Professional rugby union is operating on the brink, with spiralling player wages leading to smaller squads and everyone from World Rugby to Ross Moriarty being accused of greed as they look to maximise income. Sponsorship revenues continue to fall, and doubts persist over whether the next television deal will be worth the same as the last one. But can everyone stop being so miserable?
Rugby has thrived from living on the edge. It has never felt secure, from the days when Sir John Hall’s money drove Newcastle Falcons to the title to Wasps moving NFL-style to Coventry — but look how far the sport has come over the past two decades. The money, the attendances and the global interest in the game have all grown massively since the mid-1990s. We live in a capitalist society and if rugby is to keep growing at that pace then on the brink is exactly where we need to be, because that is what drives things forward.
The biggest danger is that ambition overrules business sense — exhibit A: London Welsh — but that is not unique to sport. In normal industry, businesses fail every day and those closures offer valuable lessons to others. Only the strongest survive. We have seen that in rugby too. Exeter Chiefs came up to the Aviva Premiership with a solid business model and grew to become English champions. London Welsh, in contrast, had a plan that could have been sketched on the back of a beer mat and, to the surprise of nobody, they collapsed as a professional entity.
Sport is different to normal industry, though, because the clubs tend to be part of the fabric of a community into which people have invested money and emotion. Therefore, there are special controls, such as the salary cap and safety nets because we are loath to let certain clubs fail. Just like the government did with RBS, the Welsh Rugby Union could not let the Dragons go out of business, so stepped in to save them.
The Dragons have signed Moriarty from Gloucester on a £1 million, two-year contract. The player stood accused of greed, even though he had to move to a Welsh region to play international rugby. Is it his fault that he was offered a chance to become the highest-paid player in Wales? No. It is not greed. It is market forces.
Moriarty moved for international rugby, not for the money. Neither George Ford nor Owen Farrell went chasing the cash when signing their latest contracts. Ford moved to Leicester Tigers and Farrell stayed at Saracens because they felt it was best for their careers. Can the Dragons afford Moriarty and George North? Only they know but if the region is to grow then they need to invest, they need to take calculated risks.
Rugby is like its own mini global economy. Premiership clubs want to be able to run their own affairs and their Brexit moment was to seize control of the European competitions. Having done so, things have not been as rosy as was promised during the campaign. Sound familiar?
There are strong arguments on both sides of the Channel that there are too many foreign players in English and French club rugby — but Polynesians represent cheap labour coming into a rich market. An English player, with an agent working on their behalf, will cost more than a Samoan player of the same ability.
The salary cap in the Premiership is, depending which end of the table your club sit, either an anti-competitive policy or an anti-monopoly policy. It is designed to act as a handbrake on the natural market forces. The league has to operate as a cartel because even the richest clubs would acknowledge that they need opponents to play — there is no point driving all rivals out of business. I would like to see a minimum squad size introduced because that would slow the rise in player salaries.
The ring-fencing argument would work against the capitalist idea of risk-taking and some of the clubs who have been down argue it was the best thing that could have happened to them. Northampton Saints and Harlequins came back to win the league. Would they have done so had relegation not forced them to redraw their business models? I doubt it.
The most important word in rugby economics is “yield”. Exeter posted a £1 million profit and immediately fans asked the club to reduce ticket prices and the cost of a pint. But Tony Rowe, the chief executive, wants that money to help grow the club from being English to European champions.
Wasps moved to Coventry because they thought that it was the best place to increase their yield and make the club sustainable.
The RFU’s ticket prices are extortionate for the average person and Eddie Jones was even asked to justify whether England’s display against Argentina offered value for money to supporters who had paid more than £100. And yet the stadium was sold out. The RFU is not greedy. It is trying to find the balance where it can make the most money to grow the game, while also attracting people through the turnstiles.
There is talk that Premiership clubs cannot afford the wages being paid. They can at the moment and clubs are trying to strike the right balance between a squad big enough to cope with the attrition rate and one good enough to win a trophy.
If squads became so stretched that Premiership games had to be postponed, that would force a rethink, tell us the balance was wrong and lead to a reduction in wages.
We are living on the edge in rugby, we have been since the game went professional and it has served us pretty well. It will continue to do so providing that the owners remain responsible custodians of their clubs.