How Can This be Sustainable?

https://rugbyballs.org/2017/09/22/workers-of-the-world-unite/

The writing is dreadful and overwrought, but the numbers are much worse.

The prose isn't to my particular tastes.

The point however stands, you're seeing massive revenue losses being subsidised in the hope of growing the league to return capital gains in the clubs' values. Wray and co. are hoping that Saracens is now worth a hell of a lot more than what he paid for it plus what he's paid in to keep it going over the last number of years.

In Saracens case I believe they hoped for a significant growth of the fan base and revenues ........ which hasn't happened.

Is this the same Graham Simmons who works for Sky Sports with their Lions, England and Pro 12 contracts? If so he is hardly an impartial observer.

Whilst I agree that there is too much rugby for top players this is as much about the increase in internationals as club games. Take a look at the number of England games played in the last few decades:
1960s 48
1970s 50
1980s 61
1990s 91
2000s 104

Personally I think both sides need to sacrifice games. PRL could lose the play-offs. International game could alternate having a NH to SH tour one year and a SH to NH tour the next.

Said it a few times recently but rugby simply can't work in isolation of league vs Europe vs internationals or club vs country.it needs to be 1 discussion. The thought in the article seems to be English clubs need to.know their place. Sorry but they need to work with unions wr and other stakeholders. Won't work otherwise.

Exiledinborders wrote:Is this the same Graham Simmons who works for Sky Sports with their Lions, England and Pro 12 contracts? If so he is hardly an impartial observer.

Whilst I agree that there is too much rugby for top players this is as much about the increase in internationals as club games. Take a look at the number of England games played in the last few decades:
1960s 48
1970s 50
1980s 61
1990s 91
2000s 104

Personally I think both sides need to sacrifice games. PRL could lose the play-offs. International game could alternate having a NH to SH tour one year and a SH to NH tour the next.

And how many players played in those games?

At least Sarries don't have to pay it back, Wasps are f****d

Scottrf wrote:At least Sarries don't have to pay it back, Wasps are f****d

Why? Wasps revenue is growing so their losses should turn to profit over the next few years, not to mention they aren't just a rugby club anymore so have added revenue streams

marty2086 wrote:

Scottrf wrote:At least Sarries don't have to pay it back, Wasps are f****d

Why? Wasps revenue is growing so their losses should turn to profit over the next few years, not to mention they aren't just a rugby club anymore so have added revenue streams

They have to repay bond holders to the value of ~£35m by 2022. They have interest payments on these bonds of 6.5%. And they are still making EBITDA losses while the rugby is going well.

Wow - interesting article. Wasps I am sure will be fine. Outside revenue for the Rioch Arena will top up any income from the Rugby....Concerts, community events and the footie all bring in more. Allows Wasps to practically give tickets away if they need to.
At least that was the opinion when the deal was announced a few years back - it was taking them from the brink of bankruptcy to one of the wealthiest clubs around.

I am concerned about Quins numbers though! Perhaps its naivity but I thought they used to have a sustainable model! Long lease on the ground, recent expansion to 15k. When Mark Evans was the CEO there was a lot of emphasis on building the business (although at the time they probably didn't spend enough on players). It seems they have now gone down the opposite route! While not funded by a sugar daddy - it sounds nearly as bad. And how do Quins or any of the other sides get out of the rut?

propdavid_london wrote:Wow - interesting article.  Wasps I am sure will be fine. Outside revenue for the Rioch Arena will top up any income from the Rugby....Concerts, community events and the footie all bring in more.  Allows Wasps to practically give tickets away if they need to.  
At least that was the opinion when the deal was announced a few years back - it was taking them from the brink of bankruptcy to one of the wealthiest clubs around.  

Except they've admitted since they'll probably need another bond issue. Which means more interest payments and harder to pay their debt back.

Scottrf wrote:

marty2086 wrote:

Scottrf wrote:At least Sarries don't have to pay it back, Wasps are f****d

Why? Wasps revenue is growing so their losses should turn to profit over the next few years, not to mention they aren't just a rugby club anymore so have added revenue streams

They have to repay bond holders to the value of ~£35m by 2022. They have interest payments on these bonds of 6.5%. And they are still making EBITDA losses while the rugby is going well.

Wasps halved their losses last season, they have also reportedly increased revenues for this year which should put them in the black.

They added a netball team to their group earlier this year, so they are growing the brand and revenues

Scottrf wrote:

propdavid_london wrote:Wow - interesting article.  Wasps I am sure will be fine. Outside revenue for the Rioch Arena will top up any income from the Rugby....Concerts, community events and the footie all bring in more.  Allows Wasps to practically give tickets away if they need to.  
At least that was the opinion when the deal was announced a few years back - it was taking them from the brink of bankruptcy to one of the wealthiest clubs around.  

