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Edited 2 time(s). Last edit at 2024:09:01:16:17:20 by CoochieCoo.

Wow, those numbers don't paint a pretty picture for any of the teams, but some of them are truly eye watering. Thanks CC, interesting stuff (but sort of wish I hadn't read it!).

[24/25 adoptee: Francois van Wyk]

Covid loan repayments are also scheduled to start this coming season!



Edited 1 time(s). Last edit at 2024:07:24:18:53:14 by tigersimon.

Quote:

BathMatt53
Wow, those numbers don't paint a pretty picture for any of the teams, but some of them are truly eye watering. Thanks CC, interesting stuff (but sort of wish I hadn't read it!).

There is a bright light on the horizon, Matt, we don’t know clubs results as yet for last season but we do know that gates went up just under 20%. Seems that big days out at Tottenham, Twickenham, Cardiff et all are the way to go.

Even with Wray writing down/off a huge chunk when he left we continue to spend like a drunken sailor.
Biggest annual spend third smallest gate ...
What on earth is our plan to even get vaguely close to breaking even? I don't have a scooby.

I have to say that I always felt that the next set of accounts, ie the year just completed would show a dramatic improvement.

With the salary cap at the lower level and a big increase in gates and ticket prices the impact will be profound.

It confirms more than ever that we need a full 18,000. with the stadium "GIFTED", to get to a sustainable position.

I believe that the TV rights need to deliver a significant increase in the next round of negotiation and combined with increased gate receipts you can see how the deficit can be closed for Bath. Saracens have a problem with already high income, must be sponsorship revenue, small ground OK recently increased but still restricted by Barnett Council and the biggest loss.

Gloucester is odd. 100 more employees than Bath, less revenue, yet materially lower loss..........


Very interesting Mr CC would be fascinating for a "fly on the wall" documentary to attend every Board Meeting to see how each organisation thinks they can become sustainable.

I think with "only" 18 Premiership games, squads should be reduced significantly with the Academy used to bolster national call ups and injuries.

So increased gates with existing capacity
Increased capacity
Increased ticket prices
Knock on increased sales
Reduced squads, 10 less at say £125,000 with NI plus is about a saving of £1.5m
Increased TV revenue on the next deal

If that little lot were possible/achieved then I think sustainability is close.

Quote:

Bath Supporter Jack
Gloucester is odd. 100 more employees than Bath, less revenue, yet materially lower loss..........

I think that we aren't comparing like for like with staff numbers - I would guess that Exeter for example 'sales and admin' includes all the staff that are / were associated with the non-rugby activities at the club? Suspect that Gloucs must be similar. Or maybe Bath are agency staff and some of the other clubs are directly employed?

[24/25 adoptee: Francois van Wyk]



Edited 1 time(s). Last edit at 2024:07:25:08:49:25 by BathMatt53.

I would suspect Bath will take a hit on merchandising this year, given the issues with the current kit manufacturer!

Adopted Players: All of the little blighters!!!

That very much depends on the shape of the contract with Castore, which of course we don’t know. The Club seem to have outsourced the merchandising operation to them. Maybe they also outsourced the financial risk so the Club itself might not take the hit.

This situation was predicted by the illustrious Harry Barstow when the club voted to turn professional at the EGM back in 1996 and he was one of very few who voted against it. The rest of us voted in favour as we could see the club disappearing and we didn't want that as we’d enjoyed so much recent success.

The problem has always been that club rugby's financial ambition during the professional era has been greater than its ability to self-fund that ambition. It wanted to be like Premier League football but that was never feasible and should have really based its ambition on second and third tier football where there is less reliance on millionaires underwriting losses. Even then it would have been a struggle with the current structure at clubs.

Wages are too high and unsustainable which has a knock-on effect to ticket prices (which are ridiculously high at Bath) which in turn ensures many potential supporters are priced out of attending games. TV money is essential but I imagine the audiences are fairly small (by TV standards) so we have to be careful about killing that golden goose by asking for more money. Most TV viewers are only interested in international rugby and even that part of the game struggles: I understand Scotland is in a very precarious position financially.

I think there needs to be some serious and realistic thought given to the future of professional club rugby or it could disappear altogether.



Edited 1 time(s). Last edit at 2024:07:25:10:40:22 by Norton Glen.

Quote:

Norton Glen
This situation was predicted by the illustrious Harry Barstow when the club voted to turn professional at the EGM back in 1996 and he was one of very few who voted against it. The rest of us voted in favour as we could see the club disappearing and we didn't want that as we’d enjoyed so much recent success.
The problem has always been that club rugby's financial ambition during the professional era has been greater than its ability to self-fund that ambition. It wanted to be like Premier League football but that was never feasible and should have really based its ambition on second and third tier football where there is less reliance on millionaires underwriting losses. Even then it would have been a struggle with the current structure at clubs.

