to get this sorted in November by all accounts.

Welshmushroom wrote:There is talk as well that the WRU are looking to now buy 20% stake in the regions in order to have more access and say on things.  By all accounts they want to be able to move Welsh Players to other regions if that side is stacked with talent in one position for example.  2 of the 4 regions agree but other 2 dont at the moment.  They are looking to get this sorted in November by all accounts.

The wru are trying to buy a 20% stake in the regions by taking on some of the Covid loan that the wru themselves took out on behalf of the regions and saddled them with. A loan necessary at the time as the wru had withheld payments to them due to Covid (the monies the regions earn from competition and tv income, player release, etc. I.e. wru reneged on their contact with the regions that year). So it’s a bit of a slap in the face to try to buy back a loan that should be theirs in the first place, in exchange for a controlling interest in the regions! Shysters!

TAFKA The Oracle wrote:

Welshmushroom wrote:There is talk as well that the WRU are looking to now buy 20% stake in the regions in order to have more access and say on things.  By all accounts they want to be able to move Welsh Players to other regions if that side is stacked with talent in one position for example.  2 of the 4 regions agree but other 2 dont at the moment.  They are looking to get this sorted in November by all accounts.

The wru are trying to buy a 20% stake in the regions by taking on some of the Covid loan that the wru themselves took out on behalf of the regions and saddled them with. A loan necessary at the time as the wru had withheld payments to them due to Covid (the monies the regions earn from competition and tv income, player release, etc. I.e. wru reneged on their contact with the regions that year). So it’s a bit of a slap in the face to try to buy back a loan that should be theirs in the first place, in exchange for a controlling interest in the regions! Shysters!

See if I had said that I'm sure the reaction would be different, but it's more or less spot on.

Many fans that I know will walk away on day 1 if the WRU has any control over their pro club.

RugbyFan100 wrote:

TAFKA The Oracle wrote:

Welshmushroom wrote:There is talk as well that the WRU are looking to now buy 20% stake in the regions in order to have more access and say on things.  By all accounts they want to be able to move Welsh Players to other regions if that side is stacked with talent in one position for example.  2 of the 4 regions agree but other 2 dont at the moment.  They are looking to get this sorted in November by all accounts.

The wru are trying to buy a 20% stake in the regions by taking on some of the Covid loan that the wru themselves took out on behalf of the regions and saddled them with. A loan necessary at the time as the wru had withheld payments to them due to Covid (the monies the regions earn from competition and tv income, player release, etc. I.e. wru reneged on their contact with the regions that year). So it’s a bit of a slap in the face to try to buy back a loan that should be theirs in the first place, in exchange for a controlling interest in the regions! Shysters!

See if I had said that I'm sure the reaction would be different, but it's more or less spot on.

Many fans that I know will walk away on day 1 if the WRU has any control over their pro club.

Well firstly, there has been no reaction to my post at all yet as I only just posted it. Secondly, it's perhaps because of the way you go about posting and engaging with people on her. You're just generally unpleasant and aggressive, which is why you get the reactions that you get.

So I do see where you are coming from but there is one thing probably not being considered here. Firstly how much the owners of the regions are actually putting in to run these teams. Peter Thomas probably was the biggest investor in Welsh rugby and the entire investment from shares in Cardiff Rugby is 14.3 million. But that is the total investment that has happened since 2003. Now if you break that down by year that means the owners are putting in 680K per year on average in Cardiff's case.

But here is where it gets complicated. Take Cardiff for example. Directors remunerations for 2023 was 178,500. So essentially they are taking money out of the club that offsets this but doesnt actually reduce their investment. I also suspect since Peter Thomas has left I doubt anyone of the owners are putting in significant sums. And based on the Cardiff accounts shares did not come up in the last 3 years so there hasnt been any investment by owners during this period. They do have loans but those are repayable and dont represent investment.

