RFU to cut quarter of staff
Impact of Covid-19 will be felt for years to come, says Sweeney Premiership clubs braced for steep decline in funding
The Rugby Football Union has revealed plans to make 139 staff, around a quarter of its workforce, redundant in the face of a predicted £107million shortfall in revenue. Bill Sweeney, the RFU’s chief executive, predicted revenue to drop by a fifth in the long term and said no area of operations would be protected from the cuts.
The Rugby Football Union plans to make 139 people, almost a quarter of its staff, redundant in the face of a predicted £107 million shortfall in revenue.
The savage scale of the cuts reflects how even the sport’s richest union has been brought to its knees by the coronavirus crisis, with chief executive Bill Sweeney predicting revenue to drop by a fifth in the long term.
A consultation process for the redundancies among the RFU’s 580 staff has begun and the results will be announced by the end of next month. No area, including the England elite men’s group headed by Eddie Jones, or the women’s game, will be ring-fenced from the cutbacks.
The RFU had already furloughed 60 per cent of its staff and implemented wide-ranging pay cuts, which have extended to Sweeney and Jones. However, Sweeney made clear that these measures alone would not safeguard the RFU’s long-term future and wholesale restructuring was required.
“Unfortunately, this is not enough to run a sustainable operation and safeguard our future,” Sweeney said. “We need to maintain our organisation for the long term, this is not a short-term cost reduction exercise, the RFU will still stand, but the impact of Covid-19 will continue to affect us for many years to come.
“The long-term financial challenges are significant for the whole economy. We, like many rugby clubs, rely on revenue from matches and events at Twickenham Stadium and we reinvest this revenue back into the game.
“Our detailed scenario modelling shows there may be a short-term impact of £107million in lost revenues and we also know there will be a much longer-term effect. We are projecting a four-to-five-year recovery with cumulative revenue reductions of around 20 per cent. We are having to make difficult decisions on what we can continue to invest in as well as what is the right size and shape of our business for the future.
“To ensure we have a sustainable RFU we have announced to colleagues that it is proposed that the total number of roles across the organisation will reduce by 139.”
In the consultation process, Sweeney has promised to prioritise three key areas: the community game, the performance arena (including the elite men’s and women’s teams) and introducing rugby union at junior level, with a particular emphasis on increasing diversity.
In the last round of cuts in 2018, the RFU made 64 positions redundant after posting an operating loss of £24.4 million. Although the English union returned to profitability in 2019, it was already on course to make a loss this year before the coronavirus pandemic struck.
Savings will need to be made in other areas, too. The agreement for England men’s players’ match fees, which amount to £25,000 a game, has ended. Negotiations are ongoing, but the new rate is expected to be significantly lower.
Premiership clubs are bracing themselves for a steep decline in the central funding they receive from the RFU through the Professional Game Agreement. The first four years of the deal, agreed in 2016, guaranteed an annual payment of £29 million, but the remaining four years are now tied to the RFU’s revenues.
The Premiership is close to finalising the remainder of its 2019-20 season, which would include three rounds of midweek games. With an agreed resumption date of Aug 15, Premiership Rugby did not have enough free weekends to complete its nine remaining rounds and play-offs. Rather than choose to potentially forfeit television money by losing three rounds, it intends to stage midweek matches in the weeks beginning Aug 24, Sept 7 and 21.
This will prompt significant concerns over player welfare. Exeter Chiefs, Northampton Saints and Saracens, who have qualified for the Champions Cup knockout stages, could end up playing nine times in six weeks. This would include playing a Premiership game between the Champions Cup quarter-finals and semi-finals.