Wages are too high and unsustainable which has a knock-on effect to ticket prices (which are ridiculously high at Bath) which in turn ensures many potential supporters are priced out of attending games. TV money is essential but I imagine the audiences are fairly small (by TV standards) so we have to be careful about killing that golden goose by asking for more money. Most TV viewers are only interested in international rugby and even that part of the game struggles: I understand Scotland is in a very precarious position financially.

I think there needs to be some serious and realistic thought given to the future of professional club rugby or it could disappear altogether.

Welcome back, Boss! 👏👏

It'll be fascinating to see the impact of the (massive) ticket price rises on Bath's bottom line for this season just passed.

Thanks Darius, it's great to see you are keeping the flame burning.

SN has provided a fix that overlapping text on a mobile can now be seen by sliding. Thank you Jon.

Thanks CC, really interesting.

I'm not sure you'll like this but I remain REALLY suspicious about how prem rugby accounting is done. Just to poke one thing, where's Sarries income coming from? Where is it going? It not from their ground and its not going to their employees.

I have very mixed feelings about club owner debt. Are we £21m in debt or is BC doing us a favour? I can't help but feel like we've created a situation where clubs are not sustainable, owners bail them out but then write that up as debt on the club. I guess ultimately that is debt they'll get lumbered with as who'll take a loss making organization with tens of millions in debt off them but it all feels wrong.

We pull in £20m, and Sale, Bristol and Newcastle aside, most clubs are in that ballpark. That seems enough to run a professional sport. As Glenn says, maybe not with the ambition to be football, but that's not and never has been realistic. In my opinion its not even desirable. I don't see Newcastle and Sale as sustainable as it stands, I suspect there are other clubs that could be, I think there needs to be some pressure there to grow or be replaced and not just have an owner dump money into them year after year with no progress and no threat.

Quote:

Bath Supporter Jack
I have to say that I always felt that the next set of accounts, ie the year just completed would show a dramatic improvement.

You might be right but the accounting treatment of the CVC payment from 2019 unwinds in this financial year - so Saints, for example, will need to make an additional £2.4m pbt to deliver the same level of profitability as last year.

Thanks for the analysis CC - really good stuff.

Dan not sure Sarries figures any more "suspicious" than Baths given they're comparable and unlike Bath we are able to sweat the asset in addition to having great sponsorship deals and and so on.
I'd guess some of that money goes to repay a portion of the stadium redevelopment cost and I think we've a pretty big and expensive coaching group.

Quote:

Dan Wiley
I'm not sure you'll like this but I remain REALLY suspicious about how prem rugby accounting is done. Just to poke one thing, where's Sarries income coming from? Where is it going? It not from their ground and it’s not going to their employees.

Sarries income of £23m went to employees £15m and the rest was overheads of £13m not sure what you are getting at. Their costs are higher than their income and that has to be funded by borrowings from owners and others.

Quote:

Dan Wiley
I have very mixed feelings about club owner debt. Are we £21m in debt or is BC doing us a favour?

My feelings are not mixed and of course Bruce is doing us a favour as without the £21m there is no Bath Rugby! His £21m should in fact be £24 as he has discounted his loan by £3m as a special reserve. All the funds on Lambridge, the Rec development and Farleigh House and Brownsword purchase are in other companies so his commitment is much larger than the Rugby Club accounts.

Quote:

Dan Wiley

We pull in £20m, and Sale, Bristol and Newcastle aside, most clubs are in that ballpark. That seems enough to run a professional sport.

Just a little note about Bristol's figures - our figures are always skewed by the Bristol Sport tangle we operate under. I am truly no expert on this, but the multiple companies operating collectively with Bristol Sport hide not only our "worth" but our debt too. Our turnover figure is (I think) only tickets and merchandise. The match day sales which most other clubs will include in their total sales go straight to Ashton Gate Ltd. Ashton Gate Ltd then charges us rent. Ashton Gate Ltd also has a whacking great debt to Lansdown for the stadium redevelopment which is possibly shared out between the rugby and football clubs by means of repayments. But even that debt will eventually be covered by other redevelopment at the site (hotels etc) and the sale of the delayed new houses at Ashton Vale. As a Bristol supporter, it would be great to know the club's total income and total outlay per season, but I don't think we will ever properly know that. It's complicated...

At least you have Mr Lansdown!!!

