Premiership need plan to stop the big crash
The news, broken in last week’s Rugby Paper, that Worcester Warriors are up for sale, or in the PR of the club’s statement, ‘seeking further investment’, highlights once again the underlying instability of the Aviva Premiership.
More than a year ago I asked a Premiership spokesperson whether they were comfortable with the losses that some clubs were making, and the reply, with incredulity in their voice, went along the lines that I surely didn’t imagine those owners would walk away?
The attitude was that there really wasn’t a problem with ‘sugar daddies’ or foreign investors, although that seemed to change when Mohad Altrad’s desire to invest in the Premiership was knocked back!
The fact of the matter is that the foundations of Premiership rugby are built on sand, and no-one seems to care about that. At the recent launch of the new Premiership season the tone was as upbeat as you like, all about how successful things are, and how the new season would see things moving upwards and onwards – and every word of it was true. The problem, however, is that there was a huge elephant in the room that we were all ignoring.
Some people like to make a distinction between sport and business, but that’s just daft. You know the sort of thing – ‘we’re more than just customers of the club, we’re supporters, and it’s in our hearts at an emotional level’.
Nice words, but utterly meaningless. Premiership rugby clubs are businesses.
If companies make losses for too long then they fail, or their accounts get qualified with words along the lines that the company only remains a going concern because of the support of a share- holder or shareholders. In other words, if the shareholders ever walked away then the business would be in deep trouble.
For anyone to say they have complete confidence that shareholder support will be maintained indefinitely is an act of foolishness. Things change, banks that were too big to fail, suddenly failed. Premiership Rugby need a plan to cope with the unexpected.
The problem is that PRL are not a governing body in the accepted sense of the word – they are a bunch of talented administrators who keep their jobs at the will of the clubs’ owners. There’s a political phrase about speaking truth to power, and I don’t know how often that happens in English rugby, and if it does, whether the owners listen.
Each and every Premiership club should be compelled to have a plan that shows how they will reach break-even within, say, the next five years. Only if the clubs can trade profitably can we be sure that the Premiership will continue to exist, and that it is protected from the potential here today, gone tomorrow whims of a few rich owners.
To do that will mean accepting some pain, and that results at a domestic and European level might suffer in the short-term as the business is knocked into shape. Some fans will hate it: we are fanatics, and most of us don’t care about the long-term stability of ‘our’ club, as long as we’re winning games and trophies, but my goodness we should.
Part of this will involve saying goodbye to promotion and relegation, because getting genuine, sustainable investment will mean offering potential and existing investors a measure of certainty about the future.
The weekend saw a stark reminder of what can happen to a club if things go badly. London Welsh started their comeback in Herts and Middlesex 1, eight levels below the Premiership where they spent two seasons not so long ago.
Back in January Welsh had to ‘let go’ their professional players, and their support staff, and it all stemmed from not having a sustainable financial model for the business. It’s easy to write the Welsh situation off as a special case, but if anyone tells me this couldn’t happen to one or more Premiership clubs then I simply don’t believe it.
After such a hugely exciting start to the Premiership season it would be easy to sweep such concerns under the carpet, which is precisely what Premiership rugby have been doing for the past few years.