Why English Rugby is Unsustainable

The problems with England’s elite game and what needs to be done.

The Ancient Greek myth of Icarus highlights the dangers of extreme hubris and arrogance. It features a young and foolish boy who begins the story as a proud and virtuous man but is corrupted when handed excessive power.

Icarus is overcome and giddy with excitement when his father gifts him wings with which to fly. His father gives him a single stern warning, do not fly too close to the sun, else you will lose it all. Nonetheless, overwhelmed with eagerness and complacency, Icarus disobeys and flies as high as he possibly can, too close to the sun, his wings set on fire, and he is killed.

In a funny way, English rugby is not unlike the mythical Icarus, handed the freedom and opportunity of professionalism, it has failed to acknowledge the obvious and ominous signs of its trajectory and finds itself dangerously close to the sun’s orbit – on the brink of oblivion.

English rugby is a baby when compared to its sporting rivals. Football became professional in 1885, 138 years ago, cricket in the 1960s, around 60 years ago, while rugby has had a measly 28 years of professionalism. If the life span of professional football was the average human life of 80 years, then rugby would be a spotty, confused 16-year-old, adapting to its new voice and sudden fondness for girls.

As put by MP for Ashford Damian Green in the DCMS report on English rugby union: “Is it possible that the attempt to turn club rugby into a professional game in this country ran before it could walk? Things got too ambitious, and people have spent too much money. Are we trying to support an infrastructure that there just isn’t enough demand for, that there is not enough TV revenue, not enough gate revenue, not enough of all the ancillary revenues to support the kind of institutions we have set up?”

This year, two Premiership clubs, Worcester Warriors and Wasps, have already been forced into administration and the rest are barely afloat, as shown through their annual reports. Most surviving solely on revenue streams from the international game and from their owners plunging excessive funds into the clubs, forcing them further and further into debt.

The team crowned English champions a matter of months ago, Leicester Tigers, required a bailout payment from shareholders of £13m to avoid the possibility of urgent alternate funding or administration. With Tigers consistently one of the league-leaders in attendance, and therefore gate revenue, this news spelled grim and ominous reading for fans of all clubs.

A brief look at the Companies House documents for the eleven remaining Premiership shows the daunting severity of the situation. Clubs such as Saracens and Harlequins have made respectable turnover, £21m and £27m respectively, but only three teams in the last two seasons have reported a post-tax profit or broken even and Saracens and Exeter losing over £5m each in 2021 is clearly an unsustainable business model.

Club:	Financial Loss/Profit 2022 (after tax)	Financial Loss/profit 2021 (after tax)	Turnover	Wage Expenditure
Bath	-£0.1m	-£0.3m	£19.8m	£10.6m
Bristol	-£3.3m	-£3.5m	£14.2m	£9.9m
Exeter	-£1.2m	-£6.3m	£20.2m	£12.1m
Gloucester	-£0.6m	+£0.1m	£17m	£10.5m
Harlequins	-£1.5m	+£0.5m	£27m	£12.3m
Northampton	-£0.1m	-£0.3m	£20.8m	£10.7m
Newcastle	N/A	+£3.5m	£8.9m*	£7.4m*
London Irish	N/A	-£3.9m	£8.6m*	£8.4m*
Sale	-£3.3m	-£1.5m	£12.2m	£9.6m
Saracens	-£4.9m	-£5.3m	£21.4m	£12.6m

If the financial fragility of the current Premiership clubs isn’t ominous enough, the fact that over 25% (4/14) of clubs that have been in the Premiership in the last 15 years have gone into administration, and not returned, should bring home the gravity of this desperate situation.

Club	Years in Premiership	Where are they now?
Bristol Bears	2008-2009, 2017, 2019-2023	Current Premiership club
Bath	2008-2023	Current Premiership club
Exeter Chiefs	2011-2023	Current Premiership club
Gloucester	2008-2023	Current Premiership Club
Harlequins	2008-2023	Current Premiership club
Newcastle Falcons	2008-2012, 2014-2019, 2021-2023	Current Premiership club
Leicester Tigers	2008-2023	Current Premiership club
Leeds Carnegie	2008, 2010-2011	Went bust, Tier 3
London Irish	2008-2016, 2018, 2020-2023	Current Premiership club
London Welsh	2013, 2015	Went bust, Tier 5
London Wasps	2008-2022	Went bust, Tier 2
Sale Sharks	2008-2023	Current Premiership club
Saracens	2008-2020, 2022-2023	Current Premiership club
Worcester Warriors	2008-2010, 2012-2014, 2016-2022	Went bust, future unknown

Published PhD researcher and senior lecturer in Sport’s Business, Andy Golding, wrote a report on the business sustainability of professional Rugby Union in which he stated: “Professional rugby seems unable to grasp the basis of any business, which is to generate revenues to cover costs, not to build a cost base and then try to generate revenues to cover them”.

Asked to elaborate this point, Andy highlights the lack of direction of Premiership owners to create revenue streams before budgeting large, professional scale projects.

“A lot of people approach owning a rugby club as philanthropic exercise and it seems that any principles of business that would apply outside the ecosphere of professional rugby get thrown out the window.

“Things like ground-shares, sharing a ground with another club, are not profitable, you have to own your stadium to be profitable because you can make money hosting hospitality and networking events.

“It is a simple principle of business that you have to have the money coming in to cover costs, which doesn’t apply in rugby.”

The other main issue Andy highlights is the lack of alignment between Premiership clubs and between the clubs, and PRL, and the RFU. On this point, Andy celebrates plans for an English independent framework, similar to the Ligue Nationale de Rugby in France, but insists more has to be done.

“Owners in the Premiership have differing objectives, say one club wants to avoid relegation and one wants to finish in top four, those objectives show in their ownership models.

“The RFU governs the amateur game and operates from an amateur ethos while PRL operates from a professional business ethos and often the objectives aren’t the same. There is constant conflict between club and country, and they don’t share the same objectives.

“You need an independent framework which checks and balances both bodies and ensures sustainability.

“There is little proactive thought, much of what is done is reactive, but as we have seen it may be too late.”

Kieran Maguire, an expert in football finances and author of the book, ‘The Price of Football’, helped compare the billion-pound money churner which is association football, with the wilting debt-machine which is English rugby.

“What rugby has, is a growing cost base, but limits in increasing its scope in the three pillars of revenue, ticket sales, broadcast deals and commercial partners.

“The inability to control costs is the challenge for the game. Especially for a game which is struggling for column inches at the club level.

“The Premier League is watched by 188 nations around the world, it is global; how many different nations watch Gallagher Premiership rugby? A handful?

“If I am a ultra-net worth individual and I want people around the world to know who I am, I will buy a Premier League club; look at Newcastle United, their new owners exchanged a relatively low amount of money for them, for a huge amount of attention.

“Rugby doesn’t have that recognition, that kudos.

“There needs to be a culture change. It only takes a few owners who think they can buy their way to success, to set about an ‘arms race’.

“Once they start spending more than they have then other clubs will be forced to do the same or risk losing all their players.

“Some owners can afford for their clubs to lose a lot of money and some can’t, which creates tension in the sport. Unless the owners vote collectively for draconian cost-cutting processes, I don’t see things changing.”

So before English clubs race for the next Kiwi or Saffa import, eyes glazed over with greed and gagging to exchange hundred-pound notes for a brief taste of glory. And before the RFU announce their next million-pound profit turnover while another club slips into the abyss and the Championship rots in the limbo of semi-professionalism.

They should remember the cautionary tale of Icarus. The man who was overambitious and greedy. The man who was given everything he could have ever wanted and lost it all.