Saracens write off over £45m of debt

It’s that time of year again when companies file their balance sheets for the previous fiscal year.

Gallagher Premiership financial reports have been particularly interesting reading over the last few seasons, as clubs up and down the country have struggled to match their revenues with the increasing costs of the sport, which have been influenced by the recent increases to the competition’s salary cap. For the fiscal year ending in 2017, only Exeter Chiefs were able to produce a profit.

One of the more interesting returns filed this year has been by Saracens, with the club from north London long characterised by their mounting debt.

According to the results filed by Saracens Limited, which run up to the 30th June 2018, the club have written off just under £48m of debt owed to the parent company of Premier Team Holdings Limited.

They have opted to convert the loans from Premier Team Holdings Limited into equity, with Nigel Wray owning a 99% stake in that company, following the decision of Remgro to sell up their 50% ownership. Premier Team Holdings Limited, in turn, owns an 89.8% stake in Saracens Limited.

With this move coinciding with CVC Capital Partners’ investment in Premiership Rugby, Saracens’ financial records are likely to look a lot more healthy in the seasons to come.

For the year finishing June 30th 2018, Saracens posted an operating loss of £3.8m, an increase of £1.1m from the previous year. Those increased costs have been attributed to restructuring one-offs, as well as extra investment in both the women’s team and the club’s academy. For the three years prior to that, annual losses had been diminishing at the club.

Turnover, meanwhile, was up by roughly £400k, with revenues of just shy of £18m for the year.

Saracens are in line to receive a payment somewhere in the region of £13.5m from the CVC investment, with CVC allowing clubs the opportunity reinvest up to 10% of the proceeds from the overall deal (£200m) into the company TopCo. The thirteen shareholders in PRL will therefore have the opportunity to invest roughly £1.5m apiece into this company which, per Wray’s Chairmen’s Statement, Saracens will be doing.

The club’s £23m redevelopment of the West Stand at Allianz Park, which has been planned and worked on in conjunction with Middlesex University, is set to begin at the end of the 2018/19 season and is slated for completion in 2020, as the club looks to create a more sustainable future for itself.

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