England players’ £25,000 match fees may take a hit in the future, according to the Rugby Football Union’s departing chief executive, Steve Brown, after the governing body announced a loss of £30.9m on Monday.
Brown also admitted that an overspend on the England squad, largely as a result of a high turnover of players rather than staff, had contributed to the union’s financial plight. The RFU also expressed a degree of regret over the high cost of its £220m deal with Premiership clubs that allows Eddie Jones time with players in the first place.
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“We have an affordable position with the [payment] of England players and we need to make sure that is sustainable for the future,” said Brown. “That’s key, we need to make sure there’s a sustainable model that keeps the players safe and fit and well, well-paid for what they do but also operating a commercially sound and stable business. The market determines that to a certain extent, but the next phase we’re going through, with some of the wider challenges affecting us, will start to level that [out] a bit.”
The eight-year Professional Game Agreement (PGA), signed in 2016, guarantees Jones access to his squad but the RFU chairman, Andy Cosslett, on Monday acknowledged the role it has played in leading to the union’s loss, published in its annual accounts up to June 2018.
“We have to accept that over recent years we signed some long-term agreements with the professional game which, while strategically important, now appear costly against updated revenue forecasts,” he said. “This will restrict our discretionary investment capacity going forward.”
The accounts also show that the former chief executive, Ian Ritchie, who brokered the PGA, was paid £238,000 for his final two months in the job last year, despite the union being forced to make 54 redundancies. The RFU says the payment to Ritchie, who left the union in August 2017 and is now chairman of Premiership Rugby, was salary owed as well as additional amount in lieu of a full notice period as a contractual obligation.
Of the job losses – 62 roles were made redundant with 54 employees leaving the union – Cosslett said: “We’ve had to throttle back and sadly that involves some redundancies and restructuring. It’s important we have a stable outlook which reflects our updated revenue forecasts.”
In September, Ritchie was succeeded by Brown, who announced this month he is leaving his £400,000-a-year position after 14 months amid accusations from RFU grandees of mismanaging the union’s finances, but the departing chief executive has stated England’s budget for the World Cup is ringfenced.
“[Overspending] did happen but we have got control of it and everyone is clear about that, from Eddie and his team downwards,” Brown said. “Sometimes through injury or trying different players out we need to select more players in a series. It’s just the way that the model works. It can work for us and sometimes it works against us financially.”
The overspend of around £40m on Twickenham’s revamped East Stand has also been identified as a contributing factor to union’s harsher economic outlook but while its borrowing limit has risen to £100m, the RFU insists it is on sound financial footing, stating that a one-off cash injection means it has effectively broken even.
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The Twickenham Experience Limited hospitality business has been sold to Compass PLC for £31.6m, thereby boosting the RFU’s reserve fund, but Brown denied the RFU is moving money around to hide the £30.9m deficit. The RFU is also anticipating a profit for 2018-19.
The accounts also show that the RFU invested £107.7m of its revenue back into the sport, an increase of 8%, but its annual income fell £12.5m, largely due to hosting fewer Tests at Twickenham as well as England’s fifth-place finish in this year’s Six Nations.
Cosslett did confirm, however, that England’s upturn in form this autumn means Jones’s job is safe through to the World Cup. “The performance in the autumn was extremely good, and that discussion – if it was there recently – has certainly evaporated now,” he said. “The World Cup is a very significant focus for us and our priority one right now. It’s absolutely clear where the costs are leading up to the World Cup and we will be making sure that is safeguarded going into the World Cup because we want to win it.”