Financial grief puts sport in a sorry state
AFEW days ago, the proposed transfer of the Senegalese footballer Ismaila Sarr from Watford to Aston Villa disappeared down the same hole in the ground as an England team in a penalty shoot-out. Villa were willing to pay £25m, plus “addons”, for a player who is barely a household name in his own household, but walked away empty-handed. That’s football for you.
At precisely the same moment, Worcester Warriors were heading full-tilt towards administration and all the pain it would entail because Her Majesty’s Revenue and Customs, tired of waiting for settlement of a tax bill, had issued a winding up petition. The sum involved? Around £6m, by all accounts – less than a quarter of Sarr’s valuation or, to put it another way, the kind of money you might expect to find down the back of the sofa if the sofa happens to belong to a Premier League-class winger.
Worcester’s entire workforce – players, coaches, conditioning specialists, office staff, cooks, groundsmen, the poor sod who spends his match days dressed up as Maximus the Mascot – could have rested easily in their beds for a fraction of the moolah Villa were prepared to chuck at a bloke who isn’t Cristiano Ronaldo or anything like him. That’s rugby for you, sadly.
Wasps, not exactly unacquainted with the grumpier element at HMRC, are also deep in the financial soup. Again. Last week, they admitted to be being “in dialogue” over unpaid contributions to the public purse. “We have a strong relationship with HMRC,” they said in a statement. That’s one way of putting it.
Without wishing to participate in a pile-on, it is important to add that there are overpoweringly strong rumours of at least one other major club in the same kind of trouble. What, in the name of whatever god you worship, is going on here, given that eight of the 13 top-flight clubs boast average gates in five figures and that it is only four years since CVC Capital Partners, the Luxembourgbased private equity firm, stumped up £200m for a hefty minority shareholding in Premiership Rugby?
Mark Evans has a range of answers to that question, which is not unusual: the former Harlequins chief executive-head coach-whole caboodler has long been one of the clearest-eyed, incisive thinkers on the union game and has never been slow to give us the benefit of his wisdom. Which is intended as a compliment, not a criticism. If there were more people like Evans at the top end of rugby administration, we’d be in a better place.
Asked for his assessment of recent developments, he was bang on the money – or would have been, if the sport he loves actually had any money left. He was tough in his criticism
“It’s preposterous to think CVC stay mute when the future shape of the sport is discussed”
of Premier Rugby’s weak regulatory structures; he tore into the deregulation fundamentalists who believe there is no problem that cannot be solved by simply ignoring the link between revenue and expenditure; and he called for central oversight of club finances, bemoaning the lack of transparency that continues to exasperate so many of us who want to see a thriving domestic club game in England.
Good points, all of them. Especially the one about transparency, which is where CVC come in. Or rather, don’t come in.
We know the extent of their holdings in a variety of union theatres – Premiership, United Rugby Championship, South African Rugby Union, Six Nations – and we know, more or less, the amounts they paid for them. What we don’t know is what they intend to do with all the muscle they’ve bought, because they never seem ready to tell us.
Two years ago, the magazine Rugby World published an interview with Nick Clarry, head of CVC’s sports division. Clarry didn’t say a fat lot, truth be told, but on more than one occasion, he insisted that his company’s involvement was purely as a driver of commercial returns for the sport and would have no voice in sporting or regulatory decisionmaking.
In response, we must borrow a phrase from Evelyn Waugh’s wonderful comic novel Scoop and say: “Up to a point, Lord Copper.” CVC may not call the shots in full public gaze, but a billion dollars’ worth of investment buys a hell of a lot of leverage. It is preposterous to think they stay mute when the future shape of the sport is under discussion.
With the Welsh regions up against a wall – try as we might, it is hard to see how their sums will ever add up and the Premiership clubs burning through all that CVC money with little to show for it but a series of alarming brushes with the tax authorities, the rugby public deserves open and honest answers to some very difficult questions. After all, the public is no less a stakeholder than CVC, or the broadcasters, or the national unions, or, come to that, World Rugby, the non-governing governing body.
In the current climate, with all manner of financial grief ahead of us, it is not in the least alarmist to fear the worst for the 15-man code. As Ernest Hemingway, a contemporary of Waugh’s, once wrote: “How do you go bankrupt? Gradually, then suddenly.”