Premiership hit by 'cash crunch'
SPOTLIGHT: A stark report in The Guardian had laid bare the precarious finances of clubs in the English Premiership.
The UK newspaper claims Premiership clubs lost nearly £50million between them in the last financial year with only the leaders, Exeter, recording a profit. Worcester, who came under new ownership earlier in the season, are not included as they were late in filing their accounts with Companies House.
The eye-watering list includes London Irish, the Championship leaders, who are part of the 13-strong Premiership Rugby. The relegated Exiles lost £10.52m in the year to June 2018, more than any other club.
Wasps, whose £32.8m turnover was more than £10m greater than the next highest (Harlequins), lost £9.7m while promoted Bristol lost £7.2m.
The losses of every club were greater than the year before, when Exeter were also the only ones in the black: the Chiefs increased their turnover by more than £3m and recorded a profit of £533,000.
The champions, Saracens, lost nearly £4m, although £48m in loans to the parent company by their owner, Nigel Wray, have been turned into equity and taken off the balance sheet.
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According to The Guardian, only three clubs suffered a drop in turnover (London Irish did not reveal theirs): Bristol, who had been relegated, Wasps, who were down £165,000, and Gloucester, who were £544,000 worse off, largely through a fall in concert income.
Sale’s turnover increased by £89,000 and they were the only one of the regulars in the Premiership with a turnover of less than £10m, down to the club not owning its ground.
Newcastle lost more than £4.2m and the club closest to Exeter were Leicester, the best-supported team in the Premiership, whose loss was £1.18m, up £290,000 on the previous year. Sale was the only other side with losses below £2m (£1.8m).
These figures were a significant reason why the clubs this season collectively agreed to sell a 27% share in Premiership Rugby to the private equity firm CVC in a deal worth £200m.
Each club will reportedly receive £13.5m as part of a sum paid up front by CVC, money that has been earmarked for infrastructure improvements, although some of it is likely to be used to reduce debt.