Premiership Rugby Finances


Bruce Craig juggling
By CoochieCoo
June 20 2018

There is much discussion of the state of premiership rugby finance. Here is a table of the premiership clubs accounts made up to 30th June 2017. The salary cap was £6.5m in that period.

Club Turnover Profit Wages Players and team management Sales and Admin Net Equity EBITDA Notes
  £'000s £'000s £'000s     £'000s    
Wasps 33,402 3,809 17,050 53 153 13,648 218 Team management in sales and admin
Harlequins 20,657 6,529 12,608   286 8,370 4,228 Not disclosed Players/Others
Leicester 19,733 826 12,151 103 78 36,804 451  
Bath 18,576 2,502 11,239 80 66 12,972 881  
Saracens 17,755 2,686 11,441 100 55 45,105 2,415  
Exeter 17,409 1,144 9,610 91 238 10,443 2,914  
Northampton 16,741 981 10,697 92 180 19,797 194  
Gloucester 16,311 1,109 10,694 70 249 7,421 579 Team management in sales and admin
Newcastle 9,661 3,164 7,871 107 448 18,562 2,616 441 bar and catering staff!
Sale 8,325 818 6,453 71 16 4,993 797  
London Irish 6,829 2,924 6,210 72 17 7,341 2,401  
                       
  185,399 24,204 116,024 839 1786            

The disturbing number is that the Clubs collectively lost £24.2m in 2016/17 and only one Club, Exeter, is in profit. Two clubs were under the salary cap, Sale and Irish, and it is assumed that all the others spent up to the cap. Four clubs are technically insolvent, Saracens, Newcastle, Wasps and Bath and are reliant on their owner/shareholders for continual support.

Many investment analysts use the EBITDA figure to see whether a company is generating cash from their operations. This does show three clubs with positive figures Exeter, Leicester and Wasps.  We are in the category of not so bad but the Quins figure is worrying as is Newcastle, Saracens and Irish.

Staff nos were difficult to glean as clubs are not consistent in their disclosure. Quins do not split their staff nos between players and admin. The Newcastle other figure is extraordinarily high and could only mean this is the count of part time staff. It would have been useful if all clubs disclosed their nos on a FTE basis.

The table is ordered on a Turnover basis and Wasps have by far the highest because of their revenue from other events. Their accounts show that this contributes £17,222k so over half their turnover. Non Rugby Turnover that has been disclosed in the accounts is as follows:

Wasps £17,222k
Quins £8,052k
Leicester £8,823k
Bath £0
Saracens £5,292k
Exeter £1,534k
Northampton £7,568k
Gloucester £2,638k
Newcastle £2,682k
Sale £0
Irish £0

The fact that Exeter makes a profit with the lowest non rugby income of the clubs who disclose this figure, shows a good use of their facilities that allow them to make an overall profit. Bath, Sale and Irish do not have or do not disclose non rugby income and hopefully this will change for Bath with the stadium development.

 

pqs: qs:
Premiership Rugby Finances
Posted by: Comeonmylovers.co.uk (IP Logged)
Date: 25/06/2018 15:46

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Edited 1 time(s). Last edit at 2018:07:08:05:47:57 by CoochieCoo.

Re: Premiership Rugby Finances
Posted by: DanWiley (IP Logged)
Date: 25/06/2018 16:00

Very interesting

In case anyone else finds it difficult to read the table at the top, here's my attempted to clear it up:

[ibb.co]

Re: Premiership Rugby Finances
Posted by: DanWiley (IP Logged)
Date: 25/06/2018 16:05

I may not have aligned things correctly.

Not really clear what Exeter are doing some much righter. Just keeping wages down and being successful.

Re: Premiership Rugby Finances
Posted by: CoochieCoo (IP Logged)
Date: 25/06/2018 16:16

The layout is ok on the mobile version. At least it was ok on my iPad. The desk top version is not good but if you go to the bottom of the article and click the printer friendly version it opens in a new window and is OK to read.

http://zdgzqa.bay.livefilestore.com/y1p7Mwi7pLXeM89TY2KFdDQ-UUDGSv1FKNdhYdrW-koAuRN3tsqCPfE3onFxuO-3cZ0057Tom1uJai3vjkz3dvY_Q/1998%20Euro%20Champs.jpg http://zdgzqa.bay.livefilestore.com/y1pFul9UAV5zEXOzeRc1kmmlgDKXTYTIlTnGoQzYelH6KzdCeU-exN0IGo74QN2OGvlSoEiVjzAESvHx9BFlBsNFA/Bath%202008.jpg

Re: Premiership Rugby Finances
Posted by: Bath Supporter Jack (IP Logged)
Date: 25/06/2018 17:03

As Mr Wiley says very interesting........and very thorough which his exactly what I would expect from Mr CC!

