Is the Premiership up to the Challenge

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Obviously, as we see now, the clear answer to me is No.

I keep reading more and more about the multitude of failures which led to the problems at Worcester and Wasps. Clearly the weaknesses which led to the collapse at each club were somewhat different, though the detonators were the same, the lack of accountability and involvement by the league and in fact their partner clubs is beyond disappointing. It is unprofessional and frankly it is amateur hour.

For me the silence coming from Citicorp Venture Capital is deafening. 2020-2022 has shown the underlying weakness in the Premiership and to a lesser extent Rugby in general. The organisational and financial structures and rules in the Premiership, and perhaps this is hindsight, but what we see is what we see, and it's poor. There appears to be little governance and little desire for any. These are all areas where CVC with their background should - perhaps must - throw their weight around.

As I talked to some general managers of a few American sports teams at a cross-functional medical meeting a few months ago, they were all surprised at the organisational weaknesses. The lack of transparency, in particular, was cited as a virtual guarantee for failure. Two of them speculated that further lack of investment in Rugby in general (mostly from only CVC) shows a lack of confidence in the basic business(es) of Rugby by the broader sports business community.

From all that, I think we need to do the impossible or unthinkable - forget the legacy club structure - with a few exceptions the management of most clubs are simply not up to the challenge of being modern pro sports teams. And the leadership of the Premiership as a league, and maybe other leagues but this is about the Premiership, are clearly not up to the challenge either. NBC has expressed disappointment with their investment and working relationship with the Premiership as well.

Something radical needs to happen because we all know the definition of lunacy: Doing the same thing and expecting different results. And picking and working around the fringes ain't getting it done.

So what do you all think we should do?

Welshmushroom wrote:

TJ wrote:Edinburgh and Glasgow spend much less than the premiership cap - well known and well proven

Last time I checked the premiership cap is set at 5 million on players plus 2 marque players - so even if you have it 2 1 million quid earners the max salary spend in the Prem will be 7 million.  And lets be realistic there is probably hardly any team offering players that money aside from maybe Saracens and Bristol.  So the likely hood is playing budget salaries are probably around 6million.

The Scottish I have it on good authority are spending in excess of 7 million a piece.  In fact at the start of the season a lot of Premiership clubs have come out to say they can't match some of the playing budgets in the URC.

The only ones on less are the South African sides, 1 Welsh Side, 1 Italian side.  

The Salary Cap was meant to be £6.4 million plus marquee for 21/22 but was reduced due to the loss of income thanks to Covid, so that would have roughly equated to what the URC sides work under and it's staying at £5 million for next season.

It is however worth noting that any deals that were signed on the basis of the £6.4 million cap can be honoured if they were done before the reduction so there are certainly some clubs who are (legitmately) over the £5 million cap and nearer the £6.5 one.

Interesting discussion.

Its wonderful seeing people compare apples and oranges, and then getting into competitive accounting ...

Anyway just to be the hypocrite, as far as I can see the Premiership isn't doing too good, highly (but not totally) dependent on contributions from rich backers. The URC is doing too good, dependent highly (but not totally) on the international game. I don't know about the French, but the rest of the world isn't making huge amounts of money either.

The international and club games are inter-dependent and the Unions and league administrations need to sort things out. The concussion issues and player welfare mean more games can't just be added. Additional finance is going to key, and as Dr Grey has said that requires transparency, something none of the controlling bodies seem keen on. But who is going to put money in if they don't know how it is spent or even if it will get a return?

Can't we remind Elon Musk of his SA roots and persuade him to give up on Twitter, and downsize his fortune on Rugby Union worldwide. He could buy the lot with his small change.

The leagues are not comparable and neither are perfect in terms of diversification of financial risk and subsequent strategies to raise revenue .

The issue however is the strength of balance sheets in the PRL and whilst no-one could have predicted the pandemic, the wider due diligence and transparency is difficult with private ownership and some would argue that a one in a hundred year event does not mean radical overhaul is required.

The marketing and targeted exposure needs a reboot in order to compete with all the leisure and entertainment options available. Not sure the PRL don't just see a traditional sport which hasn't moved in to all the big population centre's and therefore just try to leverage TV deals, which whilst very important doesn't or hasnt to date move the dial much.

Recwatcher16 wrote:The leagues are not comparable and neither are perfect in terms of diversification of financial risk and subsequent strategies to raise revenue .

