The Super League has retained its number of clubs while Premiership sides have been wound up – Michael Steele/Getty Images
One wonders if the law firm that has been commissioned to review the Rugby Football Union’s controversial bonus payments will have time to read through the Rugby Football League’s latest annual report.
Some might argue that to do so would be comparing apples with pears, claiming that rugby league’s heyday in terms of national prominence and financial strength was in the 1990s and early 2000s.
But one thing is certain. Rugby league has been a professional game much longer than union and is arguably 30 years ahead in coping with the financial challenges that are now catching up with rugby union.
Rugby union may have won the financial war in the short and medium-term, through the financial strength of its international game in comparison to league, but there is a growing sense of alarm that rugby union can simply not continue to live beyond its means.
Its administrators are desperately looking to the United States or the Middle East for financial salvation, while a small group of investors more radically see the answer as creating a new world order with a breakaway global league.
Brett Robinson, the newly elected chairman of World Rugby, used his first speech to highlight rugby union’s financial woes, having seen his own union, Rugby Australia, lurch from one financial crisis to the next in recent years.
“There is a really massive issue and that’s dealing with the creaking of our unions,” he said. “It’s the cost of our players that is really putting pressure on our cost bases. We’ve got to get real serious about that.”
Robinson may also wonder if the game can also afford the cost of its administrators.
Power-brokers envy Super League’s broadcast deal
Back in 2002 the Rugby Football League brought in a salary cap of £1.8 million, on top of previous financial restrictions of having squads limited to 20 players who were paid more than £20,000, which was known as the 20/20 rule. It was seen as a controversial move at the time, given that Super League players were increasingly becoming targets for the new-found wealth in rugby union.
Yet almost 25 years later, Super League still features 12 clubs (unlike the Premiership, which has dropped to 10) and has a broadcast mix that is the envy of rugby union, in part because of a 12-year strategic partnership with international sports agency IMG, which was signed at the start of last year and led to the creation of RL Commercial, a joint-venture with the RFL.
When Wigan Warriors defeated Australia’s Penrith Panthers in the World Club Challenge to become the sport’s de-facto world champions for a record-equalling fifth time in February, in front of a 23,500 sell-out crowd, it was broadcast live in the UK on the BBC, as well as on Sky Sports and the new SuperLeague+ platform, which broadcasts internationally.
This year the competition attracted a total of 1,493,753 supporters across 162 matches, an average of 9,221 spectators per game.
In comparison, the 2023-24 Premiership, reduced to 10 teams following the liquidation of Wasps, Worcester and London Irish, had a total attendance of 1,428,276 for their total of 93 matches, an average of 15,358 per match.
The stark difference comes when the salaries of the two leagues are compared. A leading rugby agent who has operated in both codes for more than 20 years estimated that the mean average salary of the top 20 players in Super League would be around £75,000, with highest earners reaching the £350,000 to £400,000 mark.
Premiership Rugby’s latest salary cap report, for the 2022-23 season, reported that the average payment to fly-halves was £217,761, while the average salary of a “marquee” player excluded from the cap was £510,005.
But what about the two codes’ respective governing bodies?
The RFU has said the legal review of the long-term incentive plan (LTIP) bonuses will look at “the provenance, design, implementation and communication” of the scheme that was introduced in 2021 to recognise the material and voluntary reduction in remuneration during the pandemic and to incentivise the executive team to deliver against multi-year targets.
It is not clear if that includes benchmarking the extent of the largesse against other national governing bodies. But the contrast with the Rugby Football League is certainly eye-opening.
The RFU executive explained their record deficit of £37.9 million on the basis that last year was a World Cup year, when the cost of playing in the tournament coincided with losing the lucrative autumn Test matches.
It is said that they came under “planned for” losses, although that does not explain the need to have made 42 redundancies in September and to have left staff facing effective pay cuts this year with the removal of “event-day allowances”. The latest annual report also says the governing body is facing an “underlying ongoing operating deficit challenge”.
The RFL’s report shows they also posted a deficit that “predominately related to write-offs and unplanned costs of wrapping up of the Rugby League World Cup 2021, which was held in autumn 2022”.
The difference? The RFL’s “group loss” was a total of £53,000 (with a positive cash balance of almost £6 million).
At this point, the RFU executives will no doubt point to the difference in the respective turnovers of the two governing bodies. The RFL’s turnover for 2023 was £15.03 million, down from a record high of £42.15 million the previous year, when England hosted the World Cup. In contrast, the RFU turnover was £175.2 million in 2023-24, down from £221.4 million the previous year.
But what about the contrast in executive remuneration? The RFL annual report states “group staff costs” reduced significantly from £7.66 million in 2022 to £4.77 million in 2023.
Sweeney package dwarfs entire cost of RFL directors
The RFU’s annual report declares total compensation paid to “key management personnel” rose from £2.8 million last year to £4.9 million. The increase is partly down to “the payout of the Long-Term Incentive Plan which accounts for £1.3 million and the increase in executive directors”.
That means the entire staff costs of the RFL was less than what the RFU paid its executive team made up of the chief executive Bill Sweeney and five directors.
And what of the RFL’s directors’ remuneration? It was reduced from £686,000 in 2022 to £287,000 in 2023. “It should be noted that, in 2022, this total included a provision of £245,000 for the compensation for loss of office for the former chief executive officer and chief regulatory officer,” states the RFL report.
That means the LTIP bonus of £358,000 which Sweeney received (taking his total package to £1.1 million) alone would have more than covered the costs of the entire RFL directors team in 2023.
Thirty years ago, rugby union clamoured to mimic rugby league’s superior professionalism in training, ball skills and defensive organisation on the pitch. Perhaps it is time to now learn a few lessons in the boardroom too, before it is too late. Rugby league may be a much smaller sport, but at least it is living within its means.
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The post Snigger all you like but rugby union can learn plenty from rugby league first appeared on Rugby 247.
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Author : rugby-247
Publish date : 2024-12-23 23:03:55
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