BB Breaking - Announcements

[InBetweenWasp]

Why does the P share exist at all?
Why isn't it simply a case of "if you play in the prem you get a cut of the TV money for that season, otherwise you don't"?

It seems completely ridiculous (not to mention wholly unfair and unworkable) that a club could get promoted to the premiership and not be given a slice of the TV money.

Fair point.  Even worse, a Club that comes up would need to buy P-Shares from another Club.  At current rates, buying those shares is the equivalent to multiple seasons of income.

[wasps]

Why does the P share exist at all?
Why isn't it simply a case of "if you play in the prem you get a cut of the TV money for that season, otherwise you don't"?

It seems completely ridiculous (not to mention wholly unfair and unworkable) that a club could get promoted to the premiership and not be given a slice of the TV money.

Fair point.  Even worse, a Club that comes up would need to buy P-Shares from another Club.  At current rates, buying those shares is the equivalent to multiple seasons of income.

I think I saw £10m mentioned somewhere.
Double the entire players salaries for a year.




TV rights are worth about £35m-40m per year, with 27% going to CVC - about £10m
That leaves £25-£30m to be shared among the clubs.
Let's call it £2.5m each per year.




So, a promoted club steps up to play in the premiership.
I believe they need a P Share club to be down for 2 seasons before they can buy their P Share for £10m.
They then have to wait 4 years before they are a return on they investment.
This promoted club that is punching above their weight has to be in the premiership for 5-6 seasons before they're playing on the same financial footing as the other, bigger premiership clubs.




I now see that there's no need for formal ring fencing... It's already financially ring fenced.


I just wish that I'd understood about the P share previously so that I don't feel that I'm just taking a moral high ground now that it affects me.

[Vespula Vulgaris]

The idea that clubs can't wipe their debt and be free to carry on is ridiculous.

Rugby doesn't make money and so debt has to be got rid of one way or another. Being given a big wad of cash by a sugar daddy who wants to use you as a trophy to show his friends is no more honourable than wiping it through the courts.

In essence it's just reinforcing the idea that business cannot be part of rugby. They aren't making the sport more sustainable, they are making it less.

This feels like a particularly overzealous viewpoint.  I don't think the likes of Nigel Wray, Cecil Duckworth funded their Clubs to use them as trophys to show off to their mates, it was for the love of their Rugby Club.  I've no idea about Lansdown/Craig or how much either have put into Bristol/Bath.

I'm gobsmacked to read you think that deliberately leaving creditors to pick up the tabs of your spending in order for you to be more competitive again is the same as personally funding/writing off debts to a club as a wealthy owner.

I totally agree with you that Rugby is fundamentally broken as a business model and there needs to be some sort of a reset but think that to suggest Clubs should be allowed to rack up a load of debt, then shed it via administration only to phoenix up again is wide of the mark when it comes to be an acceptable way to run a club.

There needs to be some sort of governance/jeopardy to stop this from being done deliberately.

For us, it doesn't seem like this was being done for personal gain or to game the system.  The numbers were just (very) wrong.

My point isn't that phoenixing a company is ethically pure.  It is that forcing clubs into a situation where they can only hope to exist with a super rich benefactor is just as unethical.  Rugby does not make money so either we need to find a way to change that. Wasps have done nothing illegal, and haven't cheated.  And yet our club has vanished.

[Vespula Vulgaris]

I think I saw £10m mentioned somewhere.
Double the entire players salaries for a year.




TV rights are worth about £35m-40m per year, with 27% going to CVC - about £10m
That leaves £25-£30m to be shared among the clubs.
Let's call it £2.5m each per year.




So, a promoted club steps up to play in the premiership.
I believe they need a P Share club to be down for 2 seasons before they can buy their P Share for £10m.
They then have to wait 4 years before they are a return on they investment.
This promoted club that is punching above their weight has to be in the premiership for 5-6 seasons before they're playing on the same financial footing as the other, bigger premiership clubs.




