Premiership clubs will go bust . . .

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fleabane
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Premiership clubs will go bust . . .

Post by fleabane » Thu May 03, 2018 5:03 pm

The sun is out. The ground is hard. We should see some fantastic rugby in the Premiership play-offs. A new sponsor is on board for next season. Everything looks rosy.

Then you look under the surface at the accounts and a very different picture emerges. Worcester lost £8 million in the last tax year, London Irish £3m. Saracens are something like £45m in the red. There are rumours around Wasps’ long-term financial well-being. With the exception of Exeter, every club seems to be haemorrhaging money.

Nearly all Premiership clubs are backed by at least one very rich owner but as we have seen with Saracens’ South African backers pulling out, there is a point at which even a billionaire feels the pinch. I know that Nigel Wray has stepped up to pick up the shortfall. He is a great rugby man and will invest in Saracens until the day he dies, but not every owner is like him.

If clubs continue in his vein then another one of these owners will inevitably pull the plug and then it could be like a domino effect. In three years the English club game could be bankrupt and so drastic action is needed to curtail the main cost - players’ wages.

As the sad case of Sam Jones shows, a career can end in an instant and players need to maximise what they can earn. I don’t blame players for getting as much as they possibly can as it is a tough living; I blame the clubs for giving in to their demands.

The root of the problem is that a certain breed of owner with big personalities – other people would call them egos – will tell their chief executive or whoever is managing the purse strings to bring in this superstar in no matter the cost.

A lot of the time they are paying for these superstars straight from their own pocket, but what it has done is alter the market conditions. Now if you have got a marquee player on anywhere from £500,000 to £800,000 then other leading players at those clubs will say 'hold on, that guy is not twice as good as me'.

Effectively all you are doing is accelerating wage inflation by 15-25 per cent. If you do that across the board with a squad of 40-odd players then eventually that multiplies very quickly into big losses and smaller squads.

At the time I thought the marquee player rule was a great idea. It has been fantastic for the league to bring in big names like Louis Picamoles, Kurtley Beale, Matt Toomua or Taulupe Faletau. All those guys are amazing players and put bums on seats. The problem is that the knock-on effect has been to raise wages across the board to the point where the present model is unsustainable.

The marquee rule was brought in partly because so many clubs were, allegedly, flouting the salary cap. The idea was screw the wage cap, it is my money I will do what I want. Now strangely I think even those clubs would want to abide by the cap. Maybe they flaunted the rules previously, but now they are crying out for their costs to be controlled.

That means scrapping the marquee player and cutting wages by around 20 per cent. In order for this to work, the clubs have to act unilaterally. All it will take is for one club to keep paying over the odds for everyone else to resume their unsustainable arms race.

Another idea I have previously mentioned is following the American model of publicising all the players’ wages. There’s no worse rumour mill than a rugby changing room and this version of Chinese whispers allows agents to leverage great deals for their clients. I’ve heard stories about clubs paying nearly £300,000 for a third-string tighthead prop or a non-international second row who has never called a lineout; decent club players who should be on a third of that. It’s insane.

Putting all their wages out in the open would break the cartel that some agents operate in. There are several decent, straight-up guys, but I firmly believe the Premiership needs to find a way of taking agents out of rugby. There is enough money in football to sustain people taking a cut, but there certainly isn’t in what is a loss-making industry. Again, clubs would have to act unilaterally to make this work.

None of this is going to make me particularly popular with agents or players, but what is the alternative? Clubs will go to the wall if they carry on like they are. Cutting wages by 20 per cent could give a player an extra two years in your career because squads will be bigger and you can play less games a season, so it does balance out.

It is a heavy dose of short-term pain for long-term gain.

Article in The Telegraph by Austin Healey
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Mark62
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Re: Premiership clubs will go bust . . .

Post by Mark62 » Thu May 03, 2018 5:30 pm

Healey is spot on. I predict that a premiership club will go out of business by the end of next season.
Minimum of 20% wage cuts required plus I also am an advocate of central English contracts to ease the burden on the clubs.

One of the issues must be Income from fans. It is easy to forget that very few other clubs have attendance figures that Tigers do. A lot has been made of Sale and Newcastle performance this season and rightly so, but the size of each of their grounds, don’t have their capacity but can’t be more than 10k, doesn’t help with increasing the coffers.

As an aside the trickle effect of this goes down the leagues. We have 3 National 2 sides in Leicester. These players get paid which sometimes relies on the presence of a generous backer.
At this level 1st team players can be on £100 a week plus, which can then lead to internal divides at clubs.

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Re: Premiership clubs will go bust . . .

Post by h's dad » Thu May 03, 2018 6:56 pm

Mark62 wrote:
Thu May 03, 2018 5:30 pm
Healey is spot on. I predict that a premiership club will go out of business by the end of next season.
Minimum of 20% wage cuts required plus I also am an advocate of central English contracts to ease the burden on the clubs.

