The Business of Rugby

Edward Griffiths leads call to remove the salary cap in the Premiership on the back of Carter's signing.

http://www.telegraph.co.uk/sport/rugbyunion/premiership/11302816/Saracens-lead-call-to-scrap-salary-cap-after-Dan-Carters-record-breaking-move-to-Racing-Metro.html

The Premiership clubs are already loss making in the main, are we getting ready for another cycle that we've already seen (in football), whereby teams are "Invested Up" (Chelsea / Toulon) to become superpowers, prompting other teams gambling to follow suit (Paris Saint German/ Monaco - Saracens/Racing Metro), which necessitates that the overall governing body steps in to impose Financial Fair Play rules in order to try to slow the runaway train?

Should we be pushing for them now? Instead of lifting the cap in the UK, controls across the entire European game would result in a more uniform growth. The worry about not doing this is that not only would we get uneven growth without, we would actually have a contraction of Euro Rugby as teams such as Connacht/Edinburgh/Sale will struggle to even keep up with the secondary pull.

Are you in favour of free markets for rugby? Is the rugby system ready to go free market?

OldRio

Heaven help us all. True capitalism. Ugly and greedy.



*Man the barricades comrades*

Sangre

I don't think free market rules work for sports clubs as certain people are happy to run them as a loss making enterprise which is very unfair for those clubs without that financial backing.

There definitely needs to be some sort of financial fair play rule, although I don't agree with individual salary caps. Perhaps this could be done at Champions Cup level, whereby clubs competing at that level need to comply with the rules.

Winters

Considering Saracens are a loss making company it's quite hypocritical of Mr. Griffiths to claim they are in a position to scrap the salary cap.

The root cause of this is private ownership and loose regulation in the sport.

A return to member ownership or strong worldwide club regulation is the only answer before the likes of Lorenzetti, Mourad, Wray, Craig etc destroy rugby.

thomond2006

He brackets the Irish and French clubs together when he says they spend two or three times the salary cap on players.

There's no way one of the provinces is paying £11m/€14m on salaries! Although I guess you could find the aggregate figure of the IRFU/provinces in the annual report somewhere?

Swiwi.

I am all in favour of anything that doesn't promote an EPL-type scenario in rugby. It was a sad day when the English & French didn't see the light at the dawn of professionalism and centrally contract all their players. Imagine if that had been the case: we would see French players playing for French clubs, English for English and so on. I fear we will eventually end up with all the best players in France > England, and a terribly dull and repetitive European Champions Cup where Toulon, Clermont, Racing are the equivalent of Chelsea, Manchester x2 etc. The likes of the Irish & NZ provinces will become feeder clubs for the Top 14...

thomond2006

I'm only guessing but I imagine financial fair play rules would be tricky to implement in Europe given the different structures in each country.

How do you account for the likes of POC and Heaslip who are paid by the IRFU and then allowed to play for their province for free? In Wales there is now a structure where salary payments are shared between region and union. In England I believe clubs are reimbursed for the number of EQ players in squads and also the number of players selected in the England/EPS squad. In France they agreed a similar deal recently.

thomond2006

thomond2006 wrote: »

I'm only guessing but I imagine financial fair play rules would be tricky to implement in Europe given the different structures in each country.

How do you account for the likes of POC and Heaslip who are paid by the IRFU and then allowed to play for their province for free? In Wales there is now a structure where salary payments are shared between region and union. In England I believe clubs are reimbursed for the number of EQ players in squads and also the number of players selected in the England/EPS squad. In France they agreed a similar deal recently.

Fair Play rules would require that each province be audited as a singular entity and identify the IRFU's investment as that of an outsider.

It would be difficult to setup, but a solution would be found.

Larbre34

If he wants a premiership of 5, let him go ahead. I daresay some of the other sugar daddy owners couldnt afford much more than they already invest.

irishbucsfan

If someone can come up with a decent approach to imposing financial fair play then it should absolutely be brought in. Unfortunately financial fair play would likely hit the provinces far harder than it would hit the big traditional English/French clubs, I think those in this thread calling for it haven't really thought it through very much.

As far removal of the salary cap, it's questionable how much the salary cap is actually influencing rugby in England or France anyway. It's not the right thing to be concerned about. People saying it's ridiculous because Saracens, or indeed any other club, are operating at a loss really are missing the point massively, those clubs will always operate at a loss regardless of their turnover and there isn't anything wrong with that.

molloyjh

thomond2006 wrote: »

I'm only guessing but I imagine financial fair play rules would be tricky to implement in Europe given the different structures in each country.