My point being, if your WRU and your investing massive sums every year without a say and you have owners not doing the same and actually taking money out in the forms of remunerations, you might think you would be due shares. Any other form of business this would be the case.

I understand both sides here and I'm not saying either is wrong. But I do think both sides have valid arguments.

I did have a brief look at the 2023 accounts for the other 3 regions regarding the remunerations. I found the reading interesting.

So Cardiff we already know had 178,500

Here are the other 3 for the same year:-

Scarlets - 354,000
Ospreys - 55,000
Dragons - 586,000 (400K was because one left and was severance pay)

Now granted the Directors are not always the owners but it does seem staggering to me that we have a scenario that some teams have such massively wide spending differences in this category alone.

On a side note due to the recent changes in Company House full accounts are available to read for free via their portal. So all the info on the regional game is freely available to anyone at this point.

Welshmushroom wrote:On a side note due to the recent changes in Company House full accounts are available to read for free via their portal.  So all the info on the regional game is freely available to anyone at this point.

Full accounts have always been available!

Welshmushroom wrote:

Scarlets - 354,000
 

There were 14 directors at the scarlets in 2023. Some are regular benefactors. Some are current employees (Jon Daniels, Simon Mudderack), some are heritage directors (Gareth Jenkins, Rupert Moon, Derek Quinnell) and some are ambassadors like Sean Fitzpatrick.

Whether £354,000 is value depends on what they give back to the club, although I will say that I know at least three of them have put a fair amount of their personal fortune into the club in the last decade.

Welshmushroom wrote:I did have a brief look at the 2023 accounts for the other 3 regions regarding the remunerations.  I found the reading interesting.  

So Cardiff we already know had 178,500

Here are the other 3 for the same year:-

Scarlets - 354,000
Ospreys - 55,000
Dragons - 586,000 (400K was because one left and was severance pay)

Now granted the Directors are not always the owners but it does seem staggering to me that we have a scenario that some teams have such massively wide spending differences in this category alone.  

The owners taking out money to pay back the loans they’ve given the club is absolutely fine. It’s not like they’re just taking profits, as there probably are none. While Peter Thomas took out some money to repay some loans, he was still owed millions apparently. Private individuals can’t just bankroll completely or they would be bankrupt themselves eventually. ‘Investment’ usually means some sort of payback or payout in the future.

The WRU don’t invest in the regions though. Those payments they make are contractual payments as part of the ‘participation agreement’. The payments include monies the clubs would probably get anyway if they weren’t channeled through the union in the first place (tv and competition money), plus the agreed monies for player release, extra player release outside the international window, etc. That’s not investment. That’s payment for goods and services.

TAFKA The Oracle wrote:

Welshmushroom wrote:On a side note due to the recent changes in Company House full accounts are available to read for free via their portal.  So all the info on the regional game is freely available to anyone at this point.

Full accounts have always been available!

Yes but it used to come with a charge previously when buying them on companies house granted that was a while back. I'm just saying for people who are not aware of this.

Welshmushroom wrote:

TAFKA The Oracle wrote:

Welshmushroom wrote:On a side note due to the recent changes in Company House full accounts are available to read for free via their portal.  So all the info on the regional game is freely available to anyone at this point.

Full accounts have always been available!

Yes but it used to come with a charge previously when buying them on companies house granted that was a while back.  I'm just saying for people who are not aware of this.

Not sure how far back, but I've been looking at accounts on there for years free of charge! I known the regions and WRU, IRFU, etc. accounts have been shared quite widely on places like Twitter where they have generated much debate.

WRU to buy a stake in each region, bending over and giving chump Gatland more control, in exchange for wiping out just £1M of the COVID loan that they dumped on the four pro teams. Glad I wasn't the only one to think that's bizarre.

TAFKA The Oracle wrote:

Welshmushroom wrote:I did have a brief look at the 2023 accounts for the other 3 regions regarding the remunerations.  I found the reading interesting.  