One of the issues must be Income from fans. It is easy to forget that very few other clubs have attendance figures that Tigers do. A lot has been made of Sale and Newcastle performance this season and rightly so, but the size of each of their grounds, don’t have their capacity but can’t be more than 10k, doesn’t help with increasing the coffers.

As an aside the trickle effect of this goes down the leagues. We have 3 National 2 sides in Leicester. These players get paid which sometimes relies on the presence of a generous backer.
At this level 1st team players can be on £100 a week plus, which can then lead to internal divides at clubs.
This is a Healey clickbait seeking work of fiction.
'nearly £300,000 for a third-string tighthead prop'? If you believe this have a very quick think about what a club's wage bill is likely to be if first and second choices are on a fair bit more. What have you got? - Yep, considerably more than even Saracens are paying. That is probably Dan Cole-ish money. I know of a premiership prop who is on a fraction of that and he's certainly not a third stringer. I don't know whether Healey is making this up or somebody is winding him up.
As for publishing wages in a similar way to the NFL. If they were on the superstar money of the NFL, maybe. That would be up to $37 million a year with an average of $1.9 million a year. Maybe you could apply it to soccer but not to 90% of our guys - it is an invasion of privacy. Some of them may well be embarrassed by how little they are on. Ludicrous and insulting.
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Flash
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Re: Premiership clubs will go bust . . .

Post by Flash » Thu May 03, 2018 7:14 pm

Unless he's referring to Cilliers :smt012

Mark62
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Re: Premiership clubs will go bust . . .

Post by Mark62 » Thu May 03, 2018 7:14 pm

I agree that the player part is both inaccurate and unnecessary, however the gist of the article that a number of premiership clubs are operating at a heavy loss and the very real possibility of going out of business

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Re: Premiership clubs will go bust . . .

Post by ellis9 » Thu May 03, 2018 8:48 pm

Mark62 wrote:
Thu May 03, 2018 5:30 pm
Healey is spot on. I predict that a premiership club will go out of business by the end of next season.
Minimum of 20% wage cuts required plus I also am an advocate of central English contracts to ease the burden on the clubs.

One of the issues must be Income from fans. It is easy to forget that very few other clubs have attendance figures that Tigers do. A lot has been made of Sale and Newcastle performance this season and rightly so, but the size of each of their grounds, don’t have their capacity but can’t be more than 10k, doesn’t help with increasing the coffers.

As an aside the trickle effect of this goes down the leagues. We have 3 National 2 sides in Leicester. These players get paid which sometimes relies on the presence of a generous backer.
At this level 1st team players can be on £100 a week plus, which can then lead to internal divides at clubs.
It doesn't need central contracts. Clubs just need to pay players what they can actually afford. If that's up to the salary cap then fine, it's it's only £2 million, then spend up to that. It really is rocket science.

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Re: Premiership clubs will go bust . . .

Post by ellis9 » Thu May 03, 2018 8:50 pm

h's dad wrote:
Thu May 03, 2018 6:56 pm
Mark62 wrote:
Thu May 03, 2018 5:30 pm
Healey is spot on. I predict that a premiership club will go out of business by the end of next season.
Minimum of 20% wage cuts required plus I also am an advocate of central English contracts to ease the burden on the clubs.

One of the issues must be Income from fans. It is easy to forget that very few other clubs have attendance figures that Tigers do. A lot has been made of Sale and Newcastle performance this season and rightly so, but the size of each of their grounds, don’t have their capacity but can’t be more than 10k, doesn’t help with increasing the coffers.

As an aside the trickle effect of this goes down the leagues. We have 3 National 2 sides in Leicester. These players get paid which sometimes relies on the presence of a generous backer.
At this level 1st team players can be on £100 a week plus, which can then lead to internal divides at clubs.
This is a Healey clickbait seeking work of fiction.
'nearly £300,000 for a third-string tighthead prop'? If you believe this have a very quick think about what a club's wage bill is likely to be if first and second choices are on a fair bit more. What have you got? - Yep, considerably more than even Saracens are paying. That is probably Dan Cole-ish money. I know of a premiership prop who is on a fraction of that and he's certainly not a third stringer. I don't know whether Healey is making this up or somebody is winding him up.
As for publishing wages in a similar way to the NFL. If they were on the superstar money of the NFL, maybe. That would be up to $37 million a year with an average of $1.9 million a year. Maybe you could apply it to soccer but not to 90% of our guys - it is an invasion of privacy. Some of them may well be embarrassed by how little they are on. Ludicrous and insulting.
Perhaps the clubs 1st choice is on £400k and 2nd choice on £320k. I'd imagine he has enough people he knows that are in the know. He wouldn't make it up. It's well documented that Tigers are paying too much for a player down the pecking order.

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Re: Premiership clubs will go bust . . .

Post by Mark62 » Thu May 03, 2018 9:05 pm

Ellis9 no it isn’t rocket science, but unless you can get global agreement on reducing players wages you will face an exodus of star players to France and Japan.

As has been discussed many times a players playing life can be a short one

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Re: Premiership clubs will go bust . . .