How do you account for the likes of POC and Heaslip who are paid by the IRFU and then allowed to play for their province for free? In Wales there is now a structure where salary payments are shared between region and union. In England I believe clubs are reimbursed for the number of EQ players in squads and also the number of players selected in the England/EPS squad. In France they agreed a similar deal recently.

It actually wouldn't be that hard to build rules around that kind of thing I wouldn't think. It may require some technical changes to central contracts and how they are worded, e.g. do some sort of split on the remuneration for provincial and international aspects to the contract.

Something needs to happen though at this stage. Otherwise what Swiwi says will happen. We're already seeing big SH names moving to France in large numbers. Imagine how pissed of some of the fans from down that direction are getting with it all. If England and France get into a race to the top then this will only get worse. And players from other NH countries will get sucked into it more and more. We saw what happened to the Pro12 when the Welsh Regions lost a number of players. The league still hasn't recovered.

For the good of the game this needs to be stopped.

Most of the comments on the telegraph article (predominantly English rugby fans) are against the idea btw...

thomond2006

Munster can have Mourad, Leinster can take Lorenzetti, Connacht can have Savare, Ulster can have McIlroy.

We crush everyone until the end of time. Sorted.

irishbucsfan

Deleted User wrote: »

Most of the comments on the telegraph article (predominantly English rugby fans) are against the idea btw...

Most of the people in England would be against the idea, and the RFU would resist it quite aggressively. I'd be very surprised if the cap was removed, but I'd be equally surprised if it wasn't relaxed further and further.

irishbucsfan

irishbucsfan wrote: »

Most of the people in England would be against the idea, and the RFU would resist it quite aggressively. I'd be very surprised if the cap was removed, but I'd be equally surprised if it wasn't relaxed further and further.

Realistically, the problem that Edwards highlights is a real problem. But his solution is wrong.

However, he has no power whatsoever to slow the wage inflation and the over-investment in France, so the suggestion of increasing his allowed expenditure is his only way to try to follow.

He's highlighting a fairly obvious hole in "World Rugby" at the moment. However his solution is a short term "Mé Féin" solution (to be expected, he is running a club not a 'game').

I think it's time for controls, across the board. It's not a straightforward system to instigate, it's not easy to manage, and it will be prone to manipulation and errors but we need to put the brakes on the runaway train that is French Rugby.

Is it World Rugby that have the power to do this?

Or EPRC?

Swiwi.

Swiwi. wrote: »

I am all in favour of anything that doesn't promote an EPL-type scenario in rugby. It was a sad day when the English & French didn't see the light at the dawn of professionalism and centrally contract all their players. Imagine if that had been the case: we would see French players playing for French clubs, English for English and so on. I fear we will eventually end up with all the best players in France > England, and a terribly dull and repetitive European Champions Cup where Toulon, Clermont, Racing are the equivalent of Chelsea, Manchester x2 etc. The likes of the Irish & NZ provinces will become feeder clubs for the Top 14...

As sad as it is, I think this is the eventual outcome no matter what path we take at this point. That's capitalism for you. The tragedy of the commons. The little guy gets **** on.

The only saving grace is if Bill Gates takes up an interest in Irish Rugby over night.

Winters

irishbucsfan wrote: »

People saying it's ridiculous because Saracens, or indeed any other club, are operating at a loss really are missing the point massively, those clubs will always operate at a loss regardless of their turnover and there isn't anything wrong with that.

Why do you see no problem with clubs always operating at a loss?

Tox56

Swiwi. wrote: »

I am all in favour of anything that doesn't promote an EPL-type scenario in rugby. It was a sad day when the English & French didn't see the light at the dawn of professionalism and centrally contract all their players. Imagine if that had been the case: we would see French players playing for French clubs, English for English and so on. I fear we will eventually end up with all the best players in France > England, and a terribly dull and repetitive European Champions Cup where Toulon, Clermont, Racing are the equivalent of Chelsea, Manchester x2 etc. The likes of the Irish & NZ provinces will become feeder clubs for the Top 14...

Maybe I'm hopelessly optimistic but speaking for Leinster anyway the underage structures are so good that players will always come through, and I've seen first hand that there is a genuine draw/desire for them to play for Leinster, it's an end goal in the same way playing for Ireland is.

There will be a Sexton or two but I really think we can avoid the majority of the talent being ripped out of the squad to follow the money like in football. But I guess we'll see

Winters

Winters wrote: »

Why do you see no problem with clubs always operating at a loss?

