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RUGBY UNION

SUGAR DADDY RUGBY

What’s Breaking the maul ‘n’ brawl sport’s metaphorical bank? Kieran Longworth scrums down in search of an answer.

Illustration: Isaac Peck & Mark Ashton

‘Sugar daddy rugby’, first coined by England’s only World Cup-winning captain Martin Johnson, in his autobiography following the triumph of 2003, denotes the reliance of professional English rugby clubs on their millionaire investors. 

It was then a relatively new phenomenon, as rugby union only turned professional in 1995. Yet 28 years later, the sport still doesn’t feel comfortable with its self-image as a professional pass-time. 

Anyone following the peripheries of the game will understand that the model remains an unprofitable one. When Worcester Warriors (September 2022), London Wasps (October 2022) and London Irish (June 2023) all pulled the plug, players and fan groups alike were left without a leg to stand on, or indeed, cold plastic seats to sit on. 

London Wasps, in their pomp, were twice European Champions, six-time English Champions and three-time Anglo-Welsh Cup winners. They also won the European Rugby Challenge Cup in 2003 – all under Lawrence Dallaglio’s leadership. They were the Manchester United of rugby union. The side’s sting – and with it English rugby union’s beating heart – is now absent from the club game. 

Rugby union’s financial cavity was deepened by the liquidation of Jersey Reds in September 2023. Last season, the Reds held off Ealing Trailfinders to top the Championship and become a standard-bearer for rugby’s second tier. It represented the product of a season-long slog and a decade of steady progress on the island. But with it arrived disappointment. Jersey were ineligible for promotion due to the Prem’s minimum standards criteria, all but ring-fencing the top-flight. 

 

 

Jersey Reds players walk through the tunnel one last time after beating Bath at the Rec.

 

The club’s penultimate result was a 34-10 romping of Premiership stalwarts Bath. Yet, within the space of a week, the table-toppers were reduced to a grasp of thin air. Their pitch overgrown. St. Peter Stadium left to linger like a bad smell. 

The Chairman of Championship Rugby, Simon Halliday, wrote an open letter to the Rugby Football Union in the immediate aftermath. With the dust still settling, his words rightly referred to Jersey’s situation as a “tragedy” and a “disaster”. 

The collapse of the second-tier champions can’t have been helped by the RFU’s decision to slash central funding for Championship clubs by 50 per cent following the pandemic in 2020. And with relegation from the top-flight all but suspended, life still remains difficult for clubs battling for parity in the Champ.

Halliday said: “Anyone who loves rugby should listen very carefully to the message being sent by the investors in Jersey. If the governing body won’t commit to you, why should we?”

Within hours, Jersey players were being offered to other professional teams, in scenes unfortunately reminiscent of those at Worcester Warriors, Wasps and London Irish.

Reds Director of Rugby, Harvey Biljon also sounded his voice on the club’s demise, and the former scrum-half offered a more direct approach. “Over the past few years, everything that could possibly be taken away from us has been. We’ve gone about everything the right way. One of the RFU's core values is respect. Can I ask for some back?”

While England’s rugby clubs have big questions to face about their commercial viability, across the Channel – where rugby’s biggest market, the southern half of France, is well-routed – clubs have been able to open their wallets more and more aggressively and remain sustainable. Profitable even.  

To get a better understanding of the financial viability of the game, Pitch spoke to Saracens CEO, Neil Golding. He said, “The Premiership has never been able to compete with the wealthiest top 14 clubs. And most Championship sides have not been able to compete when promoted to the Prem.” A lawyer in his day job, Golding is calling from Bordeaux where Saracens face Bègles in two days – a game the English Champions would lose by 40 points.

Even as the Premiership’s most established side, Saracens have recently proved vulnerable to a thieving of their crown jewels. Their captain, Owen Farrell – previously a one-club man for his 15-year career – has been snatched from under their nose by their younger, trendier, and all-together better-looking French cousin, Racing 92. 

Toulon have also signed his former England teammate, and star of Amazon Prime’s ‘Mud Sweat and Tears’, Lewis Ludlam – offering a further glimpse into the direction of wind blowing the oval-ball over the water. Ludlam’s ex-Saints team-mate David Ribbans is already with Toulon, while former Harlequins centre Joe Marchant has joined Stade Francais, Jack Willis is at Toulouse, Jack Nowell at La Rochelle, Sam Simmonds at Montpellier with his brother Joe at Paloise, and Henry Arundell waits for Farrell in Paris' western suburbs.

Relatively new to the scene after joining Saracens in 2019, Golding understands it’s “a very appealing prospect for young English lads to go and experience the culture across there. But what the media paints as a case of them paying more cash is simply not true. 

“As I understand it, French clubs receive more support from their local governments. The average spend on salaries in France is around £9.2 million all in. It’s around £8.1 million in England with excluded players, should clubs wish to fork out that much. The tax treatment for rugby players in France is what’s most favourable – it’s the same in Ireland.

