What happens if there’s no government bail out?

[Scrumhead]

I’m trying to bury my head in the sand a bit, but things are looking pretty dire for pro rugby right now: https://www.rugbypass.com/news/you-cant ... er-exeter/

Given that Exeter are pretty much the only profitable club, I can’t see how the other Premiership and Championship clubs can stay in business if no crowds are allowed in until March 2021 at the earliest.

If the government can’t or won’t bail out the RFU (and Scottish and Welsh unions to boot), what is going to happen to our sport? Are we really facing a semi-pro future where Tom Curry’s a fireman who plays rugby for peanuts on the side?

[morepork]

“Let’s hope there is a genuine concern taken by the Government in how they aim to help us and how they also aim to get crowds back in as soon as they possibly can.”


This just isn't going to happen this year, and rugby just isn't a priority I'm afraid. If the government had taken things seriously five months ago, you could be further along. But they didn't and you aren't. There will inevitably be pain and not all clubs will last.

[Mellsblue]

The PR offensive begins:

https://www.premiershiprugby.com/news/a ... hittingham

[Scrumhead]

“Let’s hope there is a genuine concern taken by the Government in how they aim to help us and how they also aim to get crowds back in as soon as they possibly can.”


This just isn't going to happen this year, and rugby just isn't a priority I'm afraid. If the government had taken things seriously five months ago, you could be further along. But they didn't and you aren't. There will inevitably be pain and not all clubs will last.

I understand that rugby isn’t a priority - nor should it be when there are far more important things at stake.

My question was meant at face value - I’m curious to understand what people think would happen if there is no financial support offered. It simply isn’t possible for the sport as we know it to survive without it and that’s unlikely to be much different for the global game with Australia losing the Qantas sponsorship for example.

It’s definitely fair to say that in lots of ways, professional rugby has screwed itself over by allowing wages etc. to inflate to unsustainable and unrealistic levels, but what is the actual consequence for the sport if professional clubs can no longer operate?

The players were allegedly on the verge of strike action last time they were asked to take pay cuts. Would they actually be prepared to do it when the future of their employment is under serious threat?

[morepork]

You'd like to think they would. I don't see a short term solution here. Rugby will have to take a comprehensive break I think. Crowds are just not coming back any time soon. The sooner this is accepted, the faster this will pass. Planning to fly in players and fans for that 8N thing was a fucking ridiculously poorly thought course of action. If the whole of the Isles and most of mainland Europe are still getting hammered with the virus, what genius thought it a good idea to ignore that and sneak in a few thousand tourists across the border and play dumb? A long term strategy is needed which means planning for no crowds and traiging what you must. That will mean loss of players, staff, sponsors, and some set ups will not survive it, but rugby will come back eventually when everyone gets their heads out of their arses. There is no practical way to force a financial model that relies on crowd revenue onto the current situation. The sooner this is acknowledged, the better.

Are they charging to watch games on the telly or online at the moment? That will be the next thing to gouge, surely.

[Which Tyler]

Bath's operations manager was on sky news this morning, saying that, without crowds, clubs are losing in the region of a million pounds a month

[francoisfou]

We’ll have to go back to the glorious amateur days with players’ day jobs, training on Tuesday and Thursday evenings, and then a couple of pies and pints in the bar before staggering home to the missus!!

[Scrumhead]

My worry is that I very much doubt there would be any TV interest for semi-pro rugby. Maybe for internationals, but the club game would be even more penniless than it is now.

[morepork]

Even more penniless...that sums up the business model of club rugby doesn't it? It is going to have to hibernate, or it will die. I think the PR push to ask for financial relief or to somehow will the danger to public health away and get crowds in simply is not an option. Professional sport is a funny one. Being able to catch a ball and run over other dudes in shorts really doesn't translate to anything useful in real life.

[Digby]

The good news is general life will in the near future likely resemble old school games of rugby, entire towns will fight for the ball, albeit the ball will be a joint of beef or a loaf of bread.

