Western Daily Press (Saturday)
Club could ‘go out of business’
Covid-19 rules mean we might run out of cash in 6 months, says Gloucester chief
GLOUCESTER Rugby chief executive Lance Bradley has warned that the 147-year-old club will go out of business within six months without a government bail-out.
Speaking to the Daily Telegraph, Bradley revealed that the club will run out of cash before March following a predicted loss of revenue of £6.2 million due to the restrictions imposed by the Covid-19 epidemic.
The chief executives of all the Premiership clubs were due to hold an emergency conference call yesterday to discuss the issues facing them, but Premiership Rugby fears that this week’s decision by the Government to extend the ban on supporters at stadiums until the end of March will lead to combined losses of revenue of £120 million.
The Rugby Football Union has forecast losses of £138 million if no supporters can attend England matches at Twickenham during the autumn series and Six Nations Championship and a further loss of £86 million for the community game.
The situation is even bleaker for the Championship clubs, including Hartpury RFC, who cannot afford to start their season if supporters are not allowed in. Club owners were to hold a key meeting yesterday, with sources indicating their entire season may have to be “mothballed” - which could leave relegated Saracens stuck in English rugby’s second tier for two years.
Below that, the National League season will not start before January 2021 at the earliest.
Bill Sweeney, RFU chief executive, and his Premiership Rugby counterpart Darren Childs, met Oliver Dowden, Culture Secretary, on Tuesday to ask for government financial support, and Bradley insists professional rugby in England cannot survive without a bail-out.
“I don’t know if the Government understands how serious this is,” Bradley, pictured, told the Telegraph. “We’ve just been through our numbers this morning and the impact of no fans for six months is a loss of £6.2 million. The finance people have done the cash-flow forecast and we will run out of money in the next six months. We won’t be able to survive with no fans until March, unless there’s an intervention. And we’re by no means the worst. There are probably half a dozen clubs in more difficult positions than us and they will go out of business, too.
“This is not an awkward situation or one in which we are going to have to trim things a bit. This is the end of the road for professional rugby in this country, if there is no intervention.”
It is forecast Gloucester will lose £7.4 million in revenue over the next six months, offset by £1.2 million of reduced costs. The club has spent £35,000 on measures to enable up to 8,000 supporters to attend matches while remaining socially distanced, following a successful pilot in which 1,000 fans attended their match against
Harlequins this month. During the first lockdown, the club furloughed all but seven employees, made up of 150 full-time staff and 200 casuals, while six were made redundant. All staff, including the players, took a pay cut of 25 per cent, but the club still lost £5 million.
“When we went into the lockdown, we had cash reserves of £3 million,” added Bradley. “That was all burned. We had to take loans and the shareholders had to put in a substantial amount as well. As a business, rugby was quite fragile before all this and what’s so frustrating is that even with the difficulties that we’ve had, we were on course to start generating cash next year. We had got the business into a much more sustainable state. But we can’t survive a blow of £6.2 million.”