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.
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Edited 1 time(s). Last edit at 2018:07:08:06:47:57 by CoochieCoo.
Not really clear what Exeter are doing some much righter. Just keeping wages down and being successful.
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!
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.
RAEBURN SHIELD
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.
"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’."
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.