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Author Topic: Championship Fear Bankruptcy  (Read 1557 times)

Neils

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Neils

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Re: Championship Fear Bankruptcy
« Reply #1 on: June 03, 2024, 10:49:35 PM »
STATEMENT BY THE CHAMPIONSHIP CLUBS

3rd June 2024

The Championship Clubs have recently been issued with a deadline by the RFU to accept certain terms or effectively be removed from the current professional game structure.

After nearly two years of discussion, which have been characterised by the RFU agreeing positions, sometimes unilaterally or in separate negotiations on the Professional Game Partnership (PGP) ? from which we have been excluded ? we have now been presented with a proposition which we cannot accept as to do so would risk potential bankruptcy for Championship clubs and would also further isolate the Premiership to the detriment of the game in England.

Like anyone who wants to see the game grow, we need to challenge the current RFU position.

To be clear, we have always aspired towards a new Tier 2 league as part of a whole-game solution, but this can only work if there is appropriate governance, a credible and equitable approach to promotion and relegation, and a funding model which will support growth and sustainability.

At present, we are far from that.

The facts are clear:

1/ The incoming RFU executive cut Championship funding in 2019 without warning or any proper explanation from ?645,000 to ?325,000 a year, and again to ?150,000 when the pandemic hit. These cuts forced clubs to appeal to the Government for emergency loans to keep playing rugby and supporting our community activities. The promise to reinstate pre-pandemic funding of ?325,000 was never fulfilled, leaving many of our clubs with significant government debt.

This is in stark contrast to the comprehensive approach the RFU took with regard to Premiership loans and negotiating repayment schedules with the Government.

These funding cuts were neither evidence-based nor a subject for discussion. They came from arbitrary decisions that left the Championship clubs in a precarious position. The clubs have worked hard to maintain standards (highlighted by the creditable performances of many of our clubs in the recent Premiership Cup), but the reality is that the status quo has created existential challenges for clubs in key areas of the country (eg Cornwall. See the recent statement by Cornish Pirates).

The current RFU proposal for 2024 and beyond is ?4m pa, to be shared among a 12-club league.

This is purportedly intended to provide sustainability, to help grow the league and bridge the gap with the Premiership. But it comes nowhere close to achieving that, by our assessment.

An overwhelming percentage of this is value-in-kind (VIK) and would be centrally allocated across various areas. In a spirit of good faith, we continue to debate and discuss the best way to distribute any agreed funds.

By contrast, the cash amount rumoured to be allocated by the RFU to the Premiership in the PGP is ?33m pa to be distributed among 10 clubs, a significant uplift from the previous agreement. 

2/ Promotion and Relegation is an essential feature and underlying principle of sport in this country.

A ?ringfenced? Premiership undermines that principle, and increases the risk that people lose interest in the game. We think that everyone accepts and acknowledges that.

The current proposals include a playoff for promotion from the Championship, but the current and significant imbalance, including highly onerous and mandatory minimum operating standards, precludes any Tier 2 club from being able to participate meaningfully in that playoff, let alone be promoted and be sustainable thereafter.

By way of example, the current ground-capacity requirements would result in expenditure of many millions by a club with no guarantee of promotion and, if they win the league, investment that would have to take place while simultaneously attempting to grow the business.

A more equitable way is through a progressive approach towards achieving a sustainable level, which we have proposed.

The imbalance is further underlined by the fact that the 10th club in the Premiership receives a pro rata share of the ?33m, whereas the promoted club would not access anything like that number, receiving approximately ?125k in comparison.

In stark terms, this is the outcome of these allocation decisions made by the RFU. They are inequitable and set a promoted club up for failure and immediate relegation.

They are also far removed from a whole-game solution. An equitable bridge must be created to enable a promoted club to be competitive.

It is also important to note that the relegated club is entitled to access funds from the RFU and Premiership through its position as a Premiership shareholder. This allows it to maintain a very significant financial advantage over rival Tier 2 clubs and essentially guarantees promotion back, as has happened in 14 of the 16 seasons when promotion occurred. This is unfair and undermines the integrity of the leagues.

We must find a mechanism which allows a relegated club to recover, rebuild and participate in Tier 2 on an equitable basis and, as stated above, to allow the promoted club to participate and prosper in the Premiership.