So Cardiff we already know had 178,500

Here are the other 3 for the same year:-

Scarlets - 354,000
Ospreys - 55,000
Dragons - 586,000 (400K was because one left and was severance pay)

Now granted the Directors are not always the owners but it does seem staggering to me that we have a scenario that some teams have such massively wide spending differences in this category alone.  

The owners taking out money to pay back the loans they’ve given the club is absolutely fine. It’s not like they’re just taking profits, as there probably are none. While Peter Thomas took out some money to repay some loans, he was still owed millions apparently. Private individuals can’t just bankroll completely or they would be bankrupt themselves eventually. ‘Investment’ usually means some sort of payback or payout in the future.

The WRU don’t invest in the regions though. Those payments they make are contractual payments as part of the ‘participation agreement’. The payments include monies the clubs would probably get anyway if they weren’t channeled through the union in the first place (tv and competition money), plus the agreed monies for player release, extra player release outside the international window, etc. That’s not investment. That’s payment for goods and services.

I'm not getting into this again. Yes I understand the regional viewpoint is its for goods and services. The ownership of the league, tv deals and everything else lies with the WRU hence why they get paid it and why they have to deal with the liability that arises with these contracts. The Regions dont have a contractual right aside from their agreement with the WRU. WRU can and is fully able to introduce other teams into league and distribute the money entirely differently if it so chooses as long as it meets it contractual obligations with its partners. The TV money and other income is only subject to them actually being a part of those activities. Part of why they want a participation agreement to run longer is because they know there are no contracts in place that give them access to these funds legally.

Now granted the WRU are tied in for 6 years but outside of these agreements, regional doesnt actually have a legal claim to any of this money nor any right to participate in any rugby competition that the WRU does not authorize because they are not partners with any of these deals. Also the way the URC TV deals are handled none of the participating teams can even negotiate their own TV deals. Its done via block.

Also without this redistributed money from the WRU none of the regions would even be professional outfits. So yes they are investing even if it's not from a fully business based model.

Welshmushroom wrote:

TAFKA The Oracle wrote:

Welshmushroom wrote:I did have a brief look at the 2023 accounts for the other 3 regions regarding the remunerations.  I found the reading interesting.  

So Cardiff we already know had 178,500

Here are the other 3 for the same year:-

Scarlets - 354,000
Ospreys - 55,000
Dragons - 586,000 (400K was because one left and was severance pay)

Now granted the Directors are not always the owners but it does seem staggering to me that we have a scenario that some teams have such massively wide spending differences in this category alone.  

The owners taking out money to pay back the loans they’ve given the club is absolutely fine. It’s not like they’re just taking profits, as there probably are none. While Peter Thomas took out some money to repay some loans, he was still owed millions apparently. Private individuals can’t just bankroll completely or they would be bankrupt themselves eventually. ‘Investment’ usually means some sort of payback or payout in the future.

The WRU don’t invest in the regions though. Those payments they make are contractual payments as part of the ‘participation agreement’. The payments include monies the clubs would probably get anyway if they weren’t channeled through the union in the first place (tv and competition money), plus the agreed monies for player release, extra player release outside the international window, etc. That’s not investment. That’s payment for goods and services.

I'm not getting into this again.  Yes I understand the regional viewpoint is its for goods and services.  The ownership of the league, tv deals and everything else lies with the WRU hence why they get paid it and why they have to deal with the liability that arises with these contracts.  The Regions dont have a contractual right aside from their agreement with the WRU.  WRU can and is fully able to introduce other teams into league and distribute the money entirely differently if it so chooses as long as it meets it contractual obligations with its partners.  The TV money and other income is only subject to them actually being a part of those activities.  Part of why they want a participation agreement to run longer is because they know there are no contracts in place that give them access to these funds legally.  

Now granted the WRU are tied in for 6 years but outside of these agreements, regional doesnt actually have a legal claim to any of this money nor any right to participate in any rugby competition that the WRU does not authorize because they are not partners with any of these deals.  Also the way the URC TV deals are handled none of the participating teams can even negotiate their own TV deals.  Its done via block.  

