Iain Morrison: SRU's Worcester bid faces several hurdles
It was back in October that Scottish Rugby boss Mark Dodson and his right-hand man Dominic McKay took a close look at Worcester Warriors' Sixways Stadium. They chose a Wednesday, the players' day off, in a bid to get in and out of the joint incognito. Sadly they forgot about those doing rehab and while most Worcester players wouldn't know Dodson from the postman, there are a couple of Scottish internationals at the Midlands club who, not unreasonably, questioned Scottish Rugby's interest in Sixways. The rest of us have been wondering the same ever since.
It is easy to see what attracted Dodson, pictured, to Sixways. The team itself may be a little ordinary but the facility is excellent, boasting a 4G pitch surrounded by stands with an 11,500 capacity. It sits on extensive land, with ten training pitches and a large car park, all situated a couple of hundred yards off junction 6 of the M5. In other circumstances the land alone would be worth tens of millions of pounds, but it is designated for sport and the sports club it is designated to is losing money hand over fist.
Worcester Warriors have never made a profit. Instead they lose approximately £4m every year. A couple of the Aviva clubs make money but overall the 12 clubs that make up England’s Premiership lost £30m last year alone. This is the business that Dodson wants to hitch his wagon to, so it’s not exactly a blue chip investment.
It is understood that a new company would be set up to buy Worcester and their all-important “P-shares” which entitle the club a share of the Premiership pie. The new entity would be 51 per cent owned by Scottish Rugby with the remainder financed by other interested parties, if they can be found, although it appears that this may not be enough to circumvent European Professional Club Rugby’s (EPCR) rule preventing any one body controlling two clubs in its competitions.
EPCR recently barred Montpellier’s owner Mohed Altrad from buying a controlling stake in Gloucester Rugby and we understand that Scottish Rugby’s bid for Worcester Warriors looks doomed for the very same reason.
However, if Murrayfield do somehow triumph, they will presumably fill Worcester with Scottish players and likely forfeit the RFU’s £800,000 grant for producing English qualified players. So the £4m annual deficit becomes £4.8m, or even £5m if the RFU withhold academy funding too.
That Worcester can be better managed is not in doubt, but to manage it £5m more efficiently is a big ask (51 per cent of this sum if Murrayfield find partners to take on the remaining 49 per cent) especially when marketing a “Scottish” club in he heartland of English rugby.
Dodson is thought to believe that the Aviva Premiership has huge upside potential, will overtake the Top 14 in terms of financial strength and that the only way to compete with Premiership wages is to become a Premiership club; judge for yourself whether this sort of deal comes under his remit. He may be taken in by the marketing hype. Aviva clubs lost all seven Champions Cup ties last weekend, but my back-of-a-fag-packet comparison with football makes English rugby look undervalued.
Since signing on with BT Sport the Aviva has seen television audiences jump by approximately 50 per cent and crowds are healthy, with an average Aviva match now watched by 15,000 fans.
That is well below the 35,000 average that Premier League football attracts, but then you consider the relative television deals. Premier League football earns £1.7 billion per annum (split between 20 teams). The number for Premiership Rugby is around £38m. So a growing, family friendly league that attracts 42 per cent of football’s fans is paid just two per cent of football’s television revenue.
Dodson wants to join England’s Premiership but the current television deal with BT Sport runs to 2021 so he somehow has to fund Worcester for the next four years with goodness knows what damage to Murrayfield’s finances. Much of the increase in TV revenues post 2021 will anyway be consumed by a similar spike in players’ wages.
Those are the financial problems and they don’t take into account the regulatory or even the philosophical hurdles that Dodson needs to surmount with the RFU, Premiership Rugby Ltd, EPCR and even the Scottish Council (representing the clubs) all needing to be satisfied. The chances of it happening are Rizla slim but were Dodson’s audacious gamble to come off it would undoubtedly be a game changer, although not necessarily in the way that he believes.