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