Also without this redistributed money from the WRU none of the regions would even be professional outfits.  So yes they are investing even if it's not from a fully business based model.  

OK happy to agree to disagree to keep the peace, but I'm sorry it's simply not 'investment' for me.

If a nation like England can't sustain it's own domestic league than club rugby has failed and it's simply untenable. What hope is there of expanding the game if leagues have to merge in major nations just to try and make ends meat.

With clubs going bust every year and with competitions being reduced to shells (super rugby, European cup) of their former glory, I don't think people are quite grasping how dire straits the game of rugby is in.

TAFKA The Oracle wrote:
OK happy to agree to disagree to keep the peace, but I'm sorry it's simply not 'investment' for me.

Sorry if my previous comment came off a bit edgy. Was not my intent. I also don't want to come across as being Pro WRU either.

My take on all of this is that it is a partnership between the two. One won't exist without the other (or at least not in Wales). If Regional rugby does not prosper neither will the WRU. And without a successful national side the pro game in wales dies.

Something that may be unfolding right now if they are not careful. I'm not sure how long team Wales can keep losing and "developing" players. The problem to fix this though I've not really heard credible plans from the regions or the WRU. I actually think the new board of the WRU have made some really poor decisions in this last year. It's probably the first time that I actually have been concerned about the future of pro rugby in wales.

LeinsterFan4life wrote:If a nation like England can't sustain it's own domestic league than club rugby has failed and it's simply untenable. What hope is there of expanding the game if leagues have to merge in major nations just to try and make ends meat.

With clubs going bust every year and with competitions being reduced to shells (super rugby, European cup) of their former glory, I don't think people are quite grasping how dire straits the game of rugby is in.

The reason professional rugby is in financial stress is very simple in my view. It is for the same reason any private business gets in trouble.

When the reveue is less than the expenditure trouble follows.

What each club/franchise or union needs to address is how they spend money. If you can only afford to pay a player $5 dollars, don't give him $10

Old Man wrote:

LeinsterFan4life wrote:If a nation like England can't sustain it's own domestic league than club rugby has failed and it's simply untenable. What hope is there of expanding the game if leagues have to merge in major nations just to try and make ends meat.

With clubs going bust every year and with competitions being reduced to shells (super rugby, European cup) of their former glory, I don't think people are quite grasping how dire straits the game of rugby is in.

The reason professional rugby is in financial stress is very simple in my view. It is for the same reason any private business gets in trouble.

When the reveue is less than the expenditure trouble follows.

What each club/franchise or union needs to address is how they spend money. If you can only afford to pay a player $5 dollars, don't give him $10

If only it was that simple. Clubs juggle two demands here;
Short term annual expenditure generally doesn't exceed annual revenue that's why there are salary caps. The balance sheet costs are however the other issue and the funding of long term debt for capital costs - not revenue costs.
Clubs inevitably kick that ball further down the road in the hope that TV revenue, ticketing and general marketing including sponsorship eventually have an uptick, which has happened in France but not in the UK, Australia or NZ. That slow degradation of balance sheets over time then becomes an issue as it starts to eat into committed annual revenue.

The idea that international leagues are the answer is not a long term solution despite what CVC might want but then they are not in it for the long term.
Comparing a bottom up league with an elitist Union controlled league is a waste of time - the agendas are different.
There will always be a league in England despite the hopes of some on here. Looks like Wasps, London Irish and Worcester are all on the comeback trail, presumably with a very different loading on their respective balance sheets.

