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#Post#: 8704--------------------------------------------------
Premiership finances
DIR By: Duncang
Date: December 22, 2022, 4:23 am
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Some salutary words of warning in today's Telegraph:
"Gallagher Premiership clubs are at risk of “heading for
disaster”, having collectively amassed £300 million in net
debt over the past six years, Telegraph Sport can disclose.
The figure, which excludes investment in the competition from
CVC Capital Partners in 2018, highlights the fact that after
Worcester Warriors and Wasps were placed into administration,
other clubs are under threat.
An investigation shared by Mike Ryan, a private equity director
who has produced reports on the finances of Rugby Australia and
New Zealand Rugby, shows that:
CVC, which bought a minority shareholding of 27 per cent of the
Premiership for £200 million four years ago, took out a
£27.5 million dividend across the previous two financial
years from the league’s holding company, Premier Rugby Limited,
with PRL’s debt now £29 million, having been nil before
the takeover
London Irish are considered “high risk” due to low turnover of,
at best, £10 million and in excess of £25 million of net
debt, while Harlequins are “concerning” due to their high
borrowing of £48 million in the 2021 financial year
Wasps borrowed £62 million before the end of the 2021
financial year, months before the club were placed into
administration
Worcester Warriors wrote off £30 million of borrowings
prior to going into administration
Sharing detailed analysis of both the clubs’ and PRL’s financial
figures dating back to the start of the financial year in 2016,
Ryan believes that the structure of club finances and management
must be addressed as a priority for the league’s long-term
financial health.
“The club structure has historically been on an unsustainable
footing. It has never made a profit. The combined losses for the
clubs over the last six years, excluding the payment from CVC,
has been £300 million,” Ryan explained.
Gallagher Premiership clubs are at risk of “heading for
disaster”, having collectively amassed £300 million in net
debt over the past six years, Telegraph Sport can disclose.
The figure, which excludes investment in the competition from
CVC Capital Partners in 2018, highlights the fact that after
Worcester Warriors and Wasps were placed into administration,
other clubs are under threat.
An investigation shared by Mike Ryan, a private equity director
who has produced reports on the finances of Rugby Australia and
New Zealand Rugby, shows that:
CVC, which bought a minority shareholding of 27 per cent of the
Premiership for £200 million four years ago, took out a
£27.5 million dividend across the previous two financial
years from the league’s holding company, Premier Rugby Limited,
with PRL’s debt now £29 million, having been nil before
the takeover
London Irish are considered “high risk” due to low turnover of,
at best, £10 million and in excess of £25 million of net
debt, while Harlequins are “concerning” due to their high
borrowing of £48 million in the 2021 financial year
Wasps borrowed £62 million before the end of the 2021
financial year, months before the club were placed into
administration
Worcester Warriors wrote off £30 million of borrowings
prior to going into administration
Sharing detailed analysis of both the clubs’ and PRL’s financial
figures dating back to the start of the financial year in 2016,
Ryan believes that the structure of club finances and management
must be addressed as a priority for the league’s long-term
financial health.
“The club structure has historically been on an unsustainable
footing. It has never made a profit. The combined losses for the
clubs over the last six years, excluding the payment from CVC,
has been £300 million,” Ryan explained.
Addressing how to fix the Premiership’s loss-making model, with
clubs in the red for earnings before interest, taxes,
depreciation and amortisation, Ryan believes the Premiership
must hire an independent commissioner and follow the kind of
centralised model used in other sports, including American
football’s NFL. That would lead to centralised contracts in the
league that would ensure stricter player payments as well as
“consistent accounting so at any point in time you can look at
the health of the entire PRL”.
The impact of CVC’s investment has also been raised as a
concern, given that PRL now holds net debt where previously
there was none and has incurred £72 million of net losses
since CVC’s investment, having previously broken even.
#Post#: 8706--------------------------------------------------
Re: Premiership finances
DIR By: Paul Rogan
Date: December 22, 2022, 12:03 pm
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Read a post on Rolling Maul about Ealing being £5M in debt -
albeit to Mr Trailfinders..
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