“It’s no secret that English rugby has had its financial difficulties with the four clubs going bust. For us Premiership clubs, it’d be tremendous if we get to break even. But that doesn’t happen very often. Clubs are reliant on their shareholders and owners, and pumping money in year after year is becoming an increasingly unattractive prospect.

“The pandemic was a testing point for all clubs. None more so than Saracens as we found ourselves battling it out in the Championship (after breaching salary cap regulations in 2020). It was horrible, no one even knew if there was going to be a league for us to get promoted out of. Then our first game was against Cornwall, and we lost. If we lost another game we would have been screwed.”

Golding references Exeter Chiefs as one of the most profitable pre-pandemic Premiership clubs, due in part to their conferencing and events business, alongside capacity crowds, and a league-leading academy system that produces a conveyor belt of talent at Sandy Park. 

Even so, Exeter Rugby Group, which runs the Chiefs, made a pre-tax loss of more than £4.5 million in the year to June 30, 2023. And during the 2022/23 season, the Chiefs managed just seventh in the Premiership, their saving grace being a semi-final in the European Champions Cup. 

The group’s wage bill had increased by £1.76 million (to £14.1m), catalysing a forced exodus of several high-profile senior starts. Lions players Stuart Hogg, Luke Cowan-Dickie, plus Sam Simmonds and Jack Nowell all left at the end of the year to balance the books. 

With even the Chiefs restructuring financially, other clubs are left playing catch up. Sitting at the top of the league for highest debtors, as of June 2022, are Bristol who owe £51.2 million. Followed by Saracens owing £40.8 million and Bath, £37.8 million. While Newcastle, Harlequins, Sale, Leicester, Northampton, and Gloucester all sit in the same ballpark, owing around £30 million each. With Exeter bringing up the rear as the ‘most profitable’ side, the Chiefs have total borrowings of £13 million.

To provide some context, this is chump change for the Premier League. Manchester United owe more than £1 billion through a combination of gross debt, borrowing and outstanding transfer payments. The club do, however, expect revenues between £650 million and £680 million for the upcoming fiscal year. This is a down-sight more than the pre-tax loss every Premiership side suffered last year.

The nine-figure amount of net debt across the Premiership can largely be put down to government loans, a result of the Winter Survival package that helped clubs emerge from the other side of the pandemic. A substantial majority of the remaining debt is owed to their sugar daddy investors. Debt which, in reality, will never be paid off. The question surrounding those clubs, therefore, is what happens if said cash splashers decide they want to clock off.

Taking Bristol as the most remarkable example, their business model is sustained by Steve Lansdown continually putting his hands in his pockets. The business has lost £30 million over the last five years, and still, the 71-year-old remains resolute in funding it. 

Of the three Premiership clubs that went under, the writing was more firmly on the wall. London Irish rarely filled half of the Gtec Community Stadium (home of Brentford F.C), they had never made a profit, and with the league’s lowest turnovers compounding the club’s £30 million borrowings that was all she wrote. 

As for ‘London’ Wasps, they consistently had the highest wage bill in the league, and their 80-mile move up the M1 to Coventry in 2014 effectively told fans they don’t matter. That showed, with the Building Society Arena only being 30.32 per cent full on average in their final season. Wasps going under was a matter of natural selection more than anything else. 

However you look at the numbers, it has been a turbulent few years for the rugby pyramid which, with Doncaster Knights (sitting fifth at the time of writing) the only team in the Championship eligible for promotion, is starting to look more like a square. 

 

 

A full house at Castle Park welcomes Bristol Bears to 'sunny Doncaster'.

 

Talk to people in the second tier and frustration and defiance are present in equal measure. Mark Lavery, Director of Rugby for seventh-placed Ampthill, believes: “We’ve taken all the money out of the foundations, put it into the roof and now we’re wondering why the foundations are shaking.”

Not far away in Bedford, the nation’s longest-serving Director of Rugby, Mike Rayer, also feels “no one has grasped the Championship since before Covid. It’s just been left in the corner to fight for itself.”

The Championship has already rejected the idea of a ‘Premiership 2’ franchise league, which the RFU proposed would welcome a new eight-year Professional Game Partnership agreement. Teams then objected to Wasps and Irish being parachuted back into the reshaped second tier, before opposing the proposed ring-fenced 10-team Premiership.

Instead, the 11 clubs want the RFU to engage in fresh negotiations. It inevitably means uncertainty will rumble on like a defenceless maul. “Premiership 2 indicates an umbilical cord which isn’t there because they’ve done a private transaction we’re not involved in,” said Simon Halliday. “We’ve been told countless times ‘We haven’t got any money’. Let’s rephrase that. They don’t want to allocate it to us.”