[Scrumhead]

Even more penniless...that sums up the business model of club rugby doesn't it? It is going to have to hibernate, or it will die. I think the PR push to ask for financial relief or to somehow will the danger to public health away and get crowds in simply is not an option. Professional sport is a funny one. Being able to catch a ball and run over other dudes in shorts really doesn't translate to anything useful in real life.

Neither does kicking a round bag of air into a net but for some reason, millions of people are obsessed with football to the extent that it’s a huge global industry.

Part of pro rugby’s problem has been the naive belief that it could emulate the commercial success of football without the fan base or global infrastructure.

I don’t think the push to allow crowds will work, so the only thing the clubs can hope for is some kind of financial bail out.

[jngf]

Even more penniless...that sums up the business model of club rugby doesn't it? It is going to have to hibernate, or it will die. I think the PR push to ask for financial relief or to somehow will the danger to public health away and get crowds in simply is not an option. Professional sport is a funny one. Being able to catch a ball and run over other dudes in shorts really doesn't translate to anything useful in real life.

Neither does kicking a round bag of air into a net but for some reason, millions of people are obsessed with football to the extent that it’s a huge global industry.

Part of pro rugby’s problem has been the naive belief that it could emulate the commercial success of football without the fan base or global infrastructure.

I don’t think the push to allow crowds will work, so the only thing the clubs can hope for is some kind of financial bail out.

To play the devil’s advocate/contrarian would a retrenchment from professionalism be such a bad thing for rugby as a whole ?(notwithstanding that it provides the players’ livelihoods so appreciate that from their’s and their agent’s not but then again the Saracens debacle shows the old adage about money being at the root of all evil )

[Digby]

What we need to know really is what's going to happen to all the bank loans, and this isn't just a rugby or sport thing. A huge number of loans cannot possibly be getting serviced and that will only lead to a credit crunch and another banking failure.

If we're going to say let the chips fall where they may and allow businesses and various organisations to fail that's fine, but it's not an end to the problems it just moves them somewhere else.

[fivepointer]

Its going to be grim. Not just for the pro game. Rugby - and sport in general - at all levels is going to be severely hit.
We will lose clubs, players will drift away, interest will wane, investors will look elsewhere and support will ebb away. Thats just going to happen if people cannot play or watch the game in the numbers required to make it viable. I understand that the RFU funding to the Championship is likely to be drastically cut, resulting in those clubs having to move to an amateur basis. Will Premiership clubs have to follow suit? Some may i imagine.
Should rugby get some state support? There's a case for it but there are significant demands on Govt finance just now and sport may not be seen as a priority.
Tough times ahead with no short term relief on the horizon.

[Scrumhead]

Even more penniless...that sums up the business model of club rugby doesn't it? It is going to have to hibernate, or it will die. I think the PR push to ask for financial relief or to somehow will the danger to public health away and get crowds in simply is not an option. Professional sport is a funny one. Being able to catch a ball and run over other dudes in shorts really doesn't translate to anything useful in real life.

Neither does kicking a round bag of air into a net but for some reason, millions of people are obsessed with football to the extent that it’s a huge global industry.

Part of pro rugby’s problem has been the naive belief that it could emulate the commercial success of football without the fan base or global infrastructure.

I don’t think the push to allow crowds will work, so the only thing the clubs can hope for is some kind of financial bail out.

To play the devil’s advocate/contrarian would a retrenchment from professionalism be such a bad thing for rugby as a whole ?(notwithstanding that it provides the players’ livelihoods so appreciate that from their’s and their agent’s not but then again the Saracens debacle shows the old adage about money being at the root of all evil )

What do you think the advantages of rugby being semi-pro would be?

Players’ salaries would obviously need to drop significantly and they’d need to get additional jobs. Injuries would be far more costly too without access to full time rehabilitation facilities etc. and it would screw up their other jobs too. I don’t see any of these factors having a positive impact on the quality of the product.

