The Financial Dark Side of Professional Sport

The dark side of sport covers a number of bases; drugs, match fixing, super injunctions…the list goes on. But as the global recession continues to tighten its considerable stranglehold on the economy, stories of professional clubs tapping out are being delivered to our doorsteps with alarming regularity.

Toulon Rugby

Even the most part-time of news consumers will have heard the tragic news of Rugby League club Bradford Bulls who are teetering on the brink of liquidation, or of Rangers football club, whose players may be faced with the daunting prospect of having to leap the hedge to fetch misplaced balls at Brechin City FC next season in the Scottish second division.

Rugby Union has hardly avoided the epidemic: famous French club Bourgoin recently survived liquidation by the skin of its teeth after ‘Le tribunal de commerce de Vienne’ accepted the accounts presented to them by the club’s directors. They may yet still be in trouble if their appeal to the CNSOF (National French Olympic and Sporting Committee) is unsuccessful in overturning the decision of the French Federation to demote them to the French third tier Federale 1.

This is not an uncommon theme in French rugby, where the rich, dissident owners can circumvent the French federation like a cunning Luxembourgian boxing federation. Outspoken Toulon president Mourad Boujellal regularly terrorises the administrators with slanderous comments and abject refusals to respect a salary cap.

Boujellal is an extreme case, but there is no doubting the wealth and power of some of these owners. Where there is money, mercenaries like Sonny Bill Williams and Carl Hayman will come, but this becomes a problem when owners spend rashly and without thorough financial planning, whereupon owners will abruptly file for administration when they realize they can’t honour players’ contracts – as was the case with Bourgoin, whose players lit a fire outside their clubs headquarters in protest this week.

Thankfully the game in the UK has mostly avoided such cold-hearted behaviour from power-hungry club owners. Former London Wasps owner Steve Hayes conducted himself respectfully in his handling of the sale of the club through early planning, and continued financial input until the end of the season. Though you wonder what might have happened had Wasps been relegated and Hayes not been able to find a buyer soon enough: would Wasps have disappeared from the Rugby radar?

You only have to look a little further down the leagues to find examples of dramatic falls from grace.

National League Two North club Rugby Lions look to have landed themselves in the mire after Neil Back, Andy Key and twenty players were forced to leave with wages still outstanding. Owner Mike Aland unveiled ambitious plans to the rugby public last year to turn the club into a Premiership side with a 30,000-seater stadium. Could there have been safeguards put in by the institutions to prevent such behaviour? Could the RFU do more meticulous profiling on potential buyers to ensure they are genuine?

Probably not. Rugby is after all a professional sport and a business. The money has improved the standard of Rugby from the top league all the way down, but this means that players playing as low as National 3 will expect to receive weekly match fees. This can be ruinous if the revenue is not sufficient, and we’ve seen famous old clubs like Waterloo and Orrell slip dramatically down the rugby hierarchy. But that’s business for you and business doesn’t always go to plan as most of Europe will probably agree at the moment.

Can anything be done to make Rugby more financially stable?

By Mike Dolan

5 thoughts on “The Financial Dark Side of Professional Sport

  1. It can be done right, just look at the Exeter model, but that took time and some ruthless planning to achieve. Many people want a quick fix, and that is fine if you just keep chucking money at it, but when the money dries up, that’s when the wheels fall off. However professional sport will continue to supply these disaster stories as long as there is money in it, unless the authorities get really tough. As so many of these leagues are essentially self policing, this isn’t going to happen.

  2. Brian Moore made a good point about this sort of thing in his book – the RFU’s refusal to accept a gentle transition to professionalism made it very difficult for a lot of top clubs to cut it in the new professional game.

    Exeter are a good example of a club that has put a lot of time and hard work into developing their financial standing with cautious developments and slowly building their supporter base. The clubs with the greatest financial strength are those with the strongest supporter base – Northampton, Leicester, Gloucester and Exeter.

  3. Worcester are another, there’s a brilliant piece on them and all that Cecil Duckworth has done in the rugby paper. But then there are so many other falls from grace, Waterloo, West Hartlepool who at one time were in the premiership, Orrel, the list goes on. Equally in other leagues, Nuneton had financial trouble following stadium issues and now after being a strong side in National One, they have dropped to national three.

  4. British rugby hasn’t been immune. London Scottish and Richmond both effectively disappeared overnight as professional clubs. Swansea avoided obligations to their creditors (including players) by going into administration, and Neath did similarly, prior to the creation of the Ospreys. Most English Championship clubs seem to have been through that process too.

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