There is another way forward for professional rugby, and our role within it. That is why there is no choice for us but to challenge the current status quo.

After 20 years of an unfair and broken structure, we have the opportunity to develop a new one.  It would be more affordable and progressive, and which would be in the interests of the whole of the game of rugby union in England.

We have presented such proposals, to no effect so far.

3) Governance.

We do, of course, recognise the need for the RFU to administer the regulatory parts of the game.

For the new Tier 2 League to move forward, it will have a properly constituted and independently-chaired board which has the ability to make decisions to drive forward the commercial programme and overall strategy of the league. However, our clubs still have no meaningful representation on the new body which is to replace the Professional Game Board. This is a significant issue, because it separates the sport and further distances us from Professional Rugby matters.

This cannot be right. We seek that representation.

We understand and support the need to stabilise the top tier of the game, but our clubs must properly be part of the structure.  We have supplied a pathway for 200 players many of whom are now household names (as well as numerous coaches, referees and administrators) to the very top of the game. That pathway must not be lost, because it underpins the game. The only route to that stability and sustainability is for the whole game to move forward together. The PGP is about the next eight years at a time when the game globally and nationally is changing rapidly, so this is a pivotal moment.

If there are not changes now, it will be too late.

During our long negotiations with the RFU and PRL, there is much that has been agreed, such as the driving of minimum standards, but there are major points that have not been properly addressed and, in some cases, ignored.

In the interests of the game in England, and for our own sustainability, we challenge the current proposals.

We continue to seek urgent meetings with the Board to discuss our solutions, which we believe are deliverable and realistic. In that regard, The RFU Council, which is mandated to be guardians of the whole game and meets later this month, should intervene, request a review of our position, and help facilitate a whole-game solution, particularly in the matter of promotion and relegation.
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Neils

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Re: Championship Fear Bankruptcy
« Reply #2 on: June 03, 2024, 10:50:52 PM »

Future of Rugby Championship in the balance as RFU is urged to act

Second tier clubs issue statement complaining about ?inequitable? proposals for promotion and relegation
Daniel Schofield, Deputy Rugby Union Correspondent 3 June 2024 ? 9:03pm


Championship clubs have called on the Rugby Football Union council to intervene in their fraught negotiations with the governing body over the future of the second tier, which is hanging in the balance.

In a statement released on Monday afternoon, the 12 Championship clubs claim to have been issued with an ultimatum to accept an RFU offer or ?effectively be removed from the current professional game structure.? The RFU had hoped to conclude negotiations over the future of the second tier to tie in to the announcement of the new Professional Game Partnership which has been in agreed in principle with Premiership Rugby.

Yet there is still next to no agreement over the fundamental issues of promotion and relegation as well as equitable funding which is why the Championship clubs are calling on an intercession from the RFU Council, which meets on June 14 before an AGM is held three days later.

?The RFU Council, which is mandated to be guardians of the whole game and meets later this month, should intervene, request a review of our position, and help facilitate a whole-game solution, particularly in the matter of promotion and relegation,? the clubs? statement read. ?The Championship clubs have recently been issued with a deadline by the RFU to accept certain terms or effectively be removed from the current professional game structure.

?After nearly two years of discussion, which have been characterised by the RFU agreeing positions, sometimes unilaterally or in separate negotiations on the Professional Game Partnership (PGP) ? from which we have been excluded ? we have now been presented with a proposition which we cannot accept as to do so would risk potential bankruptcy for Championship clubs and would also further isolate the Premiership to the detriment of the game in England.?
RFU ?will be disappointed if Championship clubs disengage?

The RFU responded by saying it would be ?disappointed? if the Championship clubs break off negotiations after years of talks. The RFU has acceded to the clubs? request for self governance as well as seeking outside advice around its strategy. A spokesperson said: ?A paper co-authored by the RFU and the Championship was submitted ahead of the April Council meeting and the Championship clubs and its executive had agreed it would comply with the proposals to work towards a new league structure, competition format and governance model that could be presented to the RFU Council on June 14.

?We will be disappointed if the Championship clubs choose to disengage in the process and will continue to work with key stakeholders ahead of next week?s RFU Council meeting.?