It's interesting the difference in having a benefactor willing to just fund the club, Wray, Craig and others looking for it to be at least vaguely sustainable.
Tbh grateful for either type as I doubt the Prem would exist in its current form (for good and bad) without them.
I get peoples complaints about ticket prices and games etc but the reality is for the majority of supporters the owners are subsidising us watching their team!

Quote:

OM
Dan not sure Sarries figures any more "suspicious" than Baths given they're comparable

Yeah, it was just the first thing that I picked up on, I do find these figures odd across the board, but there's no real detail there so who knows. I guess what I was thinking about with Sarries with they turnover is the highest with a low gate and the biggest loss, their wages, while not the lowest aren't anything special. The other rugby incomes should be broadly similar across clubs so it suggests to me that a lot of that turnover is coming from other sides of the business and that's where I suspect things get a bit murky.

Quote:

CC
My feelings are not mixed and of course Bruce is doing us a favour as without the £21m there is no Bath Rugby!

That would be fine if he'd not talked the cap up to a level where no one can afford it. As I say £20m feels enough to run professional sports team if you manage your wages sensibly. Encouraging the cap up to a point where we (and everyone else) make a loss then record that loss as debt against the club. So actually there would no Bath rugby without his £21m AND big hikes in the cap even with that we're standing on the point of no club rugby as we know it. So, as I say, pretty mixed about it.

Could we not set the cap at a level where clubs with that decent turnover can afford it and not have this debt? Sure we might lose a few more mid tier English players to France (I don't know how many their league can really sustain, don't they want their own players?), "decent" level prem players won't be of interest to them and the international caliber earn so much from England fees that they won't be that tempted either. Worse case we bring on some youngsters. I think I can manage that loss.

Murky as in not clear or murky as in dodgy Dan.
I feel like saying Sarries are now whiter than white is probably holding myself hostage to fortune but even so my understanding is things have changed considerably to the extent that we have been praised by the SCM and our compliance manager has been asked to work with PRL overall in showing best practice (both things revealed in our AGM)

I'm not familiar with all our streams of income but I swim around the corner at Copthall and the StoneX is in use on a pretty regular basis for non-Sarries activity.
Middlesex Uni sports dept is based in the new stand and we derive rental income from that too.

Like you I'm a bit confortable with supporting one of the teams most responsible for continually trying to increase spending, legal as well as otherwise.
I'm also a hypocrite as I enjoy the team that has been built and the coaching we have and that comes at a price.
That said Saints and to a lesser extent Chiefs and a few others show what you can do without hitting cap.



Edited 1 time(s). Last edit at 2024:08:01:12:47:23 by OldMarovian.

From what I could guess there's probably a sliding scale between businesses legally using sporting clubs and their debt as tools to, well, er, football. I'd like to think rugby is up at the legitimate end of things, but I think it would be optimistic that things that go on in other professional sports aren't happening here.

I just picked up on Sarries as one that caught my eye, as I mention on the other thread Sale's don't look like they tell the real story either.

I'm not suggesting anything about the salary cap to be clear, other than it should be tuned to insure clubs don't lose these amounts.

If you really wanted to get into some game theory, living in/near Exeter or Newcastle is a hell of a lot cheaper than London. You could absolutely provide incredible accommodation, fully declared and within the cap as part of salary that creates way more disposable/saveable income for players.

Quote:

hasta
If you really wanted to get into some game theory, living in/near Exeter or Newcastle is a hell of a lot cheaper than London. You could absolutely provide incredible accommodation, fully declared and within the cap as part of salary that creates way more disposable/saveable income for players.

Who lives in London, though? Quins train in Guildford and Saracens in St Albans. Both play at home less than 20 days a year. Living in London would be quite inconvenient.

BB

I believe more of the Sarries team are out St Albans/Harpenden way than London but it is a draw for some of the younger players.



Edited 1 time(s). Last edit at 2024:08:02:20:29:14 by OldMarovian.

Quote:

DanWiley As I say £20m feels enough to run professional sports team if you manage your wages sensibly.

Well clearly £20m isn’t enough. Remember the figures are for the season 2022/23 when the cap was £5m. As stated the clubs lost £26m so to break even they need another £2.6m each but as the cap is going up they need an extra £2m on top! Maybe our 25% STH increase isn’t enough!



Edited 1 time(s). Last edit at 2024:08:02:20:09:59 by CoochieCoo.

Quote:

CoochieCoo

Quote:

DanWiley As I say £20m feels enough to run professional sports team if you manage your wages sensibly.