But the funny thing is it is that simple:-

Sales
- Cost of Good Sold
= Gross Profit (Maximum amount you can spend on expenses)
- Expenses
= Net profit/loss

Basically just because there is a salary cap shouldnt determine if you spend to that limit. A lot of Premiership clubs simply spend their means trying to keep up with the salary cap when in reality they probably cant afford it which is what I think Old Man is getting at

Welshmushroom wrote:But the funny thing is it is that simple:-

Sales
- Cost of Good Sold
= Gross Profit (Maximum amount you can spend on expenses)
- Expenses
= Net profit/loss

Basically just because there is a salary cap shouldnt determine if you spend to that limit.  A lot of Premiership clubs simply spend their means trying to keep up with the salary cap when in reality they probably cant afford it which is what I think Old Man is getting at

Exactly. When expenditure exceeds income, regardless of what you spending it on the decline is inevitable. I also don't buy the idea that expenditure now in hopes of bigger deals.

If you go to a bank for financeing, they don't exclusively look or consider potential revenue. They look at affordability now.

The problem .i see is leagues are trying to compete with the French league to attract international players, it has proven to fail over and over. That creates an inflated market that at some point will bottom out and clubs go bankrupt.

Recwatcher16 wrote:

Old Man wrote:

LeinsterFan4life wrote:If a nation like England can't sustain it's own domestic league than club rugby has failed and it's simply untenable. What hope is there of expanding the game if leagues have to merge in major nations just to try and make ends meat.

With clubs going bust every year and with competitions being reduced to shells (super rugby, European cup) of their former glory, I don't think people are quite grasping how dire straits the game of rugby is in.

The reason professional rugby is in financial stress is very simple in my view. It is for the same reason any private business gets in trouble.

When the reveue is less than the expenditure trouble follows.

What each club/franchise or union needs to address is how they spend money. If you can only afford to pay a player $5 dollars, don't give him $10

If only it was that simple. Clubs juggle two demands here;
Short term annual expenditure generally doesn't exceed annual revenue that's why there are  salary caps. The balance sheet costs are however the other issue and the funding of long term debt for capital costs - not revenue costs.
Clubs inevitably kick that ball further down the road in the hope that TV revenue, ticketing and general marketing including sponsorship eventually have an uptick, which has happened in France but not in the UK, Australia or NZ. That slow degradation of balance sheets over time then becomes an issue as it starts to eat into committed annual revenue.

The idea that international leagues are the answer is not a long term solution despite what CVC might want but then they are not in it for the long term.
Comparing a bottom up league with an elitist Union controlled league is a waste of time - the agendas are different.
There will always be a league in England despite the hopes of some on here. Looks like Wasps, London Irish and Worcester are all on the comeback trail, presumably with a very different loading on their respective balance sheets.

It seems to me that it's premiership fans themselves that are the ones hoping it fails. When sides go bust all fans do on here is pluck and pick which players best suit their teams, which I find absolutely mind boggling. If a province goes bust the last thing I'm thinking of is how it benefits my team. I think rugby fans are incredibly narrow minded and never see the wider ramifications these things have. I mean the professional club game is on the brink of total collapse and you're worried about who your club is going to sign? Seriously? I'd rather Leinster never win a trophy ever again than see Connacht or any province go bust.

I also posted on a Reddit premiership thread, on how rugby NEEDS Wuss, LI and Wasps back, yes they need to be punished somehow but you have to find a way for them to get back... I got downvoted to oblivion.

Fans looking at players who become available is not the same as wanting clubs and leagues to fail, is it ?

Recwatcher16 wrote:Fans looking at players who become available is not the same as wanting clubs and leagues to fail, is it ?

That's your reply... Again says it all.

Welshmushroom wrote:But the funny thing is it is that simple:-

Sales
- Cost of Good Sold
= Gross Profit (Maximum amount you can spend on expenses)
- Expenses
= Net profit/loss

Basically just because there is a salary cap shouldnt determine if you spend to that limit.  A lot of Premiership clubs simply spend their means trying to keep up with the salary cap when in reality they probably cant afford it which is what I think Old Man is getting at

Teams also had to try avoid relegation (which is gone now) and try get European spots, which complicate things. It's not a problem exclusive to rugby of course.

