It may take years to re­cover from chill­ing im­pact of RFU cuts

The Daily Telegraph - Business - - Sport Rugby Union - Gavin Mairs Chief Rugby Cor­re­spon­dent by Jeff Black­ett, the new pres­i­dent.

The dev­as­tat­ing news that 139 mem­bers of staff at the Rugby Foot­ball Union are to lose their jobs will have sent a chill wind across the game that will be felt way be­yond the walls of Twick­en­ham and may take the game years to re­cover from.

Five years ago the RFU was pre­par­ing to host the World Cup in Eng­land, bring­ing with it the prom­ise of a re­ward so lu­cra­tive it would fu­ture-proof fund­ing for the grass-roots game for a gen­er­a­tion. Those heady days are long gone.

On Mon­day, the union was forced to an­nounce its sec­ond re­dun­dancy pro­gramme in two years amid pro­jec­tions that £107mil­lion of rev­enue may be lost be­cause of the lock­down.

Two years ago the cuts were a re­sult of over­spend­ing and a cool­ing of spon­sor­ship and broad­cast mar­kets. Now, hav­ing just re­cov­ered from the trauma of that re­dun­dancy pro­gramme in which more than 60 jobs were lost, the or­gan­i­sa­tion is brac­ing it­self for los­ing an­other quar­ter of its work­force and fears it will take up to five years to re­cover.

Un­like the 2018 cuts, no ar­eas will be ring-fenced, with the bud­get for the se­nior Eng­land men’s squad also in jeop­ardy. Also un­like those cuts, it is hard to see the union re­main­ing in its present struc­ture.

The RFU’s fi­nan­cial lifeblood is the in­ter­na­tional matches at Twick­en­ham. The in­come from broad­cast­ing, spon­sor­ship, tick­ets and hos­pi­tal­ity are all de­pen­dent on th­ese matches go­ing ahead in front of full sta­di­ums.

With games al­ready lost to the lock­down, and un­cer­tainty about the au­tumn Test sched­ule and whether it will be pos­si­ble to have even a re­duced-ca­pac­ity crowd, the weak­ness of that busi­ness model has been ex­posed.

Bill Sweeney, the RFU chief ex­ec­u­tive, has been left with lit­tle al­ter­na­tive than to im­ple­ment change as he at­tempts to find a way through th­ese un­prece­dented times hav­ing only just passed his first an­niver­sary in the post.

Sweeney at least can draw on sim­i­lar ex­pe­ri­ences when he took charge of the Bri­tish Olympic As­so­ci­a­tion in 2013. It was fac­ing sim­i­larly alarm­ing struc­tural fi­nan­cial prob­lems and within two years had posted record pro­fits.

At the BOA, Sweeney was able to use his com­mer­cial nous to grow rev­enues while re­duc­ing costs. Per­form­ing a sim­i­lar over­haul will be so much more dif­fi­cult now, given the over­all im­pact of the lock­down on the econ­omy.

To min­imise the im­pact of the job losses, Sweeney has pri­ori­tised three 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.

But to do so inevitably re­quires fund­ing to be redi­rected from other ar­eas and be­hind the scenes a va­ri­ety of mea­sures have al­ready been taken.

At the RFU’s coun­cil meet­ing last month, the body’s com­mu­nity game board ap­proved sev­eral steps in­clud­ing a re­duc­tion in the in­vest­ment of the All Schools and uni­ver­si­ties work pro­grammes, the sus­pen­sion in the ring-fenc­ing of fund­ing for on­shore and off­shore travel, the sus­pen­sion of fund­ing into “as­pi­ra­tional teams and county cham­pi­onships”, the re­duc­tion in planned work with 14 to 18-yearold play­ers, women’s and girls’ rugby, age-grade and ed­u­ca­tion de­vel­op­ment work, and the sus­pen­sion of in­vest­ment into sev­ens and Rugby X.

The in­sol­vency reg­u­la­tions work­ing group is look­ing at rec­om­men­da­tions that in­clude en­hanced fi­nan­cial mon­i­tor­ing to iden­tify clubs in fi­nan­cial dis­tress. Seven­teen clubs have been iden­ti­fied as at “real risk” and may re­quire en­hanced sup­port.

There is no ex­pec­ta­tion of an im­me­di­ate mass cri­sis but con­cern is in­creas­ing around player re­ten­tion and rev­enue streams, which has led to spend­ing be­ing redi­rected to cre­ate a “club sup­port fund” to help se­cure the de­liv­ery of ser­vices.

The first phase of the RFU’s com­mu­nity sup­port loans scheme has al­ready made pay­ments of £656,000 to 51 clubs. A sec­ond phase of awards may be re­quired, while 224 clubs have also re­ceived sup­port from the Sport Eng­land emer­gency re­lief fund. The con­stituency bod­ies’ im­me­di­ate sup­port fund has also paid out £264,000 to 195 clubs.

The one up­side to this cri­sis has been an in­creas­ing sense of ca­ma­raderie as the union and clubs roll up their sleeves in a com­mon fight for sur­vival.

Even RFU coun­cil mem­bers are shar­ing the pain. De­spite vot­ing against any re­duc­tion in their en­ti­tle­ments last year, when the gov­ern­ing body faced bud­get cuts of up to 20 per cent, it is un­der­stood mem­bers have agreed to a 30 per cent re­duc­tion to their ex­pense bud­get for at­tend­ing matches. Ticket en­ti­tle­ments have also been sus­pended as part of an


Fi­nan­cial lifeblood: The Rugby Foot­ball Union’s main source of in­come, from in­ter­na­tional matches at Twick­en­ham, has been di­min­ished

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