Well clearly £20m isn’t enough. Remember the figures are for the season 2022/23 when the cap was £5m. As stated the clubs lost £26m so to break even they need another £2.6m each but as the cap is going up they need an extra £2m on top! Maybe our 25% STH increase isn’t enough!

Most of them also need another £2.4m each to cover the deferred CVC income which was in the 22/23 numbers but will not be in the 23/24 numbers (except Exeter and maybe one or two others who used different accounting treatment).

Quote:

Brown Bottle

Quote:

hasta
If you really wanted to get into some game theory, living in/near Exeter or Newcastle is a hell of a lot cheaper than London. You could absolutely provide incredible accommodation, fully declared and within the cap as part of salary that creates way more disposable/saveable income for players.

Who lives in London, though? Quins train in Guildford and Saracens in St Albans. Both play at home less than 20 days a year. Living in London would be quite inconvenient.

...Guilford and St Albans are much more expensive to live in than Exeter or Newcastle.

London weighting for Sarries SC works for me 😉

Quote:

hasta

Quote:

Brown Bottle

Quote:

hasta
If you really wanted to get into some game theory, living in/near Exeter or Newcastle is a hell of a lot cheaper than London. You could absolutely provide incredible accommodation, fully declared and within the cap as part of salary that creates way more disposable/saveable income for players.

Who lives in London, though? Quins train in Guildford and Saracens in St Albans. Both play at home less than 20 days a year. Living in London would be quite inconvenient.

...Guilford and St Albans are much more expensive to live in than Exeter or Newcastle.

Well, Newcastle, maybe - but you wouldn't choose to live in the cheaper places. The areas around Guildford and St Albans are probably cheaper than Bath. Leicester and Northampton are close to some of the cheapest housing areas in England.

Also, a £300k property will vary in size across the country but it's still a £300k property.

It's not quite as simple as you make out.

BB

ONS suggests average house prices of (roughly) £450k Bath, £500k Guildford and £570k St Albans.
Ofc there are more and less expensive areas in all of those and the grouping for Bath is also North Somerset which may bring it down but that is pretty in line with what I'd have expected.

Quote:

Brown Bottle
Also, a £300k property will vary in size across the country but it's still a £300k property.

Yes, surely this is the point - houses of the same value are (obviously) the same value nationwide, you just get a better house in a cheaper area. That's the decision that every house-hunting person in the UK has to make isn't it and why Phil and Kirsty have a TV show?

[24/25 adoptee: Francois van Wyk]

Quote:

CC
Well clearly £20m isn’t enough. Remember the figures are for the season 2022/23 when the cap was £5m. As stated the clubs lost £26m so to break even they need another £2.6m each but as the cap is going up they need an extra £2m on top! Maybe our 25% STH increase isn’t enough!

Well, that's sort of my point. I feel you should be able to run a professional sport off £20m, just maybe not in the way rugby is currently being run. If those accounts truly reflect the state of play there's no point continuing. Rugby will just keep running up debts until all of its clubs are bankrupt and a change in the way things are done is forced on it. That would be very damaging to rugby and probably means the end of brands like Bath. As an aside putting the cap up £2m seems to be insanity. If BC wants to pay that money, fine. But not if its just going to get dumped back on Bath as debt.

However, club owners seem just a bit too happy with this situation. Maybe it is because they are very wealthy and don't care about a few million a year. Again, that's possibly ok if that's the case, but then they need to own that debt, not put it back on the clubs otherwise we're back in the first case where rugby has no future. Or maybe, as in football and other pro sports, clubs are being used as financial mechanism where that money can be sunk and landed on the club.

If owner's aren't happy about this situation then introduce FFP type laws that say no club can continue to run at a loss the way they are. If they want to run sustainably, that forces everyone to do so.

The problem we now have are two clubs (as I understand it) in Bath and Sarries who still very actively want the cap back up.
Both Chiefs and Bristol share responsibility, along with Bath, for it going back up as those were the clubs named as making the salary cap reduction conditional on it returning to previous levels.
Since that time Chiefs have changed their tune and Bristol have said they they won't spend up to cap.

Of the other clubs I believe Tigers have said they felt it should have stayed but will spend to the new cap.
Falcons and Chiefs will spend under the current cap due in part to prudence and lack of wealthy benefactor. Glaws sound like they won't be either.

Saints I'm not sure but I'd guess with their current squad and no big names incoming they maybe need to spend a bit more than last season as they renew some contracts but I'd guess are going to be under cap.

Quins I'm pretty sure will spend up to it. Sale? Not sure.

All in all youre likely going to have three main tiers.
Those spending up to the new cap, those spending around last seasons and the also-rans.



