Rugby pays for reluctance to tackle football dominance, says finance expert

Rugby union’s reluctance to tackle football’s commercial dominance has contributed to the crises that have gripped Premiership clubs Wasps and Worcester, according to a sports finance expert.

Both teams have been suspended from the Gallagher Premiership, with Wasps earlier withdrawing from this weekend’s game against Exeter and announcing it was “likely” they would enter administration.

Kieran Maguire, a lecturer at the University of Liverpool Management School, believes sport has been slow to respond to address the issues it is facing.

“Rugby is still a relatively new professional sport and is done in a amateurish way in many aspects of cash flow, cost control and governance, all those boring words that get accountants upset,” he told the PA news agency.

“I know rugby fans would be upset at rugby being called a minority sport, but football is too successful. It takes too many centimeters of column and too much focus of the sender because it delivers in terms of eyeballs.

“That’s a challenge – how does rugby increase its revenue streams and control costs? I think there’s a reluctance to address that.

“So trying to find a solution is a real challenge. I think rugby will always be there but at the level of spending I’m not convinced it can continue as it has in the past.”

Worcester have been suspended from the Premiership for the remainder of this season, with relegation following the club’s partial liquidation.

Wasps Holdings Limited recently confirmed that a second letter of intent to appoint administrators had been filed and revealed talks with potential investors were at a “relatively advanced stage” given a £2million unpaid liquidation order from HM Revenue and Customs VAT

Mike Ashley, the former owner of Newcastle United Football Club, is said to be one of those prospects.

Wasps are also required to repay a £35million bond that had helped fund the club’s move to Coventry in 2014.

Maguire said Premiership clubs had historically treated Rugby Football Union “like mum and dad’s bank” but found revenue had fallen as governing body profits from flagship events like the Six Nations slumped amid the Covid -19 pandemic had collapsed.

“There is an element of wishful thinking when clubs forecast their future financial position,” he added.

“And then that doesn’t materialize and leaves a void. With many clubs there doesn’t seem to be a sustainable perspective because the ambition is to win things and to be successful and that costs money. Rugby pays for reluctance to tackle football dominance, says finance expert

Fry Electronics Team

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