Also, as I mentioned earlier in the thread, I can’t see much demand for TV rights apart from internationals. I’d like to think that would positively impact attendance figures, but having looked at those recently, there are plenty of clubs that would be very unlikely to fill their stadiums. The only way to really impact that would be to cut prices, which again doesn’t really help the game recover. Despite being ‘big’ clubs, the likes Sale or Saracens regularly play in front of tiny crowds. Do you really see that changing?

Also without TV audiences or match day crowds, who is going to see sponsorship as a good investment?

So, as I see it ...

Pros:

- Nostalgia for a bygone era

Cons:

- Players needing to balance rugby with another job
- Likely impact on quality of play/physical condition of players
- Unlikely to have TV money
- Unlikely to increase match day revenue
- Less TV/less crowds = less sponsors

[Digby]

Nostalgia for a bygone era is a big crowd favourite, still more so nostalgia for a bygone era that never existed in the first place

[Mellsblue]

It’s also more than just the on field operations. There are the other employees, the supply chains, the local businesses that rely on spectators, both home and away, etc etc.
There was a good article in the times yesterday about football clubs in the third/fourth/fifth tiers. They can be the heartbeat of their town and it’s economy. One chairman was saying how their function rooms are used by a host of local charities and community groups and that if they shut up shop he’s not sure who would host them.

All that said, I think sport below elite level is toast if we don’t have a vaccine by spring.

[fivepointer]

Robert Kitson in the Guardian - https://www.theguardian.com/sport/blog/ ... -the-abyss

[Mellsblue]

Piece in the times:

https://www.thetimes.co.uk/edition/spor ... 1600907094

RUGBY UNION
Rugby clubs ‘will collapse if no bailout’

Owen Slot, Chief Rugby Correspondent | Martyn Ziegler, Chief Sports Reporter
Thursday September 24 2020, 12.01am, The Times
Premiership Rugby club chairmen have warned that the professional game could die if the government does not provide a rescue package.

The 13 leading professional clubs have been talking over the past two days about how they will survive without crowds being allowed into their stadiums after plans for a gradual reintroduction of fans were scrapped.

One chairman told The Times that if the government did not act then there was a risk that “four or five of the clubs will go down”.

Another chairman warned that, “with no bailout, the whole of next season would have to be mothballed”. He said that the players would then have to be put on unpaid leave. “It is not about cutting costs; even with another huge wage cut there are still wages to be paid with no income to pay them.”

Boris Johnson said on Tuesday that no crowds would be allowed at sporting fixtures, possibly for six months. The news has left the clubs feeling desperate as they had budgeted on being allowed a proportion of fans in stadiums from the start of the new season, which begins in November.


“This has come as a severe blow,” Semore Kurdi, the owner of Newcastle Falcons, said. “We are pretty thin already, we’ve operated with virtually no income from February. We’ve already done redundancies and salary sacrifices.”

Simon Orange, the co-owner of Sale Sharks, said: “We’re running out of options. Club rugby was hardly viable beforehand; with coronavirus it’s much, much worse; without crowds it’s impossible. The industry and the sport is genuinely in jeopardy. The industry is in danger. We could lose rugby, as we know it, from our lives.”

Bruce Craig, the owner of Bath, said: “The implications of no crowds and no revenues without aid will be terminal for some of the Premiership clubs and catastrophic for their communities.”

“The news from Tuesday is catastrophic,” Martin St Quenton, the Gloucester owner, said. “You cannot underestimate what has happened. Without a government bailout, club rugby is now unsustainable.”

For most clubs 50 to 60 per cent of their income comes from ticket sales, match-day hospitality and general match-day revenue. The clubs are now each losing between £750,000 and £1 million a month. The Treasury is expected to give the green light to a rescue package for sport as early as next week, though the size and scope is as yet unclear.