LeinsterFan4life wrote:

Recwatcher16 wrote:Fans looking at players who become available is not the same as wanting clubs and leagues to fail, is it ?

That's your reply... Again says it all.

I don't understand your response or maybe you didn't understand mine ?

[quote="LeinsterFan4life"][quote="Welshmushroom"]But the funny thing is it is that simple:-

Sales
- Cost of Good Sold
= Gross Profit (Maximum amount you can spend on expenses)
- Expenses
= Net profit/loss

Basically just because there is a salary cap shouldnt determine if you spend to that limit.  A lot of Premiership clubs simply spend their means trying to keep up with the salary cap when in reality they probably cant afford it which is what I think Old Man is getting at

Profit & loss is not the same as balance sheet was my point, which is what is causing the financial issues across rugby, except France.

Recwatcher16 wrote:

Profit & loss is not the same as balance sheet was my point, which is what is causing the financial issues across rugby, except France.

And Ireland and Scotland and Italy ( I think)

So actually only an issue with England and maybe Wales?  

The two Scottish teams are ( and I guess always will be) what is in football known as "selling teams"  Players that develop in Scotland if they get good enough to deserve top wages will have to go elsewhere to get them.  There is not the money in Scotland to pay those top wages.  Everyone knows this and it also has the happy side effect of creating space for our youngsters to get more top flight game time.

Its just a fact of life.  Look to the guys we lose to English and French clubs.  Russell, Gray brothers, Nakarawa, Hogg etc etc

I do wish the numbers were more transparent but I have no doubt at all that the two scots clubs have less money than the top Irish, English and French clubs - often by a lot.  We have to spend our money wisely and develop deep squads not top heavy ones.  People point to 26 internationals at Glasgow but I ask you honestly - how many of them are guys who can command those really top wages?  How mnany of them are likewly to move on once they become big stars?  How many established internationals have we signed up ?

TJ wrote:

Recwatcher16 wrote:

Profit & loss is not the same as balance sheet was my point, which is what is causing the financial issues across rugby, except France.

And Ireland and Scotland and Italy ( I think)

So actually only an issue with England and maybe Wales?  

The two Scottish teams are ( and I guess always will be) what is in football known as "selling teams"  Players that develop in Scotland if they get good enough to deserve top wages will have to go elsewhere to get them.  There is not the money in Scotland to pay those top wages.  Everyone knows this and it also has the happy side effect of creating space for our youngsters to get more top flight game time.

Its just a fact of life.  Look to the guys we lose to English and French clubs.  Russell, Gray brothers, Nakarawa, Hogg etc etc

I do wish the numbers were more transparent but I have no doubt at all that the two scots clubs have less money than the top Irish, English and French clubs - often by a lot.  We have to spend our money wisely and develop deep squads not top heavy ones.  People point to 26 internationals at Glasgow but I ask you honestly - how many of them are guys who can command those really top wages?  How mnany of them are likewly to move on once they become big stars?  How many established internationals have we signed up ?

As you say it will never become clear what the numbers are for Glasgow and Edinburgh. If they were independent clubs running on an average 9k spectators paying £20-30 a ticket, the sums probably wouldn't add up but that is not the point, within reason, for Union controlled teams with a far bigger asset of a national stadium funding the
financial structure, with TV money etc.

Last time I found solid numbers was around 3 years ago. Our playing budgets were a couple of million less than the top english clubs and leinster and similar to the top Welsh clubs. The numbers are all published but the issue is the format it which they are published makes comparisons hard.

Who do you think we have in Scotland that is on real top money? The sort of money Russell is on? M Smith? Look at the numbers of top players that move on at the top of their game but who developed in Scotland? Big Bill Mata? At that time the top paid player in Scotland was on £300 000. Rusell went to France on a million, AWJ was being paid £600 000

What Glasgow do really well is cut their cloth according to their means - we do not overpay for stars so can develop a deep squad. somkehow Edinbugh are less than the sum of the parts however :-)

There are no ‘top Welsh clubs’ in terms of playing budget, TJ. All 4 have a salary cap of £4.5m. I believe England have (or did) post Covid too. Something like £5m?? But I think it was due to go up. So no ‘top English sides’ on spend either if they’re all on the same. Unless I’m mistaken?

