13 October 2022

Rugby pays for reluctance to address football dominance, suggests finance expert

13 October 2022

Rugby union’s reluctance to address football’s commercial dominance has contributed to the crises which have engulfed Premiership clubs Wasps and Worcester, according to a sports finance expert.

Both teams have been suspended from the Gallagher Premiership, with Wasps having earlier withdrawn from this weekend’s match against Exeter and announcing it was “likely” they would enter administration.

Kieran Maguire, a lecturer from the University of Liverpool Management School, believes the sport has been slow to act to address the issues it faces.

I think there will always be a rugby, but in terms of the level of expenditure I’m not convinced that it can go on as it has done historically.

“Rugby is still a relatively new professional sport and in many aspects it’s being run in an amateur way in terms of cash flow and cost control and governance, all the dull words that get accountants excited,” he told the PA news agency.

“I know rugby fans would be upset about rugby being called a minority sport, but football is too successful. It takes too many of the column inches and too much of the broadcasters’ focus, because it delivers in terms of eyeballs.

“That’s a challenge – how does rugby increase its income streams and control costs? I think there’s a reluctance to address that.

“So trying to find a solution is genuinely challenging. I think there will always be a rugby, but in terms of the level of expenditure I’m not convinced that it can go on as it has done historically.”

Worcester have been suspended from Premiership action for the rest of this season, with relegation to follow, after the club’s partial liquidation.

Wasps Holdings Limited recently confirmed a second notice of intention to appoint administrators had been filed, revealing talks were at “a relatively advanced stage” with possible investors, in the face of a winding-up order from HM Revenue and Customs for £2million in unpaid tax.

Mike Ashley, the former owner of Newcastle United Football Club, is understood to be one of those interested parties.

Wasps also face having to repay a £35million bond which had helped finance the club’s relocation to Coventry during 2014.

Maguire said Premiership clubs had treated the Rugby Football Union “like the bank of Mum and Dad” in the past, but were finding that income squeezed as the governing body’s profits from flagship events like the Six Nations had plummeted amid the Covid-19 pandemic.

“There’s an element of wishful thinking when the clubs project their future financial position,” he added.

“And then that doesn’t materialise and leaves a gap. It doesn’t seem to have a sustainable outlook in respect to many clubs because the ambition is to win things and to be successful, and that costs money.”

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