St Quentin said: “All the clubs had budgeted on what we thought were conservative attendances. Maybe even no fans this current season but 25 per cent from the new season’s start in November and normal crowds from the new year. Even that seemed pessimistic.”

Now that there is little hope of crowds returning, the clubs are pushing for a government bailout. Some clubs are owned by the super-rich, such as Bristol Bears, whose owner, Steve Lansdown, is a billionaire working in financial services. Others, however, are suffering and say that they will need a £5-6 million bailout to keep them going.

“We are all working on our cashflow and working out how long we’ve got to survive,” Orange said. “It’s costing most clubs £1 million a month; there aren’t many who can keep that up for long.”

Organisations will be able to submit bids for grants, or more likely long-term loans, from the Treasury’s rescue package to see them through the crisis.

Whitehall insiders say no decision is imminent on the size of the fund or exactly how it will work, but the £1.57 billion arts and culture rescue package announced in July is likely to be used as a model.

The loans from that fund last up to 20 years at a very low interest rate so would be an attractive proposition for sports struggling to get through the next six months.

The government is expected to make the fund available to all sports organisations with the exception of professional football, believing that the Premier League has enough income through its £3 billion annual TV income to fund the three divisions of the English Football League below it.

Some of the Premiership clubs are exasperated that the new guidelines are ruling out the return of even small crowds to games.

When Bath played Gloucester at the Recreation Ground on Tuesday evening, the game was intended as a pilot event for small crowds and 1,000 tickets had been sold. After the new government diktat that day, though, the fans were not allowed in.

“The 1,000 supporters would have been in a very safe environment,” Craig said. “Without doubt the risk of transmission would have been much less in the ground than the same 1,000 congregating indoors in pubs in Bath. Whether the decisions being made are being driven by science, academics, worst-case doomsday forecasters or government officials, there appears at times to be an absence of common sense.”

Orange said: “The government needs to be sensible and realise you can get 3,000 people in and be safe. Some clubs are creaking right now.”

How Covid crisis is affecting the community game

Preston Grasshoppers
In stating its case for a government bailout, the RFU estimated the community game in England would lose £86 million in revenue this season. “We are in danger of clubs disappearing forever,” Bill Sweeney, the chief executive, said.

Preston Grasshoppers expect their revenue to fall from £1.5million to £100,000 this year. The clubhouse has been empty; the beer festival and bonfire night have been cancelled. Grasshoppers have had to make three-quarters of their staff redundant.

The club kept training to help players preserve their mental and physical health. On Tuesday police cars turned up to make sure the socially-distant sessions on three pitches did not break government regulations. Gareth Dyer, the club’s head of rugby operations, said Twickenham must re-examine its priorities after squandering money since the 2015 World Cup windfall. “Money draining out of the game constantly is not the way we will build a sustainable future,” he said.

Penryn RFC
The oldest club in Cornwall, Penryn RFC will celebrate their 150th year in 2022. The plan was to spend the next 18 months working on ways to secure their future for another century. Instead, Penryn’s committee will be tasked with ensuring they survive to celebrate the anniversary.

Trevor Howells, the treasurer, fears Cornwall could lose a quarter of its amateur clubs. “There are 38 clubs in Cornwall. If we lose this season, that will be more like 28,” he said. The situation for Penryn became “much more serious” after the latest restrictions, which could lead to the clubhouse closing. Howell said Penryn would survive because the club has been “part of the life, part of the culture” of the town since 1882 — but without rugby it is difficult to diversify.

“We are trying to become a 12-month business but the brand of Penryn is the rugby club,” he said. “The volunteers’ passion is driven by the sport. If you don’t have rugby the old club is not there anymore.”

[Tigersman]

Steve Lansdown bails out the clubs.
Clubs let Bristol have double the cap space.

Easy solution, i'm waiting to be offered the PRL president spot.

