Rugby union should be wary of following football into financial fantasy land

As English football struggles to find its way through the clouds blown up by the Sam Allardyce affair,  it is perhaps as well for rugby union that there is barely a transfer market to speak of and no scope for third party ownership.

Football is awash with money, but it is not the root of all evil. The salaries of some Premier League managers exceed the salary cap in the Aviva Premiership, and while there was a whiff of scandal last year with allegations of cap irregularities investigated and buried, there is far from a financial surfeit at the top level.

Leicester Tigers chief executive Simon Cohen is already warning that the premiership salary cap is at a dangerously high level. For there is now a clear dividing line in the Premiership between those clubs, such as Leicester, Gloucester, Northampton and Harlequins and Sale who spend what they earn and others such as Saracens and Bath, who have loaded backers, and Wasps, who raised £35m through a bond scheme.

Cohen’s point, which contained the implicit message that clubs trying to live within their means were being forced to keep up with those prepared to carry debt, was that wage inflation had reached a level where all players, whether top internationals or rank and file, were earning considerably more than a few years ago and that squad sizes were, as a consequence, shrinking.

“Smaller squads are detrimental to player welfare,” he said. “Players will play more matches in a sport that is becoming quicker and faster with bigger hits coming in all the time. I think the salary cap is at a point where it will be dangerous for the game if it goes higher. Spending on players is going up from £60m to £80m this season and a huge amount of revenue that could have gone into stands, community projects and developing the game, has gone straight into the pockets of players at a time when it is becoming much, much harder to fund the salary cap.”

At least the Premiership has a fixed cap which every club has to adhere to. It is different in the Pro12 where most of the sides are funded directly by their unions. The Welsh regions have a salary limit of £4.5m which is less than their rivals in other countries, but they have some relief in the form of national player contracts which means the Welsh Rugby Union pays the bulk of the wages of the (relatively few) players concerned.

In France, the cap is £10m, although there are ways to extend it, as Racing 92 are doing with Dan Carter and Toulon did with Jonny Wilkinson, and bonuses are allowed on top of the cap as long as they do not exceed 10% of it. It is rigorously, and transparently, policed as Toulon found out last season when fined for breaching the bonus limit, an affront the club’s owner Mourad Boudjellal, who is still sore enough to question whether he wants to remain in the game.

Clubs in England and France have in the past couple of seasons enjoyed a substantial increase in revenue due to television and sponsorship deals. Cohen’s contention is that, like football where the Premier League has had an explosion in income since Sky was joined in the rights’ pursuit by BT, the extra money goes on wages with little filtering its way into improved facilities, investment or subsidising costs borne by supporters. It is to football’s( the round ball variety) shame that despite all 20 Premier League clubs being on European football’s rich list, they make players and managers multi-millionaires while expecting supporters to, at best, cough up as much as before.

The more they have, the more they spend to the point where they are no better off. If the bubble bursts, supporters will not switch allegiances like players and will be the ones counting the cost.

Rugby union remains a sport where interaction with paying supporters remains important. It was not that long ago that Leicester were among the clubs lobbying for a rise in the salary cap to help English clubs compete with the French and Irish in Europe: the best supported club in the country had the means to fund the increase, but others now have greater spending power through debts that are guaranteed.

Premiership Rugby did not enjoy its finest hour last year when revealing the outcome of the salary cap investigation into whether certain, unnamed clubs had exploited a loophole or two. It seemed to be a case of “we know who it is, and if they do it again, there may be trouble.” It says it has tightened up procedures, but supporters are entitled to transparency on a French level.

Clubs in France are often mocked for their spending, but anyone who either exceeds the cap or fails to provide the means to pay the budget it declared at the start of a season is punished severely; relegation in the case of the latter.

Financial fair play in England would be a start to ensure that clubs bankrolled by debt do not threaten the financial models of those who balance the books. The salary cap has reached its sustainable level for the near future and as recent events in football have shown, rugby needs to keep in contact with its roots, not unreality.

Mike Miles

 

www.scrumdown.org.uk

 

mike.miles@scrumdown.org.uk

 

 

 

Pumas are simply following the money

When the Sex Pistols reformed in 1996 they offered no pretence as to why, naming their comeback the “Filthy Lucre” tour.

On Saturday evening just under 50,000 people watched Argentina lose to Australia in the Southern hemisphere Rugby Championship. The game was played at Twickenham Stadium, London, England.