Edited 1 time(s). Last edit at 2024:08:05:15:49:02 by OldMarovian.

I would be interested in the reasoning behind the cap raise. After all, £2m would still be well below the French and Irish teams, so its not like they would achieve parity, but it could be enough to send a few of them over the edge. Seems like a high risk for not a huge payback in reward unless I am missing something obvious.

[24/25 adoptee: Francois van Wyk]

It's a cap return really BM, not raise.
When the League wanted the cap reduced Bath, Bristol and Chiefs disagreed.
Their agreement was only gained on the condition the cap-fudge was put in place (I'd have had total sympathy had that been for existing contracts only at 75% but I instead it was written to give them a month plus to tie up new long term agreements) and that after X years the salary cap returned to its previous levels.

BTW I have no issue believing Sarries were in that group too but unlike the three clubs above they weren't named numerous times in the papers as being the dissenting clubs. I have no doubt they are one of very few clubs who still want the raised cap level now which I agree is bonkers. There again I don't care about Europe but I suspect it matters to the club and the bottom line and they feel they need the money to compete.

For context I believe the Prem clubs were getting similar to the much derided Welsh clubs last season. That does suggest that it's not just about the money but how you use it.

Yes, but its a return to cap levels that are putting clubs out of business, actually the current levels look like it will be a slower version of the same.

Quote:

OM
There again I don't care about Europe but I suspect it matters to the club and the bottom line and they feel they need the money to compete.

I don't think the bottom line argument can really work. We're spending too much (going broke) in order to protect our bottom line?

English clubs have had the same problem in Europe for a long time. Celtic nations focus their internationals on a small number of teams (2 or 3). French clubs have a better rugby economy than us and buy in ringers. Given that we really don't do that badly. We've had this conversation that "we can't compete in Europe" for at least 2 decades and we've won it 6 times in that period. By comparison France has "dominated" it winning it 9 times. A couple of Irish teams have won it 5 times.

It's really not that bad and there's a reason for it. Top English players stay in England because of the money Twickenham pays them.

I can help but feel a difference between French rugby and English is their owners and supporting businesses plow money in in the form of "sponsorship and investment" we plow it in in the for of debt. Or are these French clubs racking up debt in the same way we are? If that's the case good luck to them, their financial model is as limited as ours.

Basically agree Dan but it's meaningless to compare with the French model.
France had had proper wide spread club rugby support with from the populace and the government (via local authorities) for as long as I can remember.

If you're really, really lucky in the UK your club might be based in a traditional rugby hot-spot with little in the way of other sports to compete (hello Bath!!) you might even have a council that is generally supportive of the club and maybe even helps facilitate loans and backs your ambitions to grow. Few Prem clubs seem to have both.

Many of the French club grounds are owned and maintained by the local authorities. In some cases built by them at no cost. That's a very significant saving for the clubs.
The revenue from their bigger support base is what makes it so viable though and there isn't AFAIK a magic way to suddenly double or more probably tripple the Prems viewership. The dream is the 6 Nations audience adopt club rugby but there's been precious little sign of that on any significant scale since I've been watching.

The reality is Sarries breaking the cap but still almost certainly spending less than most of the French teams and Leinster not only competed but dominated for a period and there's no reason to feel several other Prem clubs couldn't have done/do the same. The problem as you say is the return isn't there to make that level of investment work even if it were allowed.

I can see a Prem club winning the ERCC in the coming seasons in a similar way to Chiefs. A glorious one of with a fair wind and some fortune. But replicating it over seasons? Not a chance.

I think Leinster have shown, even with a squad of superstars playing together regularly against top opposition, you need fair wind and fortune. I'm ok about how we do in Europe.

I don't feel we're as far away from the French as we might think. Yes, they might get stadiums relatively cheap and a local and national government that support them. In general the French might be more into rugby than us*. What all that really leads to is large companies putting money into their clubs and that's the difference. I know my company put a fair bit into Clermont (I think) in a way they don't think of putting it into an English club. The question is why don't we think like that and what are the barriers? I suspect its lots of little things, none of which are impossible. I don't think its come about because all their clubs are going broke because they apparently spend too much.

* This is a hard one to do anything about, if they've genuinely got a larger population into rugby then that's a hard thing to compete with. If it is the case, and even if it isn't, I think we'd be WAY better off investing in advertising and attracting new fans compared to ramming the cap back up.

Sale might be an interesting one to watch for financial stability. The Simon Orange merger of his business into a US SPAC has just fallen through. This was designed to add funds to the Sale parent (Corpacq). Given the parent co has over £300m debt then cash might be tight for a while.