I now see that there's no need for formal ring fencing... It's already financially ring fenced.


I just wish that I'd understood about the P share previously so that I don't feel that I'm just taking a moral high ground now that it affects me.

The money from PRL has halved since Covid hit. I don't think the alleged value of the P-share has halved.

[wasps]

I'm just gonna play fantasy rugby for a moment.


A wealthy rugby fan comes along and accepts relegation, administration and forfeiture of PShare.


They buy the name of the club presumably for a minimal fee, and re-sign all players, coaches and staff.
(Told you this was fantasy land stuff)
This person has now presumably paid out in the region of £6m-£8m.
We're not playing again this season, so there's no income at all on that.


We don't have a stadium so need to find somewhere to play, and next season there's another £6 million+ going out in player, staff, coaches salaries.


Let's say we play that first season and get promoted. (Still fantasy land)
We've probably not earnt anything, cos we don't have any asset, gotta pay rental on a stadium, minimal sponsorship, and no TV money, but we're now £15m-£20m down


Following season we're back in the premiership, at some point we may be able to buy an elusive PShare. Another £10m down, another season or 2 of salaries and player contracts are likely due.


It's very likely that you're £40m+ down, with no assets other than players before you even start trying to get competitive, and with no assets you have no real chance of recovering anything




Administration, loss of all player / staff contracts and relegation would still likely put any club out of business. Removing the PShare is just a final nail to make sure

[Bloke in North Dorset]

If your fantasy owner turned up tomorrow and could demonstrate the resources you’re talking about we could fulfil our fixtures this season. I see no reason why there wouldn’t be any revenue, unless I’ve missed something? Which in all the noise wouldn’t surprise me. 

[Vespula Vulgaris]

If your fantasy owner turned up tomorrow and could demonstrate the resources you’re talking about we could fulfil our fixtures this season. I see no reason why there wouldn’t be any revenue, unless I’ve missed something? Which in all the noise wouldn’t surprise me.

Because Baxter has already decided they need a ten team competition.

[wasps]

While I got carried away with my fantasy scenario, the point I wanted to make at the end is that isn't going into administration, being relegated, instant loss of all player/staff contracts sufficient punishment?


Anyone wanting to buy worcester with ambition of getting back into the premiership in short order would need to lay out many (tens of) millions of pounds that they won't get back.


I don't see that using administration to clear debts and move on as if nothing happened would actually be a real world scenario


So instant forfeit of P Share feels like a double whammy

[NellyWellyWaspy]

Let's assume you came in and bought the name. Said to the players, if you want a contract NEXT season, at £20-£30k only, how many would stay? If some had to be on minimal pay, like per game? So you kept the total costs down to below £1m a year? Other than Ealing, I suspect that is the reality of the Championship. I know the cheats paid full whack, because their owner could afford to drop £5-10m just like that.

But, outside of those already in the Prem, no owner can. That is the reality. Even IF we got back in to the Prem, an owner would have to drop maybe £5m a year for the fun of it for the first 5 years in. Not going to happen in a real world I think.

I think, with 10 clubs, it will be a closed cartel. But, I do not think there are 10 owners prepared to subsidise English rugby to that extent or more, especially as the majority of those remaining will repeatedly vote to up the cap, plus have 2, or maybe 3 marquees. Say goodbye to maybe 5 or 6 more, leaving Bath, Sale, Saracens and Bristol. Quins and Chiefs might be able to keep up, maybe not. We will call them regions. North (Sale), Midlands (laughably, I know, Bath), South West (Bristol) and South East (Saracens). All other teams would be in a semi-pro tier below, associated with those clubs, providing academy prospects and injury cover.

Truly a sad state, but, it is coming.

[Brandnewtorugby]

Another way of seeing hope. I quite liked the idea on Egg Chasers of the teams that have their p share taken starting fresh and forming a new competition and inviting teams to join. Let's imagine say 10 teams!

