Cohen urges reform over second ‘marquee’ player

SOARING wage bills allied to a slump in the sponsorship market contributed to Premiership clubs reporting record losses of £30m for season 2016-17.

The figure exceeds the previous highest combined loss of £24.5m by the 12 Premiership clubs in 2013-14 despite an increase in central funding of £20.5m – up to £68.6m from £48.1m in 2015-16 – which was largely attributable to the new £220m, eight-year deal with the RFU.

Combined turnover hit its highest ever level at £195.8m – up from £187.9m the previous year. However, that was negated by an eight per cent hike in wages to £126.2m.

Worcester sustained the highest individual club deficit of £8.1m, while Harlequins lost £4.7m on a turnover of £20.7m and Wasps, who posted their annual accounts last week, lost £3.7m despite boasting the league’s highest turnover of £33.6m.

Newcastle have still to lodge their accounts, now six weeks late, but Bath, London Irish and Saracens all lost in excess of £2m. Exeter, meanwhile, are the only club in profit having made £1.1m on a turnover of £17.4m during their titlewinning campaign.

Leicester chief executive Simon Cohen believes the fault lies in wages, which he claims are out of kilter with income. Cohen told

TRP: “We have a mechanism for wage restraint in the salary cap, but unfortutogether nately it is based on projected income rather than actual income, and the actual income has been significantly less than the projection. That’s bound to create a shortfall when you’re putting squads at least 18 months in advance of the actual expenditure period.

“A number of issues have arisen: the uncertainty around Brexit meant that sponsorship has become harder to attain and it was also projected that European Rugby would have their full complement of sponsors on board, which, of course, they haven’t managed yet.”

Cohen believes Premiership Rugby’s decision, at the behest of a majority of club owners, to allow two ‘marquee’ players in addition to the salary cap from 2015 was misguided.

He added: “The salary cap can be quite a significant mechanism for limiting wages and, over a period of time, it needs to be in a different proportion to the revenue that’s coming in.

“The second marquee player was a significant factor in wage inflation. You could take away that allowance and put an amount in lieu of it into the cap, which would remove some of the inflationary pressure.”