Except they've admitted since they'll probably need another bond issue. Which means more interest payments and harder to pay their debt back.

Not sure when Wasps said that, pretty sure it was financial experts who said they'd need to refinance but they are trying to find a new stadium sponsor that will be far more lucrative than the Ricoh deal and would change the whole thing

Exiledinborders wrote:Is this the same Graham Simmons who works for Sky Sports with their Lions, England and Pro 12 contracts? If so he is hardly an impartial observer.

Whilst I agree that there is too much rugby for top players this is as much about the increase in internationals as club games. Take a look at the number of England games played in the last few decades:
1960s 48
1970s 50
1980s 61
1990s 91
2000s 104

Personally I think both sides need to sacrifice games. PRL could lose the play-offs. International game could alternate having a NH to SH tour one year and a SH to NH tour the next.

The substantive point is not about too much rugby. It's actually about all but two AP clubs running at a continued loss. Some teams are Haemorrhaging money. I realise the number of games is obviously central to the issue of turnover, most simply in terms of ticket sakes and players' salaries. But surely the crux of the matter is that these clubs can't keep running with finances like these? If their finances were healthy, they wouldn't be worried about squeezing as many games as humanly possible into the season?

marty2086 wrote:

Scottrf wrote:

marty2086 wrote:

Scottrf wrote:At least Sarries don't have to pay it back, Wasps are f****d

Why? Wasps revenue is growing so their losses should turn to profit over the next few years, not to mention they aren't just a rugby club anymore so have added revenue streams

They have to repay bond holders to the value of ~£35m by 2022. They have interest payments on these bonds of 6.5%. And they are still making EBITDA losses while the rugby is going well.

Wasps halved their losses last season, they have also reportedly increased revenues for this year which should put them in the black.

They added a netball team to their group earlier this year, so they are growing the brand and revenues

Halved their losses, great, but they need to be making £7m profit per year from now, with growing wage caps to meet their commitments. More in reality because we are talking EBITDA and they need to pay tax etc on profits.

Scottrf wrote:

marty2086 wrote:

Scottrf wrote:

marty2086 wrote:

Scottrf wrote:At least Sarries don't have to pay it back, Wasps are f****d

Why? Wasps revenue is growing so their losses should turn to profit over the next few years, not to mention they aren't just a rugby club anymore so have added revenue streams

They have to repay bond holders to the value of ~£35m by 2022. They have interest payments on these bonds of 6.5%. And they are still making EBITDA losses while the rugby is going well.

Wasps halved their losses last season, they have also reportedly increased revenues for this year which should put them in the black.

They added a netball team to their group earlier this year, so they are growing the brand and revenues

Halved their losses, great, but they need to be making £7m profit per year from now, with growing wage caps to meet their commitments. More in reality because we are talking EBITDA and they need to pay tax etc on profits.

Yet they've been making the repayments already and halving their loses while increasing revenue by 50% plus a new tv deal since then which will increase revenues further

They may have to refinance but it won't be as big a problem as you make out

'We've lost less than before with huge debt, things are going great!'

Of course revenues need to increase, as is their salary bill and every other cost.

Scottrf wrote:'We've lost less than before with huge debt, things are going great!'

Of course revenues need to increase, as is their salary bill and every other cost.

Sorry but not sure what your point is other than repeating what you said before?

Businesses carry debt, it's a fact of life but it doesn't equate to the disaster you try to allude to their overall value mean they are in a good position

The bond was in part to pay for the Ricoh so they have a huge asset there, something Saracens don't have. They have been making their repayments already with little problem and that's included in their losses in recent years so the idea they need to be making profits to meet the repayments isn't true

Not to mention they have cut some big earners recently like Beale and guys like Le Roux and Moore look to be on the way out too so the salaries might not be the problem you make it out to be

marty2086 wrote:

Scottrf wrote:'We've lost less than before with huge debt, things are going great!'

Of course revenues need to increase, as is their salary bill and every other cost.

Sorry but not sure what your point is other than repeating what you said before?

Businesses carry debt, it's a fact of life but it doesn't equate to the disaster you try to allude to their overall value mean they are in a good position

The bond was in part to pay for the Ricoh so they have a huge asset there, something Saracens don't have. They have been making their repayments already with little problem and that's included in their losses in recent years so the idea they need to be making profits to meet the repayments isn't true

Not to mention they have cut some big earners recently like Beale and guys like Le Roux and Moore look to be on the way out too so the salaries might not be the problem you make it out to be

They have been making interest repayments. Not debt repayments, that's the point. It's a bond with a specific date where the money is due.