Worcester, Wasps plus 4 from prem
Ealing, Coventry, Pirates, Yorkshire,

A nice low staff cap, say £2m, worth a season ticket.

[Andywasp50]

Sounds like we’ve uncovered why English rugby is in such a mess then - the P share. Add to it some elitist thinking at clubs like Baxter at Exeter (the irony of Chief’s rise to the prem when it was cheaper not being lost) and you create a Cabal of 10 or less self governing clubs that are impenetrable.

Next will come the scrapping of the cap which will result in further clubs going to the wall because they can’t keep up with the richest sugar daddy pet projects. The remaining championship level clubs will be competing for nothing and developing players for the five or six mega clubs who will drive hard bargains as they strip them of their talent.

In the meantime it’s likely that fear of failure will lead to conservative playing styles which will drive away further fans from an increasingly minority sport. Next step could likely be a club European league.

In short I feel like this is the beginning of English rugby eating itself and decreasing it’s fanbase whilst the RFU just standby and watch and the PRL ceases to exist. This is all without the concussion lawsuit being thrown into the mix.

The only solutions to this I can see is scrapping the P share and setting a limit on overseas players at clubs so they have to have a minimum amount of English players in the match day squad whilst retaining the salary cap.

[westwaleswasp]

Euro club league is the aim, but it will be as popular with the French, Irish and Welsh as a case of genital herpes.
This is what the moneybags clubs don't get. They think it is all about money and that money can buy  what they want. The Irish have money and have a system that suits. The French don't give two fucks about the Heiny, let alone a replacement. The Welsh don't want the URC, let alone Europe. They are also bankrupt nearly.

[Shugs]

The idea that clubs can't wipe their debt and be free to carry on is ridiculous.

Rugby doesn't make money and so debt has to be got rid of one way or another. Being given a big wad of cash by a sugar daddy who wants to use you as a trophy to show his friends is no more honourable than wiping it through the courts.

In essence it's just reinforcing the idea that business cannot be part of rugby. They aren't making the sport more sustainable, they are making it less.

This feels like a particularly overzealous viewpoint.  I don't think the likes of Nigel Wray, Cecil Duckworth funded their Clubs to use them as trophys to show off to their mates, it was for the love of their Rugby Club.  I've no idea about Lansdown/Craig or how much either have put into Bristol/Bath.

I'm gobsmacked to read you think that deliberately leaving creditors to pick up the tabs of your spending in order for you to be more competitive again is the same as personally funding/writing off debts to a club as a wealthy owner.

I totally agree with you that Rugby is fundamentally broken as a business model and there needs to be some sort of a reset but think that to suggest Clubs should be allowed to rack up a load of debt, then shed it via administration only to phoenix up again is wide of the mark when it comes to be an acceptable way to run a club.

There needs to be some sort of governance/jeopardy to stop this from being done deliberately.

For us, it doesn't seem like this was being done for personal gain or to game the system.  The numbers were just (very) wrong.

My point isn't that phoenixing a company is ethically pure.  It is that forcing clubs into a situation where they can only hope to exist with a super rich benefactor is just as unethical.  Rugby does not make money so either we need to find a way to change that. Wasps have done nothing illegal, and haven't cheated.  And yet our club has vanished.

I think you’re absolutely right VV. Forget all the fake hand wringing about fit and proper owners. If you want to own a rugby club the question to you should be are you willing to write large cheques on a regular basis. If not don’t bother as you won’t survive.

[Rugbyintheblood]

Look maybe this is a bit whacky but with Wasps and Cov Rugby playing in the Championship would it make sense to merge? Does that give a better chance of competing with Ealing Trailfinders?

OK OK yes I’m probably still feeling the effects of the anaesthetics!

[Neils]

Look maybe this is a bit whacky but with Wasps and Cov Rugby playing in the Championship would it make sense to merge? Does that give a better chance of competing with Ealing Trailfinders?

OK OK yes I’m probably still feeling the effects of the anaesthetics!

Still not worn off yet?