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Premiership clubs lost a staggering £88.7million in the two years before CVC buy-in

35-year-old Mike Brown (Photo by Harry Trump/Getty Images)

Lord Myners’ extensive 55-page salary cap review has laid bare the deep financial black hole that exists in the game in England, the report highlighting how the 13 Gallagher Premiership shareholder clubs lost a combined total of nearly £89million in the two years prior to selling a 27 per cent stake to CVC Capital Partners.

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The Premiership was reputed to have gained more than £200m when it decided in December 2018 to sell a minority stake to the private equity firm, but it has now emerged that this deal was struck at the end of a terrible two-year period which starkly highlights the bleak loss-making going on in the business of top-flight rugby.

Accessing Companies House records, the Myners report outlined how a total of £88,726,373 was lost in 2017 and 2018. A total of £39,243,963 was lost by clubs in the year ending 2017, a figure that worsened to £49,482,410. 

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RugbyPass reviews the epic 2009 South Africa vs the British and Irish Lions second Test in the company of Bryan Habana

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RugbyPass reviews the epic 2009 South Africa vs the British and Irish Lions second Test in the company of Bryan Habana

Only Exeter managed to post a profit, the Chiefs recording surpluses of £1,143,676 and £909,432 in the two years investigated by the report. That suggests that all other Premiership owners should make a point of visiting Tony Rowe and teasing out exactly how to make a profit in a sport that can’t shake its reputation for losing money.  

Some of the individual losses were staggering – Wasps in excess of £14m, Worcester more than £13m and Bristol over £12m. The lowest loss-making club was Leicester, with a £2.1m two-year total. However, that more refined level of bookkeeping wasn’t sufficient when it came to putting the club up for sale last summer in a market that refused to nibble, resulting in the Tigers being taken off the market nine months later.

The salary cap report crucially noted, though, that many of the Premiership club owners claimed not to be overly bothered by their loss-making businesses as owning a rugby club was something they were generally doing in search of glory rather than to make ends meet.

Reflecting on the £88.7m two-year losses, Lord Myners wrote: “These figures illustrate just how dependent many clubs are on their owners or benefactors, normally an individual, for viability and sustainability. 

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“The continuing operations of PRL in its present model depend on the generosity and financial resource of owners. It was clear to me after listening to the owners that many are not motivated by the potential to generate profit from the game, but to compete and win on the field.

“The mentality of many of those individuals is indicative of the unique economics of sport. It also suggests that without regulations limiting their ability to spend more, owners/benefactors who could afford to would spend even more than they currently do in pursuit of victory. 

“The effect of the salary cap since its introduction has therefore been to control rising costs for clubs relative to increases in revenue. The cap could be said to act as a safety valve against unsustainable losses. 

“However, it is obvious that the uncertain outcome of the current season with all the attending economic implications may change the economics of PRL’s member clubs. Their long-term financial viability was not assured before this moment; it is far less so now.”

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THE TWO-YEAR PREMIERSHIP FINANCIAL REPORT (2017 and 2018)

Bath Rugby Limited

-£5,715,760 LOSS

(-£2,567,201, -£3,148,559)

Bristol Rugby Club Limited

-£12,478,283 LOSS

(£5,241,823, -£7,236,460)

Exeter Rugby Group PLC 

£2,053,108 PROFIT

(£1,143,676, £909,432)

Gloucester Rugby Limited

-£3,387,955 LOSS

(-£1,197,771, -£2,181,184)

Harlequin FC Holdings Ltd

-£11,579,193 LOSS

(-£6,624,239, -£4,954,954)

Leicester Football Club PLC

-£2,174,000 LOSS

(-£938,000, -£1,236,000)

London Irish Holdings Ltd 

-£6,561,817 LOSS

(-£3,069,678, -£3,492,139)

Newcastle Rugby Ltd

-£7,442,372

(-£3,164,117, -£4,278,255)

Northampton Saints PLC

-£4,018, 003 LOSS

(-£1,230,295, -£2,787,708)

Manchester Sale Rugby Club Ltd

-£2,528,010 LOSS

(-£818,829, -£1,709,181)

Saracens Limited

-£6,637,570 LOSS

(-£2,750,645, -£3,886,925)

Wasps Holdings Ltd

-£14,428,000 LOSS

(-£4,705,000, -£9,723,000)

WRFC Trading Ltd (Worcester)

-£13,837,512 LOSS

(-£8,080,035, -£5,757,477)

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O
Oh no, not him again? 2 hours ago
England internationals disagree on final play execution vs All Blacks

Okay, so we blew it big time on Saturday. So rather than repeating what most people have all ready said, what do I want to see from Borthwick going forward?


