With the Lions currently touring Australia and celebrating 125 years of being in existence it is a good time to reflect on the health of British & Irish Rugby. Certainly the up and coming tests in Australia will serve as a good barometer of playing strength when the best in British & Irish Rugby stand against some of the best the Southern Hemisphere has to offer.
Off the field this year’s tour is set to be the most successful in the illustrious history of the Lions. Despite costs of £14m, it still promises to be the most profitable tour yet with revenues up 30% on the tour to South Africa in 2009. This is somewhat heartening given that when the sport went professional over a decade ago, the mere existence of the Lions was in severe doubt.
So what of the home unions and the clubs themselves?
Despite having fewer players on this tour than they have seen in a while, the sport of Rugby in England could be on the verge of an upturn in fortunes. An outlook that is not shared by the Celtic nations.
Starting with Wales who have the biggest contingent in the tour party, the WRU announced back in September 2012 its best ever financial results, with a turnover of over £63M and profit increased to £27m. This certainly built upon the on field success of the national side - reaching the semi-finals of the last World Cup and having won 4 six nations with 3 grand slams in the last 9 years.
Unfortunately the Welsh Regions of the Scarlet’s, Ospreys, Cardiff Blues and Newport Gwent Dragons are not fairing so well. On the field the regions have had success in the Pro 12, but very little in the Heineken Cup since Cardiff made the final in the first ever year of the competition way back in 1996.
Off the field matters are even worse. The recently commissioned report from Price Waterhouse Coopers by the WRU & regions stated: "The historical financial performance shows the four regional businesses are not sustainable on a standalone basis in their current form without continued additional funding from benefactors or alternative funding sources."
Nothing new there you may say. However the report went on to say that the funding gap rose from £2m in 2008, to £5.2m in 2011. This gap currently met by benefactors is seen as totally unsustainable. The projection for 2013 is a surplus of £0.5m which was largely budgeted due to the implementation of a salary cap of £3.5m. However, those close to the game feel that this is extremely optimistic.
The current standoff between the regions and the WRU over funding, management and control of the elite end of the game in Wales is of great concern. The deadlock centres on the formation of a Professional Regional Game Board and its running. One meeting took place in December, however since the deadlock, no more have happened.
The regions are struggling, and with Cardiff FC now joining Swansea FC in the Barclays Premiership and the success of Soccer right on their doorstep, the regions face some of the most testing times ever. They will need firm direction and action now or face the threat of extinction.
What of the other Celtic nations Ireland and Scotland.
In Ireland concerns are largely centred on the return of the on field success of recent times and the further development of their regions. This however against a back drop of not only the toughest recession the country as ever seen, but also an Irish Government initiative that could see all Rugby shown on terrestrial TV rather than pay for view. Projections show that this would wipe off some 12m Euros of revenue from the union - a 20% loss in revenue.
Scotland with only 3 players in the starting squad for the Lions is suffering from a current lack of success on the field from its national side and regions. The relatively new board and executive team at the SRU face a huge challenge as they try to deliver on their strategic vision published last year. This stated an aim of winning the world cup in 2015, further reducing their debts and increasing revenues, attendances and participation at all levels.
As for England, the financial landscape is good. Despite announcing losses of £6.3m in November of last year, the RFU still turns over £119m (the largest of any union in the world) and made profits in 2011 of £8.7m. These last results are reported as expected and the £76m upgrade of Twickenham has gone ahead. The RFU have the 2015 World Cup to look forward to which is a huge opportunity to not only maximise revenues but also grow the sport substantially.
Premiership Rugby is equally in good health with the recent renewal of the title sponsorship with Aviva. In 2010 the company paid £20m for a four year deal and this 3 year extension is understood to show a 20% increase. Premier Rugby’s lucrative £152 million four-year deal with BT Sport to show Aviva Premiership and European match’s, eclipses any previous such TV rights deal in Rugby Union.
This latter deal with BT Sport sent shock-waves through European rugby and caused a serious rift which has yet to be resolved. The English clubs will leave the European Rugby Cup (ERC) set-up at the end of the 2013 / 14 season. The English clubs are seeking an alliance with the French clubs, as well as the leverage of broadcasting games from that territory. This will severely increase the English clubs’ chances of initiating wide-spread changes throughout the sport in Europe and further increase their revenues.
So England may not have the Lion’s share of the starting team for the first test against Australia, but it would appear that they are about to enter a period of all round growth which their Celtic cousins can only look upon in envy.
Tony Copsey, Director Copsey Consultancy.
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