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Report claims seven Premiership clubs are 'balance sheet insolvent'

By PA
The Gallagher Premiership trophy at Bath last Friday (Photo by David Rogers/Getty Images)

The lead author of an independent report into Gallagher Premiership clubs’ finances believes concerns will exist “for some time to come” over another team possibly collapsing. Wasps and Worcester went into administration in 2022, while London Irish folded the following year as they all disappeared from the Premiership landscape.

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A study compiled by corporate recovery and insolvency firm Leonard Curtis claims that seven Premiership clubs could be classed as balance sheet insolvent – meaning they are reliant on financial support from their owners – with Leicester, Gloucester and Northampton the exceptions.

The 67-page report also examines each club’s financial data across key markers of revenue, total wages, profit/loss, debt, equity and attendances. Harlequins led in terms of revenue earned in 2022/23 with £26.8million, followed by Saracens at £23.2m.

But the report raises concerns over wage-to-revenue ratios, with wages consuming more than three-quarters of revenue at two clubs during that season. All clubs made a loss in 2022/23, with Gloucester the closest to making a profit, losing just over £0.5m. But all of the others lost more than £1m, and the collective figure topped £30m.

The report says that concerns over debt levels and state of balance sheets are “likely to persist” over the next two years and “potentially beyond that”. And while some clubs might break even or turn a small profit in the next two years, it added: “The prospect of the current overall loss-making trend being reversed appears slim at present”.

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Lead author Jonathan Dyson told the PA news agency: “I wouldn’t say I was shocked. We have gone into a lot of depth, and clubs have been making losses over a very long period, so it didn’t come as a great surprise. With what happened with Wasps, Worcester and London Irish, nobody in the game wants to see another club disappear from the Premiership.

“Because of what happened, the concerns over whether another club might go the same way will still be there for some time to come. I am not saying that means another club will go, but clearly, because of what happened with those clubs, whether you are a fan, an owner, a broadcaster, sponsor, that will always be in the back of people’s minds.

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“We are not trying to have a go at the game at all, we are just presenting the state of the game financially at the moment. Only time will tell whether the clubs are able to drive the revenues and also reduce the wage bills and other costs in order to either break even or make a profit.

“There certainly seems to be a lot of collective will. There is cause for optimism. The product on the pitch is really good, the owners are still dedicated to the game, and it is certainly not only English rugby that is suffering these sort of financial challenges.”

Expert panellists involved in the report included former Saracens boss Mark Evans and ex-Scotland international Simon Danielli, who works in private equity. Premiership Rugby, which has declined to comment on the report, appointed Nigel Boardman to lead a review into club finances two years ago, while a financial monitoring panel was also established and is in operation this season.

Premiership sponsorship has increased by 50 per cent since 2022, the PA news agency understands, and last season’s Premiership final between Bath and Northampton attracted a peak television audience of 1.25m. Clubs have also signed a long-term professional game partnership with the Rugby Football Union that will be worth £3.3m per club annually across the next four years.

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2 Comments
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Wayneo 85 days ago

I would love to know how much of the RFU's revenues are shared with the clubs. SA Rugby goes about 50/50 between URC clubs and lower levels so I hope the EP has a similar arrangement with the RFU, if not then that should be looked at a bit closer to see what can be done.

J
JWH 85 days ago

Proof that the NH competitions are not as good as the SH.

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JW 5 hours ago
Does South Africa have a future in European competition?

I rated Lowe well enough to be an AB. Remember we were picking the likes of George Bridge above such players so theres no disputing a lot of bad decisions have been made by those last two coaches. Does a team like the ABs need a finicky winger who you have to adapt and change a lot of your style with to get benefit from? No, not really. But he still would have been a basic improvement on players like even Savea at the tail of his career, Bridge, and could even have converted into the answer of replacing Beauden at the back. Instead we persisted with NMS, Naholo, Havili, Reece, all players we would have cared even less about losing and all because Rieko had Lowe's number 11 jersey nailed down.


He was of course only 23 when he decided to leave, it was back in the beggining of the period they had started retaining players (from 2018 onwards I think, they came out saying theyre going to be more aggressive at some point). So he might, all of them, only just missed out.


The main point that Ed made is that situations like Lowe's, Aki's, JGP's, aren't going to happen in future. That's a bit of a "NZ" only problem, because those players need to reach such a high standard to be chosen by the All Blacks, were as a country like Ireland wants them a lot earlier like that. This is basically the 'ready in 3 years' concept Ireland relied on, versus the '5 years and they've left' concept' were that player is now ready to be chosen by the All Blacks (given a contract to play Super, ala SBW, and hopefully Manu).


The 'mercenary' thing that will take longer to expire, and which I was referring to, is the grandparents rule. The new kids coming through now aren't going to have as many gp born overseas, so the amount of players that can leave with a prospect of International rugby offer are going to drop dramatically at some point. All these kiwi fellas playing for a PI, is going to stop sadly.


The new era problem that will replace those old concerns is now French and Japanese clubs (doing the same as NRL teams have done for decades by) picking kids out of school. The problem here is not so much a national identity one, than it is a farm system where 9 in 10 players are left with nothing. A stunted education and no support in a foreign country (well they'll get kicked out of those countries were they don't in Australia).


It's the same sort of situation were NZ would be the big guy, but there weren't many downsides with it. The only one I can think was brought up but a poster on this site, I can't recall who it was, but he seemed to know a lot of kids coming from the Islands weren't really given the capability to fly back home during school xms holidays etc. That is probably something that should be fixed by the union. Otherwise getting someone like Fakatava over here for his last year of school definitely results in NZ being able to pick the cherries off the top but it also allows that player to develop and be able to represent Tonga and under age and possibly even later in his career. Where as a kid being taken from NZ is arguably going to be worse off in every respect other than perhaps money. Not going to develop as a person, not going to develop as a player as much, so I have a lotof sympathy for NZs case that I don't include them in that group but I certainly see where you're coming from and it encourages other countries to think they can do the same while not realising they're making a much worse experience/situation.

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