All this is in stark contrast to France where ProD2, the league below the Top 14, goes from strength to strength. Municipally owned stadiums, a captive audience, and lucrative television deals are the key factors Saracen’s CEO Neil Golding believes to be most significant.

“Obviously in England there is a tradition of teams coming up through the ranks but I’m not sure this culture of promotion and relegation is best for rugby right now,” said the award-winning multi-facet financial services provider. “Look at US Sports. There’s no pyramid but they’re still hugely entertaining games. And rock-star businesses. 

“Rugby is tricky. Maybe if all the clubs were doing well financially, and there was a solid second division, it would be easier to organise. The fact of the matter is that clubs don’t break even and are having to take out loans from the government and rely on pay packets from owners to survive. Forget rugby, it just makes no sense.”

“It’s incredibly sad that we lost those three Premiership clubs. But looking at it from a selfish perspective, the big advantage is that you don’t have any clash with the Six Nations. My overall view is that the quality of the product is improved this season. If you look around, the 10 clubs that remain are playing some fantastic rugby. There are international players everywhere you look. And some of the World’s best talent is playing in England.”

There is no better example of the Premiership’s revival than the excitable 76,813 that filled Twickenham to watch then-sixth-placed Harlequins face a struggling Gloucester side. A masterclass in entertainment that saw 58 points scored at HQ the night before New Year’s Eve. “The nip and tuck nature of this game proves that anyone can beat anyone in the top-flight this season,” says Golding. The Marcus Smith effect also helps.

Bath’s Finn Russell too, the mercurial Scotsman turns up at the Rec each week for a reported £750,000 per year. Not to mention World Cup-winning-Springbok, Andre Pollard, spending his winter in Leicester, holding the keys to 40,000 hearts at Welford Road. 

 

 

A full house in Bath watch mercurial Scot Finn Russell put on a show in the late afternoon sun. 

 

When England Head Coach Steve Borthwick said rugby had “turned a corner” ahead of this year’s Six Nations, it may not have struck as much of a Red Rose-tinted assessment of the landscape as some might think.

Borthwick’s suggestion was that, with his new skipper Jamie George committing his long-term future to Saracens, the exodus of England internationals to France was drying up. “We are seeing fantastic attendances and atmospheres in grounds. We are seeing competitive English sides in Europe. We are witnessing the nature of Premiership rugby, look how many strong teams there are now. Every game matters. That’s what happens at Test level. You must be at your best every game. And the players are delivering just that.”

And could it be, despite English rugby’s current off-field arguments and the rising expectations across the Channel, that they’ve got proof sooner than anticipated? Six of eight Premiership clubs qualified for the last 16 of the Champions Cup – rugby’s Champions League – with Harlequins, Exeter, Bath, Leicester, Saracens, and Northampton all making it out the Pools. 

England’s former head coach Stuart Lancaster, now in charge of Racing 92, is among those who sense an English renaissance. “The Premiership has improved this season with the talent pool being so condensed,” he said.

Rugby union is rare among global team sports in the way the international game has dominated for so long. 

“The Six Nations is really the only annual international team sport event of any significance and history in the world,” says Golding again. “It wields a disproportionate influence over its domestic counterpart. Part of the challenge for the clubs is to identify the missing seven million people. Ten million go to watch England play and just three million watch club rugby.”

The simple answer would be that they’re watching football. The Premier League had eight million tune into Sky Sports’ opening weekend in August 2023. And that’s not including the 15 million that make their way into stadiums up and down the country across the course of a season. 

If driving more viewers through the posts is any measure of newfound success, the Six Nations’ new ‘Full Contact’ documentary was among the top three programmes viewed in the UK upon its release in January. From Box to Box, the creators of the inherently combustible ‘Drive to Survive’, it is the latest sports docu-series to (attempt to) attract a swathe of new fans to the sport. 

Crucially, Drive to Survive has conquered a market sector that rugby union is in dire need of tapping into. Eighteen to 29-year-olds make up 31 per cent of the documentary’s viewership. In a recent EY audit, rugby union was marked outside the top 10 sports for engagement among Gen Z in the UK (egg-chasing did, however, rank in the top five sports for engagement among adults).

In Full Contact’s cauliflower-eared approach to the physical side of the game there lies an opportunity for rugby union. Let it be what it is. A condensed, high-octane, high-skilled, and thick-necked showcase of England’s best talents. 

Now with the number of professional clubs already reduced by four, the top two professional leagues should reflect that. Looking towards successful codes, NFL or otherwise, fewer games equal more action and higher stakes. If rugby’s sugar daddy owners want a fresh pair of shiny heels (new players) then so be it, let them find the sharpest stilettos on offer and stick a pink bow on them for good measure. It ain’t all bad. 

It mightn’t be very English. And it certainly goes against every amateur fibre in rugby union’s creaking body. But in stumbling across a 10-team Premiership, the RFU may well have fallen on its best answer. 

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