Let's keep Marcus Smith on the pitch if he's fit and playing well. I was really pleased with his goal kicking. It used to be his weakness. I feel sympathy for George Ford who hadn't kicked all match and then had a kick to win the game. You hear pundits and commentators commend kickers who have come off the bench and pulled that off. Its not easy. If Steve B continues to substitute players with no clear reason then he is going to get criticised.


On paper I thought England would beat NZ if they played to their potential and didn't show NZ too much respect. Okay, the off the ball tackles certainly stopped England scoring tries, but I would have liked to see more smashing over gainlines and less kicking for position. Yes, I also know it's the Springbok endorsed world cup double winning formula but the Kiwi defence isn't the Bok defence, is it. If you have the power to put Smith on the front foot then why muzzle him? I guess what I'm saying is back, yourself. Why give the momentum to a team like NZ? Why feed the beast? Don't give the ball to NZ. Well d'uh.


Our scrum is a long term weakness. If you are going to play Itoje then he needs an ogre next door and a decent front row. Where is our third world class lock? Where are are realible front row bench replacements? The England scrum has been flakey for a while now. It blows hot and cold. Our front five bench is not world class.


On the positive side I love our starting backrow right now. I'd like to see them stick together through to the next world cup.


Anyway, there is always another Saturday.

7 Go to comments
C
CO 2 hours ago
Scott Robertson responds to criticism over All Blacks' handling errors

Robertson is more a manager of coaches than a coach so it comes down to intent of outcomes at a high level. I like his intent, I like the fact his Allblacks are really driving the outcomes however as he's pointed out the high error rates are not test level and their control of the game is driving both wins and losses. England didn't have to play a lot of rugby, they made far fewer mistakes and were extremely unlucky not to win.


In fact the English team were very early in their season and should've been comfortably beaten by an Allblacks team that had played multiple tests together.


Razor has himself recognised that to be the best they'll have to sort out the crisis levels of mistakes that have really increased since the first two tests against England.


Early tackles were a classic example of hyper enthusiasm to not give an inch, that passion that Razor has achieved is going to be formidable once the unforced errors are eliminated.


That's his secret, he's already rebuilt the passion and that's the most important aspect, its inevitable that he'll now eradicate the unforced errors. When that happens a fellow tier one nation is going to get thrashed. I don't think it will be until 2025 though.


The Allblacks will lose both tests against Ireland and France if they play high error rates rugby like they did against England.


To get the unforced errors under control he's going to be needing to handover the number eight role to Sititi and reset expectations of what loose forwards do. Establish a clear distinction with a large, swarthy lineout jumper at six that is a feared runner and dominant tackler and a turnover specialist at seven that is abrasive in contact. He'll then need to build depth behind the three starters and ruthlessly select for that group to be peaking in 2027 in hit Australian conditions on firm, dry grounds.


It's going to help him that Savea is shifting to the worst super rugby franchise where he's going to struggle behind a beaten pack every week.


The under performing loose forward trio is the key driver of the high error rates and unacceptable turn overs due to awol link work. Sititi is looking like he's superman compared to his openside and eight.


At this late stage in the season they shouldn't be operating with just the one outstanding loose forward out of four selected for the English test. That's an abject failure but I think Robertson's sacrificing link quality on purpose to build passion amongst the junior Allblacks as they see the reverential treatment the old warhorses are receiving for their long term hard graft.


It's unfortunately losing test matches and making what should be comfortable wins into nail biters but it's early in the world cup cycle so perhaps it's a sacrifice worth making.


However if this was F1 then Sam Cane would be Riccardo and Ardie would be heading into Perez territory so the loose forwards desperately need revitalisation through a rebuild over the next season to complement the formidable tight five.

28 Go to comments
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