You might have been too busy Christmas shopping, or being stranded at Gatwick Airport, but there were two bits of news that leaked last week and neither, on the face of it, looks good for Scottish rugby.
The first news to hit the screens was a bust-up between the English Premier clubs and World Rugby. It’s a little complicated but it revolves around how much and for how long club players are covered by their country’s insurance when on international duty. As things stand the financial limit is £350,000 and time limit is one year.
Premiership Rugby Limited argues that if a player is injured on international duty they should be comprehensively covered, just as they are by the clubs. Moreover, they are willing to back this up by sticking rigidly to Regulation 9 when it comes to releasing players ahead of next year’s Rugby World Cup.
The English clubs are not obliged to release players until the middle of August but Scotland play France on the 17th and 24th of that month meaning Gregor Townsend may have little enough time with his English contingent. Wales have a training camp in Switzerland in July and everyone gets together as soon as possible.
“We will let the players go of course to the World Cup in accordance to Regulation 9 but we are not going to go beyond Regulation 9 if we are being mistreated in the system generally,” said PRL boss Mark McCafferty.
That could mean late starts for Sean Maitland, Duncan Taylor (if he’s fit), Exeter’s Sam Skinner and Stuart Hogg, pictured, with others like Newcastle’s Gary Graham and Byron McGuigan of Sale potentially late arrivals in camp if the English clubs dig their heels in.
The others news that emerged is that CVC Capital Partners injected a whopping £200 million of funds into Premiership Rugby pockets for a reported 27 per cent stake in the business. Given the uneven distribution of Premier Rugby shares, London Irish remain a holder, it is difficult to generalise but it averages out at approximately £15 million per club, which is better than a slap in the face with a wet fish.
The financial injection is supposed to go, not towards player wages, but towards improving and upgrading the clubs’ infrastructures but you might be forgiven for muttering “aye, right” when reading that. Surely the English will blow the windfall on bigger, stronger, faster players from around the globe with another round of wage inflation the inevitable result?
Well, not according to one of the leading player agents in the game. While preferring to speak anonymously, one top London-based agent thinks CVC’s influence will have the opposite effect, wage deflation. It is counter-intuitive but here’s why he might be right.
Firstly CVC have taken a quarter stake in a new business and the first thing any outside investor does is take control of the overheads. Almost all of Premier Rugby’s clubs lose money. The latest figures for 2017/18 show only the Bristol Bears (then in the Championship) and Exeter Chiefs made a profit. The biggest overhead is wages (they account for around 60 per cent of turnover) so with CVC banging the table the clubs might finally take the salary cap seriously.
Furthermore almost every club has significant borrowing, often from a Sugar Daddy, and some owners like Saracens’ long suffering chairman Nigel Wray might like to take a little money out of the game rather than continually feeding an insatiable fire.
The second more important point is the abolition of relegation, which CVC again are desperate to see, in order to ring fence and protect their investment. Relegation is the fuel that feeds wage inflation because clubs are desperate to avoid the drop and all the financial implications that come with it. As of yesterday, six points separate the bottom seven clubs so a lot of Premiership nerves are frayed.
We can expect to see intense lobbying on the subject and if relegation is scrapped, say for three years to begin with, wages will plummet according to our London agent who is, it’s worth remembering, talking down his own best interests.
The Championship could catch up some lost ground on the Premiership, the Pro14 would keep all but their very best players and only France’s Top 14 would continue to drive the very top end of the market.