Clubs would be stupid to post a profit. They'd pay tax on a profit. All clubs should (in theory) be posting minor losses, reinvesting any earned profits instead of paying taxes on them.

elguapo

You really have to love Saracens. Spent the past few years bleating about how they were running at a loss, so European Cup model needs changing in order for them to get their "fair share". Bingo.
Not six months after, and they want to abolish the salary cap because it's apparently holding them back. This despite having two spots available for marquee signings. The mind boggles.
Worst of all, this will turn the AP into the Premiership in soccer. 3-4 teams with realistic prospects, everyone else fighting over scraps. The likes of Sale and Exeter will have no hope if the salary cap is done away with. Ugh.
If Saracens went out of bussiness tomorrow I'd be perfectly happy.

Tox56

Tox56 wrote: »

Maybe I'm hopelessly optimistic but speaking for Leinster anyway the underage structures are so good that players will always come through, and I've seen first hand that there is a genuine draw/desire for them to play for Leinster, it's an end goal in the same way playing for Ireland is.

There will be a Sexton or two but I really think we can avoid the majority of the talent being ripped out of the squad to follow the money like in football. But I guess we'll see

We can agree that at the wage differences now, that the "Pull" of Leinster and the Ireland shirt is enough. But what if it becomes 'standard' to be paid €250k p/a in France? We're hurtling towards those kind of figures. How much is that "Pull" actually worth to a player?

I think most of us agreed that Sexton had to go to Racing for the money they offered. It's a finite career, and the number was just too big to ignore.

It's all relative though, if JJ has been offered 3x his salary Northhampton, that's a very, very, very difficult deal not to take, regardless of all other factors.

There's a number for everyone, (maybe not POC/POM/Kearney kind of lifers), but there is. At some stage the dam gives in and players go, and it's unfortunately accepted.

Winters

[Deleted User] wrote: »

Clubs would be stupid to post a profit. They'd pay tax on a profit. All clubs should (in theory) be posting minor losses, reinvesting any earned profits instead of paying taxes on them.

The IRFU is a not for profit organisation yet still posted a profit of €7.3m in 2014.

Saracens have posted successive losses in excess of €42 million in total over the last 7 seasons up to 2012/2013. That's not sustainable.

Cookiemunster

Is it time to be tying players down to 4 -5 year deals and demanding transfer fees from the English/French if they want them?

errlloyd

Sangre wrote: »

I don't think free market rules work for sports clubs as certain people are happy to run them as a loss making enterprise which is very unfair for those clubs without that financial backing.

This.

If racing metro can make money on Dan Carter power to them. If it means they shift more tickets and sell more merchandise then I think everyone benefits. More fans for our sport in general, more money in our sport in general.

However the marginal benefit decreases each superstar you buy. So there comes a point when signing another superstar won't sell anymore jerseys or reach any new fans. At that point they stop being a return on investment. Clubs who are willing to buy all the talent and make huge losses are what make the playing field unfair.

thomond2006

Cookiemunster wrote: »

Is it time to be tying players down to 4 -5 year deals and demanding transfer fees from the English/French if they want them?

4-5 year deals: Yes

Transfer Fees: Absolutely not because if that culture begins to manifest itself we find it will difficult to hold onto players.

Winters

Winters wrote: »

The IRFU is a not for profit organisation yet still posted a profit of €7.3m in 2014.

Saracens have posted successive losses in excess of €42 million in total over the last 7 seasons up to 2012/2013. That's not sustainable.

absolutely agreed. That's why I said aiming for minor losses. Saracens are the exact model that "rugby" shouldn't be allow be followed imo.

The IRFU would have been (from a taxation & theory viewpoint) better off finding somewhere to re-invest that cash if they could. However, don't forget that Corporation Tax on the IRFU is only half that of what is charged in the UK.

Swiwi.

Tox56 wrote: »

Maybe I'm hopelessly optimistic but speaking for Leinster anyway the underage structures are so good that players will always come through, and I've seen first hand that there is a genuine draw/desire for them to play for Leinster, it's an end goal in the same way playing for Ireland is.

...until the money gets just too big. For example, it is widely known that virtually every major AB is taking a paycut by remaining in NZ, but they enjoy playing their rugby there, and are still very well paid.

However...if the kind of contract that Carter is being offered starts appearing routinely, there is only so far players will bend to loyalty.

The things I would suggest that are working well for the NZRFU that can be applied to Ireland are

1) Long contracts. Most of the contracts seem to be 4 year deals now.
2) Sabbaticals (probably not needed in Irish contracts)
3) Players group that is separate from Schmidt

Winters

[Deleted User] wrote: »

absolutely agreed. That's why I said aiming for minor losses. Saracens are the exact model that "rugby" shouldn't be allow be followed imo.

The IRFU would have been (from a taxation & theory viewpoint) better off finding somewhere to re-invest that cash if they could. However, don't forget that Corporation Tax on the IRFU is only half that of what is charged in the UK.

Does being a non profit organisation have any bearing on corporation tax?

Winters

Swiwi. wrote: »

.
3) Players group that is separate from Schmidt

What does #3 entail?

