Rugby Finances
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Premiership Rugby clubs post losses of almost £25m for 2022-23 season
Saracens posted biggest losses of over £5 million, while Newcastle Falcons have not yet made their finances for 2022-23 period public
Premiership Rugby clubs post losses of almost £25m for 2022-23 season
Saracens posted biggest losses of over £5 million, while Newcastle Falcons have not yet made their finances for 2022-23 period publicBen Coles,
RUGBY REPORTER
29 March 2024 • 1:17pm55
Nine of 10 Gallagher Premiership clubs have posted financial losses which total almost £25 million for the 2022-23 season.
Newcastle Falcons have yet to publicly post their results for the last financial year but of the data available, nine clubs cumulatively made a loss of around £23.5 million.
Saracens posted the biggest loss at £5,295,310, with the club’s turnover of £23,206,354 falling well short of their £28,559,147 budget.
Bristol Bears, backed by the billionaire Steve Lansdown, finished with a total loss of £4,554,814. Harlequins posted the highest turnover, £26,813,85, but had the largest budget at £30,392,791, resulting in a loss of £3,648.893.
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Gloucester produced the best results due to having a budget of £18,291,675, which was marginally higher than the club’s turnover of £18,162,660, making an eventual loss of £393,079. Two other clubs produced losses which were below the half a million figure, with Sale making a £439,294 loss and Northampton a £467,836 loss.
Sale notably had the lowest turnover, £11,735,339, but also the lowest budget of £16,496,292. They were also one of only two clubs, along with fellow Premiership finalists Saracens, to produce a positive net financing costs figure of £258,953.
The results also disclose the number of people employed by each club, with Exeter recording the highest figure of 354 of which 156 were coaches and players. Bristol employed the fewest number of people (155) and number of players and staff (87).
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Exeter’s financial results, with a loss of £3,994,469, included the hotel built on site at Sandy Park, which made a loss of £2m over the course of the financial year. The hotel has since been sold off, with Exeter’s chairman and chief executive, Tony Rowe, buying an undisclosed stake in the Sandy Park Hotel back in December 2022 to help pay off the club’s Covid-19 loans.
Exeter said at the time: “The fee paid for the shares by Mr Rowe not only provides an injection of capital to keep cashflow going, but will also help service substantial debts accrued by Exeter Rugby Club due to the impact of the Covid pandemic in 2020. Directors will use “their best endeavours” to retain “at least” 26 per cent shareholding in the hotel company.”
Premiership Rugby has been contacted for comment.
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Analysis: Rugby still feeling Covid after effects
Perhaps the main factor to consider when analysing the latest accounts for the nine Premiership clubs, with Newcastle still to come, is that teams across the league are still feeling the financial effects of the pandemic, hit hard by that loss of matchday revenue.Seeing that amount of red on a spreadsheet naturally leads to concern but among the numbers there are some positives, such as Northampton posting a record turnover of nearly £22 million, up by a million on the previous year. Even a club in as strong a position as Northampton is still going to be confronted with costs, with their cash balance dropping due to the construction of the club’s new High Performance Centre.
The Premiership is still reeling from the loss of Worcester Warriors, Wasps and London Irish during the previous season and, predominantly, clubs appear to be cautious. Take Sale’s budget, around £16.5 million, being almost half of that of Harlequins (£30.4 million).
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The same long-term concerns remain. Certain clubs relying on the large investment of owners with deep pockets, a TV deal which lags far behind the money paid for the rights to the Top 14 in France, the fact that clubs with excellent attendance figures and large capacities – Leicester, Northampton, Gloucester – are occasionally falling short of making a profit. Not forgetting that the salary cap ceiling is set to rise next season from £5 million to £6.4 million – the timing of which seems highly questionable – or how the Covid-19 loans from the government will be repaid.
These are all existing issues which require long-term solutions but right now, the aim across the Premiership appears to be to create stability.
At the same time, sources close to the league are optimistic about an increase in supporter numbers this season at matches, with gate numbers continuing to climb and up by around five per cent on the previous season. The more people back in grounds, the more revenue. Right now, every extra pound feels important.
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With the SRU having recorded an annual loss of £10.5 million in its most recent accounts, McGuigan acknowledged that an even bigger deficit is likely next time, but believes the organisation can be back in the black by 2026.
He insists it is credible to envisage increasing annual turnover from below £70 million to over £100 million in this period, but did express bemusement at how quickly the union has frittered away two vast chunks of investment from CVC, the private equity firm, as well as a £15 million grant from the Scottish Government during Covid times.
“There are things you can point to. The women’s game is pretty expensive, you’ve got a significant investment in the pro teams. If other people are on £5 million and ours are on £8 million, that’s significant. There has been an uplift in player salaries, so you can start to understand where some of the money has gone.
“That’s OK as long as you’ve got a line of sight towards a future revenue stream that gives you extra confidence about the extra money you’re deploying into things which are effectively day-to-day running costs — not strategic investments. Confidence that you’ve found a revenue stream that allows that to continue for the long term.
