Ailing RFU set to cut 25 per cent of staff as Six Nations unions await CVC windfall
England’s Rugby Football Union is proposing cutting 139 jobs, equivalent to a quarter of its workforce, to address the fallout from the coronavirus pandemic.
Cost-cutting is considered necessary with the governing body budgeting for lost revenue of £107 million ($133 million) in the short term and a 20 per cent fall over five years, according to its chief executive Bill Sweeney.
With professional rugby having been suspended since March, the RFU has been particularly impacted by a lack of events at Twickenham stadium, the home of the England team, forcing it to furlough 60 per cent of its staff and reduce salaries less than two years after financial challenges prompted 64 redundancies.
The planned further job cuts are subject to a consultation process to be completed by the end of next month.
Sweeney said yesterday: “Unfortunately, this [cost-cutting to date] is not enough to run a sustainable operation and safeguard our future. Our detailed modelling shows there may be a short-term impact of £107 million in lost revenues and we also know there will be a much longer-term effect.
“We are projecting a four- to five-year recovery with cumulative revenue reductions of around 20 per cent. This is not a short-term cost reduction exercise... the RFU will still stand but the impact of Covid-19 will continue to affect us for many years to come.”
It is anticipated that the cuts will result in a reduction in payments to professional and grassroots rugby and to England players over the coming years.
There is some cause for optimism with the improving health situation expected to enable England’s top-tier Premiership Rugby to resume next month, and for internationals to be held at Twickenham, possibly with limited crowds, this autumn.
However, there is uncertainty over the participation of southern hemisphere teams, and the RFU is still negotiating with English clubs over issues such as player release that would enable home matches to be played on multiple weekends in October and November.
England also have one match, away to Italy, to be played in the unfinished 2020 Six Nations (there are four games to be played overall).
The participating unions (England, Wales, Scotland, Ireland, France and Italy) are set to benefit financially from the acquisition by private equity firm CVC of a 14.5 per cent stake in the top European national teams competition.
Bernard Laporte, the president of the French Rugby Federation, said at the governing body’s annual general meeting at the weekend that negotiations over the deal are concluding and that it will receive €75 million ($84.5 million) over five years.
The agreement, initially valued at £300 million, has been on hold in light of the pandemic, and its impact on the economic climate.
However, with the entry of private equity and finances stretched, the unions may be under greater pressure to agree rights deals with pay-TV broadcasters going forward. Negotiations have been delayed by the health crisis.
Free-to-air broadcasters the BBC and ITV presently share rights to the Six Nations in the UK in a six-year deal that expires after the 2021 tournament.
Meanwhile, Sanzaar, the organiser of the top southern hemisphere competitions, is confident that The Rugby Championship, involving the national teams of South Africa, New Zealand, Australia and Argentina, can yet take place this year.
The national teams tournament was postponed, tours by northern hemisphere countries called off and the Super Rugby clubs competition cancelled in favour of domestic events, as a result of the pandemic.
However, with professional rugby having resumed in many southern hemisphere markets, with crowds in the case of New Zealand, Sanzaar chief executive Andy Marinos is hopeful The Rugby Championship can take place.
He told New Zealand website Stuff: “We remain very positive about that. Obviously the biggest elephant, or anomaly, in the room is what sort of restrictions that could come in. So we always have to be guarded by governments and health authorities around that.
“But we are certainly very positive as a group to deliver a Rugby Championship this year in whichever market we can, where we can get all the teams in and get the competition under way.’’
It is anticipated that the event would be restricted to games in either Australia or New Zealand.
Marinos said: “At this stage we are looking at the back-end of October, into November and probably early December. We need eight weeks in order for us to deliver a TRC.”