When Australia last played Argentina away the game was staged in Mendoza in front of 25,000. When the two sides met in Perth last month fewer than 17,000 turned up. The last four matches between Australia and Argentina in the tournament have been watched by fewer than 72,000 spectators.

Argentina may have been a bit more delicate than the Sex Pistols about their decision to sacrifice home advantage and play Australia at Twickenham, but it all adds up to the same thing – money.

 

With Sanzar’s desire to have the income generated by Test matches between tier one nations pooled, including Lions tours, understandably not generating much support in Europe, Saturday could be seen as a foretaste of matches to come.

On hearing that Argentina would be playing Argentina at Twickenham, England’s Ben Young‘s reaction was: “I couldn’t imagine going to Melbourne to play a test against Ireland.” But the point is England have no need to leave Twickenham to attract a big crowd.

New Zealand have already played Australia in Hong Kong and will take on Ireland in Chicago this autumn as part of their bid to tap into new markets and broaden their commercial base. England’s advice to the World Champions was to build a new, suitably large, stadium rather than take tests around a country that is made up of two islands – an attitude that suggests the R.F.U. is not too bothered about how their supporters in the northern part of the country manage to get to Twickenham and back up to six or seven times a year. Ian Ritchie, the RFU chief executive, refuses even to countenance a match in the north of England, never mind North America.

 

If England laugh at the suggestion Test match income should be pooled, how would they react to a request by New Zealand to play a match at Twickenham? By demanding a high rental fee probably. But if the friendly international calendar changes after 2019 so that neither hemisphere has to embark on an end-of-season tour, then end of August into September could become the window for what are now the autumn and summer series, blending the two into one. The All Blacks could play England at Twickenham on consecutive weekends, or Wales in Cardiff or France in Paris, away in the first and home in the second, thereby banking far more than they would for a match at Eden Park

 

Club borders are already expanding. The Aviva Premiership ventured into the United States last season when London Irish played Saracens in New Jersey. The French Top14 played its final last year at the Nou Camp in Barcelona in front of a full house.

Players have moved from the south to the north in ever growing numbers in the professional era, following the money just as their countries now are. Oregan Hoskins, the former president of South African Rugby, said recently that he believed South Africa should leave Sanzar (and therefore Super Rugby and the Rugby Championship) and link up with the European unions, taking advantage of the same time zone. He is speaking against a backdrop in his country of falling gates, fewer television viewers and the loss of sponsors.

The figures may mean that South Africa heed Hopkins’s advice and act out of self-interest rather than solidarity. If he had floated his idea a generation ago, when the south was the powerhouse of the game on the field and in the bank he would have been laughed at.  But not anymore, which is why Argentina and Australia, two countries not in Europe’s time zone were playing in London on the money trail.

 

 

Mike Miles

 

www.scrumdown.org.uk

 

mike.miles@scrumdown.org.uk

 

 

Rugby follows football….Oh dear

Wasps were comfortably holding on to their 13-5 lead against Northampton last weekend, when the referee awarded the home side a penalty after Wasps’ Jimmy Gopperth gave him some verbals.At one stage his indiscretion threatened to cost his team the match, and his coach, Dai young, pointed out that while it is difficult for players not to shout at a referee in the heat of the moment, players have been made aware of the Premiership crackdown on dissent, and should not be allowed to fulminate like footballers.

 

In the same match Saints full back Ben Foden was clattered late by Nathan Hughes, and had a long look at the referee before writhing around in pain. He is not the first rugby player taken to rolling around on the floor after being body-checked or late tackled and then casting a beady eye on the referee or touch-judge to see if their con act has worked. Obviously it’s football’s fault, a sport long plagued by players as if they were auditioning for Swan Lake.

 

At the Bristol/Exeter match over the same weekend there were reports of a “skirmish” between rival fans in the South Stand at Ashton Gate.  In the grand scheme of things there will be those rugby apologists who argue that it was only a flashpoint incident, and that such booze-filled altercations have been routine down the years at football grounds. And after all, Ashton Gate also hosts Bristol City, so perhaps there was something in the air.

 

But it ill-behoves rugby to try and claim any moral high ground up against football. Consider that we have just had Chris Ashworth’s biting incident, an act of gouging by Brive fly-half Matthieu Ugalde in France’s Top 14, reports in New Zealand of a “lewd” evening involving a Super Rugby franchise , and a young player spared jail for a vicious assault as it might impact on his developing career.

 

Rugby can certainly not afford to be smug.

 

 

 

 

Mike Miles

 

www.scrumdown.org.uk

 

mike.miles@scrumdown.org.uk