While there has been progress on a number of points, the debate over promotion and funding remains intractable. The Championship claims the RFU?s proposal would mean creating a number of barriers to promotion including a play-off against the bottom placed Premiership team as well as ?highly onerous? minimum operating standards that would result ?in expenditure of many millions.?

Furthermore, they object to the funding arrangements which prevent the promoted club sharing in central revenues while allowing the relegated club to receive a generous parachute payment.

?The imbalance is further underlined by the fact that the 10th club in the Premiership receives a pro-rata share of the ?33 million, whereas the promoted club would not access anything like that number, receiving approximately ?125,000 in comparison,? the clubs? statement continues.

?In stark terms, this is the outcome of these allocation decisions made by the RFU. They are inequitable and set a promoted club up for failure and immediate relegation. They are also far removed from a whole-game solution. An equitable bridge must be created to enable a promoted club to be competitive.?
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COYW15

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Re: Championship Fear Bankruptcy
« Reply #3 on: June 03, 2024, 11:56:51 PM »
My heart sincerely goes out to Nick Johnston and all at Coventry who extended such sympathies to us...

Neils

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Re: Championship Fear Bankruptcy
« Reply #4 on: June 04, 2024, 07:15:13 AM »
My heart sincerely goes out to Nick Johnston and all at Coventry who extended such sympathies to us...

+ a full Baker's Dozen
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WonkyWasp

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Re: Championship Fear Bankruptcy
« Reply #5 on: June 04, 2024, 07:52:07 AM »
Just what I was thinking.

WonkyWasp

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Re: Championship Fear Bankruptcy
« Reply #6 on: June 04, 2024, 07:15:41 PM »
Nerils et al,  and VV,  thank you for keeping this thread going, and for keeping us in touch and up to date.  It makes me feel that somewhere there is still a little ghostly Wasp

westwaleswasp

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Re: Championship Fear Bankruptcy
« Reply #7 on: June 04, 2024, 08:53:21 PM »
Championship club's interest are diametrically opposed to those in the prem. This is inevitable.

Neils

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Re: Championship Fear Bankruptcy
« Reply #8 on: June 05, 2024, 06:54:42 AM »
Nerils et al,  and VV,  thank you for keeping this thread going, and for keeping us in touch and up to date.  It makes me feel that somewhere there is still a little ghostly Wasp

Nerils thanks you. Kind of keeping mild hopes up.
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Shugs

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Re: Championship Fear Bankruptcy
« Reply #9 on: June 05, 2024, 08:11:22 PM »
Shambolic isn?t it. Cov owner seems keen to have a pop at us whenever he can so they can go whistle.

Sliminator

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Re: Championship Fear Bankruptcy
« Reply #10 on: June 06, 2024, 08:21:29 AM »
Cov's owners behaviour aside. This has been the barrier to any of Wasps Worcester and Irish returning as phoenix clubs. Any new owner needed them to go into  administration to clear the debts, but once automatically relegated to the championship, with no chance of return to the premiership, no proper funding of the championship, and should you get to the premiership no guarantee of an equal share of the income. Then they become un-investable hence all the failed takeover bids.

The only real solution is to ditch the premiership shares and the CVC deal, but the turkeys won't vote for Christmas

Garuda

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Re: Championship Fear Bankruptcy
« Reply #11 on: June 06, 2024, 12:02:54 PM »
The only real solution is to ditch the premiership shares and the CVC deal, but the turkeys won't vote for Christmas

Unless, like Rob Baxter & co, you consider half a dozen elite clubs represents a flourishing national sport, English rugby is doomed.

westwaleswasp

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Re: Championship Fear Bankruptcy
« Reply #12 on: June 06, 2024, 04:11:59 PM »
If Wasps come back it will have to be the URC,   prem 2 can frankly go forth and multiply with itself,  as currently proposed.
A future as a feeder club for the prem? Oblivion is better.

COYW15

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Re: Championship Fear Bankruptcy
« Reply #13 on: June 11, 2024, 04:12:48 AM »
If ever evidence was needed about the amateur-state of The Championship right now... former Wasps 9 will be allowed to continue playing for Ealing (in the Championship) while coaching newly promoted Chinnor (in the Championship)

https://x.com/TheRugbyPaper/status/1800143375670354092?t=1-T-HZ2YgSHdxoKErbggTg&s=19.