TAFKA The Oracle wrote:There are no ‘top Welsh clubs’ in terms of playing budget, TJ. All 4 have a salary cap of £4.5m. I believe England have (or did) post Covid too. Something like £5m?? But I think it was due to go up. So no ‘top English sides’ on spend either if they’re all on the same. Unless I’m mistaken?

The salary cap has gone from £5.4m to £6.4m this season (though in practice for many clubs it was a cut, as player salaries agreed before the COVID reduction did not count in full towards the reduced cap). Most of the clubs spend up to it, but Newcastle are known to spend under it.

Plus the various other ways of paying players.  Central / hybrid contracts, Various schemes in england with marquee players etc etc.  AWJ ( I know it was a few years ago) was paid £300 000 from his club and £300 000 from the union.  the Scots players are all paid from the same budget.

this is why comparisons are hard because different unions fund things differently

I ask again - which players at Glasgow or Edinburgh are paid as much as the top pros in England?  Russell is on at least £700 000 and that does not count to the salary cap.  I bet all the tens playing in Scotland together do not get that much ( but I do not know)

All most all our real stars play outside Scotland and we lose players to England and France every year

Edit - its because we do not overpay for top stars that we can afford deep squads. for the price of one Finn Russell we get a Ross Thompson, a Ben Healy, a Tom Jordan and a wee duncy!

https://scottishrugby.org/wp-content/uploads/2023/11/SRAR_2223_draft9.pdf if anyone wants to go thru it

total spend on professional rugby was 25 million. That includes all coaching salaries for example plus the cost of transport and grounds and security and so on. so maybe half of that for players saleries?

TJ wrote:https://scottishrugby.org/wp-content/uploads/2023/11/SRAR_2223_draft9.pdf  if anyone wants to go thru it

total spend on professional rugby was 25 million.  That includes all coaching salaries for example plus the cost of transport and grounds and security and so on.  so maybe half of that for players saleries?

It's not a criticism TJ. Nothing wrong with spending lots if you can. Wish we could! But certainly Wales at £4.5m is nowhere near, and we do not have vehicles that can circumvent this either. There are no more central contracts, 80/20 contracts, dual contracts or WRU player top ups. We've agreed a £4.5m across the 4 to make it fairer (within Wales) and to try to stop wage inflation of Welsh players being touted to the bigger spenders for overinflated amounts.

Have all those tops up gone in Wales?  that effectively means a huge cut for the Scarlets and Ospreys does it not?  2 years ago they were outspending the Scots teams!  Or like england are contracts agreed earlier disregarded?

What does the welsh union do with the money? We have the same revenue streams

Well according to the 2023 accounts the WRU had income of 101 million, scottish rugby just 68 million.

WRU spent 27.9 on three of the regions and a further 9.7 million on the Dragons - So by my count that was a total regional spend of 37.6 million. SRU by contrast spent 25.6 million on both their pro teams. So they do spend less but more on a team by team basis as they have less teams to cover.

WRU does still have big amounts in administration and international part of the game along with rather big payments to community rugby.

What was interesting is the WRU has less capital & reserves at 44mill and SRU has 66 million.

Interesting - so the SRU spend a bit bigger % of its funds on the teams. That also suggests I was in the right ballpark with half the spend going to the players and half on the rest of the costs. So each team costs the WRU just under 10 million, the Scottish teams 12 and a bit million. Who gets the gate receipts? teams or union? I thought the scots the union got the gate receipts but far from sure

I'm surprised the WRU income is that much more. They get more from the euro cups, they have a TV deal that the scots do not have but thats a lot more

Maybe wales does need to reduce its number of pro teams - that does not make great reading