[Oakboy]

Is it only Premiership football that can manage financially without turnstile money? In rugby, the clubs cannot sustain their existence without it, reportedly. I can't see any case for Government money being given to sport in a time of national emergency and impending financial implosion. Maybe, a Govt-sponsored loan scheme with the capital being guaranteed for, say, a five year period is the best that could be hoped for.

[Scrumhead]

Yep. I think some kind of loan is probably the best we can expect. Although personally, I would argue that sport is at least as ‘culturally’ important as the arts sector which did get a big bail out. Also amateur sport is far more beneficial for health etc. than sitting in a theatre.

[Oakboy]

Yep. I think some kind of loan is probably the best we can expect. Although personally, I would argue that sport is at least as ‘culturally’ important as the arts sector which did get a big bail out. Also amateur sport is far more beneficial for health etc. than sitting in a theatre.

I definitely agree about amateur sport and its health benefits, mental and physical. The problem is with full-time professional sport. I can imagine ministers saying, 'Get their sugar-daddies to cough up more.'

Oddly enough, I had some time for the case of 4th or 5th tier football clubs and their role in the community when I read a recent article. Can 2nd or 3rd tier rugby clubs make similar claims? I don't know enough about those clubs to offer an opinion.

At lower levels, with average crowds in the 500 - 5000 category, even with the new wave of infection, I can't see why spectators cannot attend in an outside location to the extent of say one third of capacity.

[Digby]

Because any sporting attendance still increases the possible vectors of transmission, no matter it's outside with some notion of distancing, people still have to travel to and fro grounds, enter and exit the grounds and seating areas, avail themselves of the facilities, purchase food/drinks/merchandise. And the government is looking to curtail activity such the R number drops below 1, or one could argue the government is trying to encourage as much activity as possible up to some politically acceptable number coming in below 1.

Sporting attendance being justified isn't an impossible sell, but it's hard when schools have been closed, you cannot visit friends/families, people can't attend funerals and the like. Sporting groups saying the government lack common sense because people would be outside are themselves failing common sense, what they need to have an argument for is why their sector of society should be prioritised over another, it's not realistic it would seem for everything to open even if in some limited fashion.

[Puja]

Because any sporting attendance still increases the possible vectors of transmission, no matter it's outside with some notion of distancing, people still have to travel to and fro grounds, enter and exit the grounds and seating areas, avail themselves of the facilities, purchase food/drinks/merchandise. And the government is looking to curtail activity such the R number drops below 1, or one could argue the government is trying to encourage as much activity as possible up to some politically acceptable number coming in below 1.

Sporting attendance being justified isn't an impossible sell, but it's hard when schools have been closed, you cannot visit friends/families, people can't attend funerals and the like. Sporting groups saying the government lack common sense because people would be outside are themselves failing common sense, what they need to have an argument for is why their sector of society should be prioritised over another, it's not realistic it would seem for everything to open even if in some limited fashion.

Nail on the head.

I think the government are making a right hash of this tbh. If they said, "We want to avoid a complete lockdown, so we want to curtail as many non-essential transmission vectors as possible," and then applied some kind of logical cut-off, then I think people would get behind it and would accept not going to the pub in the name of keeping the schools open and being allowed to hug grandma.

Instead, they've encouraged (non-essential) people to go back to offices, eat out to help out, and reopened the pubs and, once rates have started to go up, have decided that curtailing weddings, funerals, and children's birthday parties, pubs afte 10pm and banning 1k socially distanced people in a 30k stadium are the solution. You'd say the local boozer is far more of a transmission risk than a sports crowd spread around a stadium with stewards who know the club could fold if they're found to have f*cked this up. And the exclusions and caveats to the rules! It's frankly madness that I can do contact ruck training with 40 people at my rugby club, but my daughter couldn't run around a park with six of her friends for her birthday.

tl;dr - I think anyone can make an argument that anything in the current COVID restrictions is unfair because it's all stupid and contradictory and there's a dozen precedents for something being supported when something else similar is banned. Logic is absent from the whole response.

Puja