A few stand out points;

1. Given there were five Exeter players in the England 23 for the latest Test against SA I can see some tension in the next salary negotiations. Big question are Exeter paying up to the salary cap at the moment?

2. We have heard a lot from Mr Rowe in the past about the extra non rugby earnings from their facility at Sandy Park but as you point out Mr CC at £1.5m they are in fact pretty low and are only 9% of total revenue. However if it was a quasi rental and everything is outsourced then their profit is created by the external sales.

3. This situation is not going to last indefinitely and the Clubs are going to have to move, quickly to a more sustainable model.

4. Very large difference in playing and team management ranging from 107 - Newcastle to Wasps - 53. Can't be comparing apples and apples here. It looks like 70 - 90 is the range.

5. As you pick up on the EBITDA number Bath's accelerated depreciation of temporary West Stand does distort the numbers. I suspect that Bath is well on track to be sustainable, ie breakeven in 2 - 3 years.

6. Very surprised that Bath has such a relatively high turnover putting it in fourth place. I suppose the Clash is responsible for a chunk of that even though it does not......I imagine make a massive contribution.

7. No wonder Mr Wray wants someone to give him a hand!

Re: Premiership Rugby Finances
Posted by: Which Tyler (IP Logged)
Date: 25/06/2018 17:55

FTR, and IIRC, 4 clubs there made a loss of less than the salary cap increased for that year (Glos, Saints, Tigers, Sale; with a £1.5M increase).
I've said it score, and no doubt will again, we saw a 50% increase in the cap over a 2(?) year period; that was way too quick, and will inevitably have pushed a few of the more-or-less breakdown clubs well into the red, which will take a good few years to recover.

We need a cap freeze, and for a decent time frame, to let the income catch up with the new expenditure.

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Re: Premiership Rugby Finances
Posted by: hasta (IP Logged)
Date: 25/06/2018 18:43

Quins! Jesus that looks bad.

Re: Premiership Rugby Finances
Posted by: St tub (IP Logged)
Date: 26/06/2018 10:30

Saints had to fork out for a fair bit of severance in all that lot.. I think you can differentiate between normal and one off's in the cash flow (coaches) and payments to outgoing directors

Re: Premiership Rugby Finances
Posted by: Poking With Sticks (IP Logged)
Date: 26/06/2018 12:47

Quote:
Bath Supporter Jack
1. Given there were five Exeter players in the England 23 for the latest Test against SA I can see some tension in the next salary negotiations. Big question are Exeter paying up to the salary cap at the moment?

Yes, they are.

Quote:
2. We have heard a lot from Mr Rowe in the past about the extra non rugby earnings from their facility at Sandy Park but as you point out Mr CC at £1.5m they are in fact pretty low and are only 9% of total revenue. However if it was a quasi rental and everything is outsourced then their profit is created by the external sales.

I think it might just be a difference in the way it's being reported. As I understand it any monies taken on a matchday are deemed 'rugby income' and any taken on other days are 'non-rugby income'. For comparison that would mean that if there was a casino, like at the Ricoh, that would be 'rugby income' on a matchday.

Re: Premiership Rugby Finances
Posted by: BathMatt53 (IP Logged)
Date: 26/06/2018 18:20

£6m according to Rowe

[www.google.co.uk]

Re: Premiership Rugby Finances
Posted by: DanWiley (IP Logged)
Date: 26/06/2018 18:39

Doesn't that suggest he's really bad at estimating?

Re: Premiership Rugby Finances
Posted by: BathMatt53 (IP Logged)
Date: 26/06/2018 18:51

He is a very successful business man, so I doubt it.

Re: Premiership Rugby Finances
Posted by: DanWiley (IP Logged)
Date: 26/06/2018 19:34

"He estimated ‘at least £6 million’ of their £16m income for the financial year ended June 30, 2016 was generated by the complex."

"The Chiefs’ financial accounts for the year ended June 30, 2016 showed total that total revenue was £16,988,853.

That was broken down into £15,427,210 in ‘rugby income’ and £1,561,643 in ‘Sandy Park income’."

Re: Premiership Rugby Finances
Posted by: BathMatt53 (IP Logged)
Date: 26/06/2018 19:44

Yes I did read it before I posted it!

You omitted the point of the article which was that (in the view of Tony Rowe, who knows a thing or two about it) the figure didn’t reflect the actual breakdown? This backs up exactly what PWS says above, that the accounting doesn’t reflect the full picture.

Re: Premiership Rugby Finances
Posted by: DanWiley (IP Logged)
Date: 26/06/2018 19:46

I'd say that's a fairly big discrepancy and I'm inclined to go with their accounts rather than their owners spin.

Re: Premiership Rugby Finances
Posted by: Poking With Sticks (IP Logged)
Date: 27/06/2018 07:18

I'm not clear what purpose that spin would serve under the circumstances?

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