RFU Warns of Job Losses and Cuts As Crunch Puts 2015 Bid in Doubt
Rugby Football Union is feeling the effects of the recession as ticket sales and hospitality for the upcoming Six Nations slump
The harsh reality of the global economic slowdown struck Twickenham today with the Rugby Football Union's chief executive, Francis Baron, warning of cost cuts and potential job losses as a consequence of sharp falls in corporate hospitality revenue and slow ticket sales for England's home games in the forthcoming Six Nations Championship.
Hospitality sales are currently running at 27% below budget and tickets for all three England matches, against Italy, France and Scotland, are for the first time in years still on public sale eight days before the tournament. Baron fears the RFU will lose a minimum of £10m in revenue in the next financial year and is looking to slash costs by around £6m to soften the significant blow.
The RFU has also instigated a global crisis meeting of CEOs from the top 10 rugby nations to debate a coordinated response to the increasingly pressing financial issues affecting the sport. Baron, furthermore, has reiterated his belief that England will struggle to stage the 2015 World Cup under the current rules which require the hosts to hand over a guaranteed up-front payment of £80m. "Whether we can bid in this current climate is a very finely balanced decision indeed," said Baron, keenly aware the British government are in no position to help out. "It is a big ask for any organization."
The sobering bulletin from Twickenham will come as little surprise to those Premiership clubs already struggling to stay afloat and the implications are potentially grim for all concerned. RFU funding underpins the English game at all levels and the tangible benefits of the World Cup victory of 2003 are still being felt. The union has recorded consistently strong figures in recent years and even reported a profit last November – £1.5m after tax – despite being deprived of its normal autumn international revenue by the 2007 World Cup in France.
Now, with top-priced match tickets costing £83, there are increasing signs that the public are, in Baron's words, "sitting on their wallets at the moment". A slackening of demand was apparent even before the autumn Tests and the RFU management insists England's recent poor results are not to blame for the increasing number of empty seats. "I think it's entirely recession-based," said Baron, acknowledging that the union was already reviewing its ticket-pricing policy for next season. He is still hoping for a late surge in Six Nations sales but accepts that the enlarged 82,000-capacity stadium is unlikely to be full for next weekend's Italy game.
Rival unions with smaller stadiums and populations have potentially even more cause for concern and South Africa's hopes of attracting droves of tourists to watch this summer's Lions tour appear to be waning. Initial estimates of 50,000 Lions fans heading south are being revised sharply downwards and Baron confirmed that the sale of official packages had "slowed dramatically" since Christmas. With no imminent sign of better times ahead, there will be much to contemplate at the global summit Baron is trying to convene within the next six weeks. "As a rugby family hopefully we can come up with some conclusions about the best way forward. It's always dangerous when action taken by one union has a knock-on effect on other unions," he said.
The southern hemisphere nations will advise England that they saw trouble approaching some time ago. Australia and New Zealand scheduled a Bledisloe Cup Test in Hong Kong last year in an effort to push rugby into Asian markets and a follow-up game in Tokyo is in the pipeline. A decision on where the 2015 and 2019 World Cups will be staged is due to be taken in late July. If England do opt to step aside – the RFU is keen to delay its decision as long as possible – the leading European contender could be Italy, who have been assured of government support.
Hospitality sales are currently running at 27% below budget and tickets for all three England matches, against Italy, France and Scotland, are for the first time in years still on public sale eight days before the tournament. Baron fears the RFU will lose a minimum of £10m in revenue in the next financial year and is looking to slash costs by around £6m to soften the significant blow.
The RFU has also instigated a global crisis meeting of CEOs from the top 10 rugby nations to debate a coordinated response to the increasingly pressing financial issues affecting the sport. Baron, furthermore, has reiterated his belief that England will struggle to stage the 2015 World Cup under the current rules which require the hosts to hand over a guaranteed up-front payment of £80m. "Whether we can bid in this current climate is a very finely balanced decision indeed," said Baron, keenly aware the British government are in no position to help out. "It is a big ask for any organization."
The sobering bulletin from Twickenham will come as little surprise to those Premiership clubs already struggling to stay afloat and the implications are potentially grim for all concerned. RFU funding underpins the English game at all levels and the tangible benefits of the World Cup victory of 2003 are still being felt. The union has recorded consistently strong figures in recent years and even reported a profit last November – £1.5m after tax – despite being deprived of its normal autumn international revenue by the 2007 World Cup in France.
Now, with top-priced match tickets costing £83, there are increasing signs that the public are, in Baron's words, "sitting on their wallets at the moment". A slackening of demand was apparent even before the autumn Tests and the RFU management insists England's recent poor results are not to blame for the increasing number of empty seats. "I think it's entirely recession-based," said Baron, acknowledging that the union was already reviewing its ticket-pricing policy for next season. He is still hoping for a late surge in Six Nations sales but accepts that the enlarged 82,000-capacity stadium is unlikely to be full for next weekend's Italy game.
Rival unions with smaller stadiums and populations have potentially even more cause for concern and South Africa's hopes of attracting droves of tourists to watch this summer's Lions tour appear to be waning. Initial estimates of 50,000 Lions fans heading south are being revised sharply downwards and Baron confirmed that the sale of official packages had "slowed dramatically" since Christmas. With no imminent sign of better times ahead, there will be much to contemplate at the global summit Baron is trying to convene within the next six weeks. "As a rugby family hopefully we can come up with some conclusions about the best way forward. It's always dangerous when action taken by one union has a knock-on effect on other unions," he said.
The southern hemisphere nations will advise England that they saw trouble approaching some time ago. Australia and New Zealand scheduled a Bledisloe Cup Test in Hong Kong last year in an effort to push rugby into Asian markets and a follow-up game in Tokyo is in the pipeline. A decision on where the 2015 and 2019 World Cups will be staged is due to be taken in late July. If England do opt to step aside – the RFU is keen to delay its decision as long as possible – the leading European contender could be Italy, who have been assured of government support.
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