Post by ellis9 » Thu May 03, 2018 9:09 pm

Mark62 wrote:
Thu May 03, 2018 9:05 pm
Ellis9 no it isn’t rocket science, but unless you can get global agreement on reducing players wages you will face an exodus of star players to France and Japan.

As has been discussed many times a players playing life can be a short one
Not with the 'Only England based players can play for England' rule.

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Re: Premiership clubs will go bust . . .

Post by Mark62 » Thu May 03, 2018 9:18 pm

ellis9 wrote:
Thu May 03, 2018 9:09 pm
Mark62 wrote:
Thu May 03, 2018 9:05 pm
Ellis9 no it isn’t rocket science, but unless you can get global agreement on reducing players wages you will face an exodus of star players to France and Japan.

As has been discussed many times a players playing life can be a short one
Not with the 'Only England based players can play for England' rule.
I just question how many would then choose the Euro or the Yen over caps, certainly some would.
Would that then force the rfu hand especially if Jones was no longer in charge

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Re: Premiership clubs will go bust . . .

Post by ellis9 » Thu May 03, 2018 9:52 pm

Mark62 wrote:
Thu May 03, 2018 9:18 pm
ellis9 wrote:
Thu May 03, 2018 9:09 pm
Mark62 wrote:
Thu May 03, 2018 9:05 pm
Ellis9 no it isn’t rocket science, but unless you can get global agreement on reducing players wages you will face an exodus of star players to France and Japan.

As has been discussed many times a players playing life can be a short one
Not with the 'Only England based players can play for England' rule.
I just question how many would then choose the Euro or the Yen over caps, certainly some would.
Would that then force the rfu hand especially if Jones was no longer in charge
Probably just as many as when the French really started throwing money around and paid much higher than English clubs. So not many at all. Just the greedy ones. :smt023

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Re: Premiership clubs will go bust . . .

Post by Mark62 » Thu May 03, 2018 10:07 pm

Well lets hope the position never arises where you would be proved wrong

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Re: Premiership clubs will go bust . . .

Post by h's dad » Fri May 04, 2018 3:04 am

ellis9 wrote:
Thu May 03, 2018 8:50 pm
h's dad wrote:
Thu May 03, 2018 6:56 pm
This is a Healey clickbait seeking work of fiction.
'nearly £300,000 for a third-string tighthead prop'? If you believe this have a very quick think about what a club's wage bill is likely to be if first and second choices are on a fair bit more. What have you got? - Yep, considerably more than even Saracens are paying. That is probably Dan Cole-ish money. I know of a premiership prop who is on a fraction of that and he's certainly not a third stringer. I don't know whether Healey is making this up or somebody is winding him up.
As for publishing wages in a similar way to the NFL. If they were on the superstar money of the NFL, maybe. That would be up to $37 million a year with an average of $1.9 million a year. Maybe you could apply it to soccer but not to 90% of our guys - it is an invasion of privacy. Some of them may well be embarrassed by how little they are on. Ludicrous and insulting.
Perhaps the clubs 1st choice is on £400k and 2nd choice on £320k. I'd imagine he has enough people he knows that are in the know. He wouldn't make it up. It's well documented that Tigers are paying too much for a player down the pecking order.
So well over a million to cover a single position. And for Healey's proposal to be valid this has to be typical. Sorry Ellis, but it's drivel
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Re: Premiership clubs will go bust . . .

Post by Rugbyflanker » Fri May 04, 2018 4:17 am


ellis9
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Re: Premiership clubs will go bust . . .

Post by ellis9 » Fri May 04, 2018 9:25 am

h's dad wrote:
Fri May 04, 2018 3:04 am
ellis9 wrote:
Thu May 03, 2018 8:50 pm
h's dad wrote:
Thu May 03, 2018 6:56 pm
This is a Healey clickbait seeking work of fiction.
'nearly £300,000 for a third-string tighthead prop'? If you believe this have a very quick think about what a club's wage bill is likely to be if first and second choices are on a fair bit more. What have you got? - Yep, considerably more than even Saracens are paying. That is probably Dan Cole-ish money. I know of a premiership prop who is on a fraction of that and he's certainly not a third stringer. I don't know whether Healey is making this up or somebody is winding him up.
As for publishing wages in a similar way to the NFL. If they were on the superstar money of the NFL, maybe. That would be up to $37 million a year with an average of $1.9 million a year. Maybe you could apply it to soccer but not to 90% of our guys - it is an invasion of privacy. Some of them may well be embarrassed by how little they are on. Ludicrous and insulting.
Perhaps the clubs 1st choice is on £400k and 2nd choice on £320k. I'd imagine he has enough people he knows that are in the know. He wouldn't make it up. It's well documented that Tigers are paying too much for a player down the pecking order.
So well over a million to cover a single position. And for Healey's proposal to be valid this has to be typical. Sorry Ellis, but it's drivel
In a squad of 43 players that would leave an average of £149,500 per player for the other 40 players, if the £400k wasn't a marquee player. Obviously, there'd be some players on £200k and some under £100k so those figures are definitely realistic.

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