Difficult aftermath of that Ritchie Prem deal
IAN Ritchie must be looking on at the financial ructions at Twickenham with dismay, given that it is only 18 months since he stepped down as the RFU’s chief executive. That consternation will also, no doubt, centre on the part Ritchie played in the negotiation of the whopping £220m Professional Game Agreement (PGA) with the Premiership clubs in 2016 that has played a significant part in the £30.9m operating loss announced this week by the RFU.
Incredibly, this agreement almost trebled the previous eight year funding from 2008-2015, when the RFU paid the clubs £80-90m. The deal Ritchie delivered has given the Premiership clubs a guaranteed £212m from 20162024, with only the remaining £8m dependent on fluctuations in the RFU’s financial fortunes over that period.
It is widely viewed as being a phenomenal deal for Premiership Rugby, especially as it is almost entirely compensation for international player release, but it is looking a lot less rosy for the RFU, which recently made 54 employees redundant in a cost-cutting exercise.
It was unfortunate timing that Ritchie’s decision to retire from his role at the RFU was followed a mere seven months later by his appointment as chairman of Premiership Rugby. While there is nothing illegal about Ritchie moving from one rugby organisation to another – which the RFU also funds – his acceptance of the Premiership Rugby post raised eyebrows everywhere but Twickenham.
There was concern that the RFU management board placed no restrictions on him doing so despite the danger of a perceived conflict of interest.
Martyn Thomas, the former RFU board chairman widely recognised to have won the 2015 World Cup bid for England, said this week: “It is disappointing that an individual who was chief executive of the governing body should accept a leading role with another body directly connected to it.”
Thomas added: “The analogy is when a large number of MPs leave their seats to join companies that previously they were responsible for regulating.”
The image of senior RFU administrators enjoying huge City-scale salaries which are out of kilter with their roles in an organisation in which the only shareholders are clubs – the vast majority of them grass-roots community clubs – was reinforced by a massive payout to Ritchie revealed in the latest accounts.
It showed that he was paid £238,000 for his last two months as chief executive, in salary and notice period payments.
An unavoidable and uncomfortable truth is that this sum would probably have kept four of the RFU full-time community game employees who were made redundant in work for a further year. It might even have afforded them the time to arrange for other employment.
Ritchie might also be concerned that the arguments raging over the RFU’s finances – which led to the resignation a fortnight ago of Steven Brown, his successor and former finance officer – could impact on his four-year legacy at the RFU.
This involved the RFU presiding over the highest profit achieved at a World Cup when they handed over a record £80m guaranteed surplus to RWC 2015, and in addition generated a further £30m profit for themselves and delivered an additional £30m dividend for World Rugby.
It also resulted in the biggest no-show on the field of play by any host nation, when England failed to get out of the pool stages after being beaten by Wales and Australia at Twickenham.
What did not add up at the time, and still does not, is that Ritchie pocketed a salary of £700,000 in 2015, and this included a £100,000 bonus. This, despite the fact that he was directly responsible for the appointment of Stuart Lancaster, whose inexperience as England head coach was laid bare during the tournament.
The RFU cannot afford a salary structure of such fat cat proportions in their upper tier, and yet it seems that Ritchie’s level of remuneration got the silent nod from the management board chairman, Andy Cosslett. The same appears to be the case with Ritchie’s new role at Premiership Rugby.
Another import the RFU cannot afford is the culture of corporate silence, where voices of dissent and criticism are shut down. There was a clumsy attempt at this when RFU Council members voted last week to have Francis Baron, the Union’s chief executive when England won the 2003 World Cup, and former board chairman Graeme Cattermole, relieved of their ‘privileged member’ status.
This is because they decided to analyse the RFU’s accounts, raise persistent questions, and make critical comments publicly about the financial direction of travel in the light of operating losses.
Some of these were more pejorative than some members of the Council cared for, and this led to Baron and Cattermole being punished for a “lack of respect” by being ejected from the 56 strong ‘privileged member’ club and stripped of their access to complimentary tickets and wining and dining hospitality at Twickenham internationals.
Many former senior RFU figures viewed the attempted gagging order with distaste, with one commenting that Twickenham has lost sight of its constitution and mission.
He said: “The RFU was founded as an Industrial Provident Society which exists for the well-being of its membership, with any benefits shared equally among them. Those benefits include ownership of Twickenham Stadium, allocated on the basis of 1,300 clubs with one share each, and a long tradition of debate between members holding differing views. That must not change, and from the outside this decision to punish Baron and Cattermole looks small-minded.”
There are those at the top of the RFU who will not like criticism of Ritchie’s level of remuneration, or their own. However, it’s a free country in which the fundamental tenet of free speech – “I disapprove of what you say, but I will defend to the death your right to say it”– still applies.
“The deal Ritchie delivered gave Premiership clubs a guaranteed £212m from 2016-2024”