Swiwi.

Winters wrote: »

What does #3 entail?

A core group of senior ABs who feedback on player concerns, issues etc, ideas for improvement and so on, with the goal of keeping a group of happy campers.

At least, that's my understanding.

Essentially involving the players in the NZRFU management structure, and giving them buy-in.

Winters

Swiwi. wrote: »

A core group of senior ABs who feedback on player concerns, issues etc, ideas for improvement and so on, with the goal of keeping a group of happy campers.

At least, that's my understanding.

Essentially involving the players in the NZRFU management structure, and giving them buy-in.

Sounds logical, I'm pretty sure there is an existing framework covering those issues within the senior players.

@Winters

Don't we already have that?

http://www.irupa.ie/

@Winters, I'm not sure about non-profit and tax.

Dave_The_Sheep

Bath and Saracens being investigated for allegedly breaching the salary cap. I don't know how much will come of this, or how reliable the Mail are since I don't usually read it, but potentially there's some serious fines/points deductions there.

http://www.dailymail.co.uk/sport/rugbyunion/article-2881134/Saracens-Bath-face-heavy-fines-point-deductions-alleged-breaches-salary-cap-regulations.html

twinytwo

is a 30+ year old carter worth a million pounds?... nope

a lot of this would have been sorted if player quota were impossed in france and england.

Then you wouldnt have the likes of toulon and sarries with 50% or more of their squad being foreign players.

thomond2006

twinytwo wrote: »

is a 30+ year old carter worth a million pounds?... nope

a lot of this would have been sorted if player quota were impossed in france and england.

Then you wouldnt have the likes of toulon and sarries with 50% or more of their squad being foreign players.

There is a player quota in France where you must have a minimum number of French produced players in the 23. I'm not sure there is a quota in England but I think clubs are paid for the number of English qualified players.

Due to employment law you can't impose a clearcut nationality quota.

Winters

An interesting timeline since Saracens CEO came out calling for the removal of the salary cap and suggesting they have 6 other clubs backing them. (75% majority of PRL members required to pass motions)

Daily Mail reported this morning that Saracens and Bath are under investigation for Salary Cap infringements and that the previous comments by Griffiths were a pre emptive PR strike.

Then one by one PRL and PRL clubs have come out distancing themselves from Saracens' comments.

All except Bath who have remained schtum.

bilston

Winters wrote: »

An interesting timeline since Saracens CEO came out calling for the removal of the salary cap and suggesting they have 6 other clubs backing them. (75% majority of PRL members required to pass motions)

Daily Mail reported this morning that Saracens and Bath are under investigation for Salary Cap infringements and that the previous comments by Griffiths were a pre emptive PR strike.

Then one by one PRL and PRL clubs have come out distancing themselves from Saracens' comments.

All except Bath who have remained schtum.

So far I've seen Leicester, Northampton, Sale and Harlequins come and say they support the Salary cap, given that includes 3 of the biggest Premiership clubs it would be interesting to see exactly who the other 6 plus Saracens are that support it's removal. Nice of Griffiths to claim he speaks for so many other people when the evidence suggests he may not.

Winters

bilston wrote: »

So far I've seen Leicester, Northampton, Sale and Harlequins come and say they support the Salary cap, given that includes 3 of the biggest Premiership clubs it would be interesting to see exactly who the other 6 plus Saracens are that support it's removal. Nice of Griffiths to claim he speaks for so many other people when the evidence suggests he may not.

You can also now add Bath and Gloucester to that list.

http://www.espn.co.uk/premiership-2014-15/rugby/story/251425.html

Griffiths is talking through his Swiss as usual.

irishbucsfan

Wait, so the private clubs are showing the ability to govern themselves and not simply bend at the knees to their evil overlord Nigel Wray? But surely that will change the entire narrative? Not sure how the writers are going to tie all this together to produce a satisfactory ending tbh, this show might be about to jump the shark.

twinytwo

just a quick note* ...

Of the 4 teams in ireland there are 175 players between the 4 squads 141 are irish/irish qualified and there are 34**(19%) foreign players.

Of the 12 teams currently in the Premiership there are 489 players, 294 are english/english qualified and there are 195 (40%) foreign players

Of the 14 teams currently in the Top 14 there are 562 players, 317 are french/france qualified and there are 245 (44%***) foreign players.

the teams with the highest % of home grown talent are Leinster (87%) Quinns (86.5%) and Munster (86%)
the teams with the lowest % of home grown talent are Toulon (41.5%) London Irish (44.5%) and Sarries (52%)


* yes i was bored
** our friends from the west of the country have 14 foreign players
*** Toulon have a whooping 58.5% of their squad as non french