“That’s the piece that’s missing in the jigsaw puzzle. How do we get to a place where the revenue stream offsets the fact we will no longer have these opportunities through CVC and government grants? That’s the piece we’ve got to fix, that’s the piece that’s very urgent and why we are sitting with losses every year.
“We’ve been running a business hot in terms of costs, with an underlying revenue stream that doesn’t support that level of costs.”
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Genius administrators spending more on elements that don't pay for themselves, and continuing to offer increases without acknowledgment of the cost pressures extant. And these are supposed to be educated professionals.
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The said the quiet part out loud in that the woman's game is expensive.
The woman's game is great for player numbers and getting new people into the game, but terrible from a revenue perspective.
So you have existing teams with bloated salaries already loosing money and invest heavily in another area of the game that will lose you even more money. The first one itself will get you into enough trouble as it is.
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CVC deal has sucked the life out of the Gallagher Premiership
Five years on from being promised an uplift in fortunes, England falls behind France, Japan and Ireland as a destination for international superstars . . . and TV money
The numbers look like this: before CVC, the clubs were getting £40 million in TV money per season; soon they will be on £33 million and giving 27 per cent away. So the pot is only just over half what it was seven years ago.
That's a 40% reduction in revenue.
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@Windows97 said in Rugby Finances:
The said the quiet part out loud in that the woman's game is expensive.
The woman's game is great for player numbers and getting new people into the game, but terrible from a revenue perspective.
So you have existing teams with bloated salaries already loosing money and invest heavily in another area of the game that will lose you even more money. The first one itself will get you into enough trouble as it is.
I think in sports, participation at all levels is the primary goal and value in and of itself, so if this leads to increased female player numbers at club level (say), it's a useful item to spend money on.
Harder to tell whether professional female teams and competitions will generate advertising and sponsorship revenue that make them self-sustaining in the long term, but as part of the 'shop window' so to speak, there is value separate from that.
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England play Japan in a test in Tokyo next month en route to New Zealand but no UK broadcaster has shown enough interest in the game to secure coverage, raising the prospect that for the first time in decades, an English test may not screen in the Mother Country.
Sports Insider: Folly of private equity play looms large over rugby's future
ANALYSIS: What to do with the lemon that is Silver Lake.
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Could be a cracking match
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@Rapido said in Rugby Finances:
@Tim said in Rugby Finances:
ANALYSIS: What to do with the lemon that is Silver Lake.
Pay them. Forever. And ever and ever.
transfer any assets out of NZR too a new organisation NZRU....declare NZR bankrupt...forget silverlake exists?
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Rugby Pass published this comparison last month:
The Top 14’s annual broadcast revenue of $151.2 million far exceeds that of Super Rugby Pacific ($81.2 million), United Rugby Championship (URC) ($70 million) and Premiership Rugby ($42.9 million).
If they converted currencies accurately, that would give Super Rugby clubs the second highest TV revenue per team. (Top 14 has 14 teams, Super Rugby 12, URC 16, and Guiness Premiership 12.)
It will be interesting to see how long the Premiership lasts.
French rugby's blockbuster TV deal leaves rival leagues in the dust
New figures reveal that the French Top 14 has significantly widened the revenue gap with other domestic rugby competitions, thanks to a...
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@Tim said in Rugby Finances:
Rugby Pass published this comparison last month:
The Top 14’s annual broadcast revenue of $151.2 million far exceeds that of Super Rugby Pacific ($81.2 million), United Rugby Championship (URC) ($70 million) and Premiership Rugby ($42.9 million).
If they converted currencies accurately, that would give Super Rugby clubs the second highest TV revenue per team. (Top 14 has 14 teams, Super Rugby 12, URC 16, and Guiness Premiership 12.)
It will be interesting to see how long the Premiership lasts.
French rugby's blockbuster TV deal leaves rival leagues in the dust
New figures reveal that the French Top 14 has significantly widened the revenue gap with other domestic rugby competitions, thanks to a...
Does the Super Rugby deal not also include All Blacks fixtures and the NPC?
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I think the current deal is about NZD 135m per year (100m to Sky, 35m to Stan), but that includes all levels, not just Super. NZR also previously claimed about 40 per cent of their deal with Sky was for the NPC but that's just them playing silly buggers.
Worth noting that they'll be renegotiating at the moment, will be interesting to see what the deal is from 2025...
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Bit of a financial squeeze happening.
The NZR telecast rights deal is all teams and comps in.
The broadcasters only really want the ABs, with a bit of extra content for channel filler thrown in. How the money is parcelled out is NZR business. Which, I guess, is what the current imbroglio is all about.
The ABs are the only team in the profit column, therefore, the AB players and NZR administrators (unfortunately) are safe, whatever happens.
All the other teams in New Zealand lose/cost money. Using the “parcel outs” from NZR to ultimately balance the books all the way down the pyramid.
The real cost of SR right now would be very interesting to know. And right now, I don’t think anyone does. Can only be guessed at. Must be costing too much though – that’s why they want to cut the PUs out of the picture.
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Probably the best thread for this interesting juxtaposition on twitter (X)
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