Inside story of how England’s top rugby clubs survived pandemic peril and collective £ 100million losses
English rugby can thank club owners and the government for escaping a financial cliff during Covid – but with Â£ 100million in collective losses expected, there are obstacles in the way.
On Friday night, the Premiership kicked off their first âback to normalâ season with a big crowd at Ashton Gate for the Saracens’ return to Bristol.
After a season and a half of restrictions that have wracked the club’s finances, those holding the purse strings are determined to be better for 18 hellish months with no fans, ticket sales or noticeable income but with still high costs.
Bath expects to absorb Â£ 7-8million blow after season and a half of Covid restrictions
Whether sustainable for the game or not, there is no doubt among GMs that several Premiership clubs could have closed without the 13 private owners and a Â£ 59million government bailout loan as Covid crippled game funds.
âRugby in purely financial terms is neither sustainable nor solvent, it is supported by the owners. If I’m being honest, and maybe it’s not popular, I thank them for that, “Bath CEO Tarquin McDonald told Sportsmail.
“They kept the game going which is amazing and they don’t get any thanks for it.”
Lance Bradley, Managing Director of Gloucester, explains how vital rugby’s part of the government’s winter survival program was. “We certainly would not have existed as a club without this money and we are by no means in the worst financial situation,” he said. âIt saved a number of clubs.
The cumulative losses in the league are likely to rise to around Â£ 100million when the two financial years affected by Covid are combined.
The Gallagher Premiership kicked off their first ‘back to normal’ season on Friday night
In Bath, for example, they expect a hit of Â£ 7-8million during that time and Exeter, previously the league’s only profitable organization, doesn’t expect another lucrative year for a some time, having suffered more than others from not being able to use their lucrative conference areas at Sandy Park.
But there are green shoots of recovery. Gloucester has signed seven locked-out âsix-figureâ sponsorship deals – âa game changerâ – commented Bradley.
Clubs have taken the time to re-evaluate everything they do.
“We installed a new ticketing system, a public address system, a new website, we drastically reduced the costs on the commercial side of the business, which is starting to come back, brought our catering in-house as we thought we could do it better and make more money, âBradley said.
“We believe that will bring us to a balanced position for this year.”
Aided by a Â£ 13million per club private equity investment by League partners CVC – some of which have yet to be made public – Exeter continued to build a Â£ 35million hotel on its grounds and a new stand to increase capacity to 16,000 later this season.
The clubs have survived despite the lack of fans, ticket sales or noticeable income, but with costs still high
Saracens will also erect a 3,000-seat booth funded by a Â£ 22.9million loan from Barnet City Council.
“Now we have to hope that these bets and investments pay off,” said Exeter boss Rob Baxter, who warned tough times could be ahead.
âYou might see some clubs in a financial situation that you can’t get out of, I don’t know, but what we need to do is work together to produce something that people want to watch and get involved in. “
Clearly, there have been big changes. Most clubs have slashed their players’ salaries by around 25% in 2020, with the departure of several high-income players, and it is understood that around half of the league will not pay the salary cap from now on. competition which has been reduced from Â£ 6.4million to Â£ 5m this season.
The Premiership has also expanded to 13 teams, with Saracens reinstating and no squads demoted last season, with one more possibility of joining in the Championship 2022 if they meet ‘minimum standards’ criteria.
This relegation break for at least two years was seen as vital.
Gloucester hopes to break even this year despite coronavirus pandemic
“If you were to go through Covid and then be relegated, it would have been more than the straw that broke the camel’s back – the great anvil maybe!” McDonald said.
âThis stability is extremely important. The moratorium on relegation is a fundamental part of the recovery from Covid.
Going forward, there could be talks about adding quarter-finals to a 14-team league, to add end-of-season drama – one of the many ideas to be discussed when the new league CEO , Simon Massie-Taylor, will take over.
Emerging from Covid, there is a feeling that clubs are more streamlined, collaborate more and are better equipped for the post-pandemic future of rugby – as long as the fans really come back in force.
âWe come out of Covid comfortable and confident in our own skin,â McDonald said.
Bradley added: “We’re going through the difficult time. As long as it’s a normal season, we’re back on track.