The issue however is the strength of balance sheets in the PRL and whilst no-one could have predicted the pandemic, the wider due diligence and transparency is difficult with private ownership and some would argue that a one in a hundred year event does not mean radical overhaul is required.

The marketing and targeted exposure needs a reboot in order to compete with all the leisure and entertainment options available. Not sure the PRL don't just see a traditional sport which hasn't moved in to all the big population centre's and therefore just try to leverage TV deals, which whilst very important doesn't or hasnt to date move the dial much.

Agree comparing finances and funding for the three major Rugby leagues, the Premiership, URC and LNR is fruitless.  Each league have its own business model, and in fact, the URC has teams from six countries and each have their own finance model.  Once anyone gets past total comp per player, the ability to compare unravels and becomes an exercise in futility.  The one thing we know is our players are woefully under compensated for what they put their bodies through.  

My original question was abut the Premiership.  Covid brought out the overall weakness in the financing of the Premiership teams.  And, now we see Worcester and especially Wasps would have eventually failed regardless of Covid.  And this is directly due to the Premiership lack of finance rules and the hostility to transparency and independent auditing.  

Using Saints as a counter example, their majority owner, Keith Barwell invested significant funds over 20 years ago, then shut off the spigot and lent his management skills to drive the team to sustainable and slender profitability by implementing traditional, fundamental business methods.  Prior to Covid the club took on controlled debt for additional players and then to build the new stand.  These investments were made with a clear ROI which was on target prior to Covid.  So, yes the team's primary owner is a wealthy businessman, and yes, the team has debt.  But he led his business acumen to make the club self-sustaining and the debt is like typical corporate debt and not a step prior to bankruptcy.  Of course most clubs are not managed and funded as competently.  But this does show the league can work with the right people, even despite its built in major flaws.  

What is missing in the Premiership is more owners like Mr. Barwell and having those structures written into club ownership contracts.  As we have said the lack of transparency is amateur hour at its most polite.  

But in the bigger picture, what has World Rugby, the IRB, or whatever they call themselves, to promote the sport globally?  If I say nada, I am probably overstating their contributions to our sport.  Perhaps another discussion is whether World Rugby is fit for purpose, and for me the answer there is also no.  Far too much parochialism, weak leadership, and once again the that 'vision thing':  Ain't got none.  

So we are left with a sport with the top level barely growing, if at all, and not a damn thing being done to attract people to the top level.  All I can see are talking points about increasing the player numbers at the grass roots and assuming that will translate to overall success for the pro teams.  I do believe that the rising tide raises all ships.  The Rugby caveat is what if the ships have holes.

Some interesting comments. It's still fairly early days for the premiership. We're talking what 30 years, three decades of professional rugby. The first 12-15 years was the novelty of classicly amateur players becoming professional. The next ten years played professional in the nostalgia of amateurism. These last 5 years has the players and people the first batch that only know it as professional rugby.

If you take the early decades of NFL, NBA, NHL, even soccer becoming professional they created teams, moved teams, sides folded over and over again, rival leagues emerged and merged.

It's sad what's happened to Worcester and Wasps. For the league to survive it has to allow clubs to go to the wall.

A lot of whats happened shows the difference between owners of clubs that prop them up and invest money into the club. And those that fund day-to-day operations out of a accumulating loan/debt pile which hangs around a clubs neck like a noose.

Wasps had a good idea. They were homeless and renting. The game is predicated on gate receipts to fund a vast portion of the outgoings. They needed a home and thought about getting a stadium that would be multi-use, get conferences, maybe hotel. Have the asset make money more that just on gameday. The problem is, most sides with bigger stadiums started small, were selling out regularly in the settled area and expanded. Put 5k people in a 30k seated stadium (anecdotal, no exact figures), the atmosphere sucks, they are new and don't get hooked. You struggle to build this way. Then over-estimate how many days you can keep the venue busy and you quickly start losing money during the week to keep it all open and struggle to collect a decent gate receipt on the weekend.

But the premiership, or should I say top-flight-english-rugby-union will survive and will do fine. But it shouldn't be held hostage to the dealings of the clubs and should let individual clubs go to the wall for bad business, ownership or strategic decisions. The top-flight shouldn't prevent teams from coming up but creating metrics that only the existing top flight clubs can meet.