James Haskell, the former England international, has likened English rugby to \u201cThelma and Louise heading off a cliff\u201d after an independent report found that Prem clubs made a combined loss of \u00a334m last season.<\/p>\n
The report by a leading UK corporate recovery and insolvency firm, Leonard Curtis, suggests the game should consider adopting a franchise model, which it says would help Prem clubs to save between \u00a31.1m and 1.9m a year.<\/p>\n
Its recommendation comes after its forensic financial audit of the English game found that six of the 10 Prem clubs were still balance-sheet insolvent \u2013 albeit one fewer than a year ago<\/a> \u2013 and had net debts of \u00a3342.5m, up from \u00a3329.8m for the same clubs in 2022-23.<\/p>\n Speaking at the launch of the report, Haskell warned the results showed that English rugby\u2019s business model was \u201cbroken beyond tinkering\u201d. He added: \u201cIf I am to be charitable, there are flickers of good news. The number of clubs that are balance sheet insolvent has been reduced to six, from seven. Attendances are up in places. The women\u2019s game continues to shine, buoyed by a home World Cup victory and record-breaking crowds.<\/p>\n \u201cAll of this is wonderful, and yet it feels like singing Always Look on the Bright Side of Life as the house burns down around you. But here\u2019s the reality: not a single Premiership team made a profit in 2023-24. All 10 clubs lost money for the third year in a row.<\/p>\n \u201cRight now we are [the Hollywood characters] Thelma and Louise<\/a>, foot down, laughing, waving at fans, heading straight off the cliff. Everyone knows it. The players and coaches know it. Fans definitely know it. But the administrators? They\u2019re still checking the rearview mirror. That is why I actually like the R360 proposal<\/a>, whether it happens or not, because it\u2019s daring to do the opposite of everything we\u2019ve done the last 30 years.\u201d<\/p>\n \u2018It feels like singing Always Look on the Bright Side of Life as the house burns down around you,\u2019 says James Haskell, the former England international. Photograph: Tom Jenkins\/The Guardian<\/p>\n The report\u2019s authors stressed there were some signs of optimism, including a growth in ticket sales and viewers. They also noted that Newcastle had been recently taken over by Red Bull<\/a>, and expected one or two clubs might sneak into a profit next year.<\/p>\n However, Alex Cadwallader, a Leonard Curtis director and former England Under-21 player, stressed that English rugby\u2019s underlying issues could not be ignored. \u201cThere are no surprises in our latest report,\u201d he said. \u201cThe current model is proven. It is a loss-making one.<\/p>\n \u201cThe clubs collectively have been loss-making every year in the last 10 years once the exceptional items such as ground sales in 2014-15 and the CVC investment deal in 2018-19 are removed. The amount of debt continues to grow. Yes, there are sprouts of growth and recovery in some metrics, but a large leap needs to be taken to reverse the current trend that is firmly bedded in. The game is reliant on benefactors funding their clubs for which we are grateful. However, this cannot continue.\u201d<\/p>\n The report suggests that, under a restructured franchise system, clubs could save between \u00a31.1m to \u00a31.9m annually through economies of scale, sharing services and, initially, reducing the salary cap. \u201cThe competition in France is moving forward and disruptors with new models are circling,\u201d added Cadwallader. \u201cThe question really should be: why would we not consider a different model?\u201d<\/p>\n skip past newsletter promotion<\/a><\/p>\n The latest rugby union news and analysis, plus all the week’s action reviewed<\/p>\n Privacy Notice: <\/strong>Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n One of the report\u2019s co-authors, professor Rob Wilson, suggested that Prem clubs should consider lowering the salary cap at \u00a34m \u2013 a drop of \u00a32.4m \u2013 until the financial situation improved.<\/p>\n \u201cThe reality is the cap is too high,\u201d said Wilson. \u201cIt has been set at a level to appease players but the reality is operational losses. Smaller clubs are spending way above their means to keep up with the Harlequins of this world.\u201d<\/p>\n