The wheels come off the sweet chariot

How long can the finances of rugby union remain immune to the England team's slide? And how long can the chief executive of the RFU survive?
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The Independent Online

In three days' time, the 13 members of the Rugby Football Union's management board will gather together to try to get to grips with the crisis into which England's abject form has plunged one of the few sports where the country can boast a reigning world champion.

It is a sign of the siege mentality taking hold at headquarters that, last week, an official would not divulge either details of the agenda or where this key meeting was to take place ...even though the RFU's website lists the venue as Twickenham.

It is known that Rob Andrew, the former England fly-half and recently installed elite rugby director, will set out his keenly awaited recommendations on how to fill the gap left by the departure of head coach Andy Robinson, in the wake of the desperately disappointing autumn international results.

Ideas for the longer-term restructuring of the professional game are also likely to be discussed ahead of a consultation document expected next month. And will the meeting also discuss the position of Francis Baron, the governing body's chief executive since October 1998? In the present circumstances, it seems almost unthinkable that it would not.

Baron has endured some sticky moments in his lengthy tenure as the RFU's first chief executive, but none stickier than in these past few weeks. A cacophony of criticism in internet discussion forums and the mainstream media culminated last week in World Cup-winning coach Sir Clive Woodward calling publicly for him to "step aside".

At first glance, it seems deeply ironic that Baron, who joined the RFU from First Choice Holidays, should be in such a pickle. With all the flak flying around, it has been easy in recent weeks to overlook that the English game's fundamental strength remains its financial position. And Baron is the man responsible for that.

Admittedly, last year was a difficult one, with turnover down 4.5 per cent to £83m and operating profit down nearly a third to £16.2m, partly on the back of England's poor playing performance. But this should not detract from the fact that the overall financial picture is in the sort of state most governing bodies could only dream of, with £28m cash, manageable debt and fixed assets -mainly the modern and still-improving Twickenham stadium - of £105m.

"You have got to say that, financially, the RFU has been transformed in the last 10 years," says Mark Evans, chief executive of NEC Harlequins, the Premiership club.

"He [Baron] has done an excellent job for what he was brought in to do - ie, to shore up the finances and get it on a sound commercial footing," says Damian Hopley, chief executive of the Professional Rugby Players' Association, the players' union.

RFU officials are also buoyant about future prospects. Paul Vaughan, business operations director, believes that once the present stadium development is fully open in around a year's time, "we are looking at an addition to operating profit of £7m to £8m". As well as increased capacity, he points out, the £110m development will yield a hotel, a running, health and fitness club adjacent to some affluent areas, and a conference and banqueting facility capable of seating 5,500 people on matchdays.

He argues that margins should also improve, since Twickenham will no longer have to erect marquees to accommodate corporate hospitality customers. As a result, the car park can be returned to being a car park, while the RFU's offices will also move into the stadium, obviating the need to lease commercial office space.

A new television deal will need to be negotiated before 2010, when the present one expires. Yet even here, the RFU is relatively well-placed compared with other sports, since TV money, according to Vaughan, represents only 22 to 25 per cent of overall income. What is more, both TV and live audiences have so far proved relatively resilient in the face of poor results. Out of a universe of nine million English rugby followers, Vaughan believes the BBC can "drive" a Six Nations audience of up to 7.5 million. "That's most of our fans actually watching," he says.

Unfortunately, the state of the sport's finances stands in direct contrast to the results being produced on the pitch. And people are now starting to ask with increasied urgency whether the two are linked. As Hopley puts it, while praising Baron's financial achievements: "In the same breath, you need to look at how rugby decisions are made."

The conclusion, increasingly, is that there is a connection and that it is evident most clearly in the plight of the sport's overworked senior players, who find themselves torn between two cash-hungry masters - their country and their clubs - and have simply wilted under the pressure. There is nothing new about English rugby union's so-called "club versus country" problem. Other sports, in particular football, are also scarred by it. But, after just over a decade of professionalism, it has arguably become more debilitating than ever before.

Two factors make this intensely physical sport more susceptible than others to these damaging tugs of war. First, it is exceptionally "full on". You don't need to be a student of Jonny Wilkinson's medical history to know that injuries are an occupational hazard. An audit compiled over two seasons between 2002 and 2004 showed that each Premiership club suffered an average of 92 injuries a season, with each player spending an average 19 per cent of the calendar year injured. International rugby is even more perilous.

Not only do players risk returning from international duty incapacitated, but the sport is so physically demanding as to limit the number of matches that most individuals can play at maximum effectiveness - to perhaps 20 or 30 a season. By way of comparison, few American footballers would make it past the 20 games-a-season yardstick. And there are no international calls to intensify demands on their physical resources.

The nature of rugby, in short, makes it near impossible to achieve success with overworked players (although, it could be argued, England did just that in the World-Cup winning year of 2003). And, as the financial stakes rise, decision makers from the club and international games are understandably trying to make sure that as many as possible of those 20 to 30 truly effective performances are in their colours.

This physical dimension, of course, also applies to other rugby-playing nations which have navigated through their own "club versus country" minefields with greater success than England. More characteristic of the domestic game here is the balance of financial forces between the top clubs and the RFU. In essence, the finances of the top English clubs have improved markedly in recent years after the chaos of the dawning of professionalism in 1995. This forced clubs to devise new income streams - or find new benefactors - to foot the salary bill.

A report by accountancy firm Saffery Champness, covering the period 2001 to 2004, shows that the aggregate loss made by the Premiership clubs fell from £11.5m to £3.1m. David Lemon, a partner in the firm, thinks that with attendances rising, this progress has continued. With clubs' two biggest costs - stadiums and wages - essentially fixed, he argues, "the increased number of bums on seats means, hopefully, increased profits".

Though Lemon asserts that Premiership rugby now "has the ability to stand on its own feet", these figures suggest that the clubs would be unlikely just yet to risk an all-out schism with Twickenham, by adopting too aggressive a stance in the wrangling over players. Nor, though, would they be likely to accept a solution as skewed to the interests of the international game as that pertaining in cricket, where the county system would simply collapse without the revenues generated by England.

Vaughan puts the sum "invested" by the body in the elite game at £13m in the last financial year, up from £2.8m in 1998-99. "Broadly half" of this went to Premiership rugby to compensate for the release of England players and help fund the academy system. The clubs bridle at any suggestion that this constitutes a subsidy, however. "We don't get any subsidy from the RFU," says Tom Walkinshaw, chairman of Gloucester. "We are the conduit through which money is paid to other parts of the game."

The hope is that discussions next year will begin to resolve this intractable problem. But, as Evans of Harlequins says: "Loads of very intelligent guys had a go at it over the years. The solution in some ways is the easy bit. It's all very easy to do blue-sky thinking, but how are you going to get [from here to] there? I'm not saying you shouldn't strive to get there. I'm saying you wouldn't get there in one bite-sized lump."

The reality is that rugby, like football, will probably have to live with club/country wrangling for the foreseeable future. Cynics would maintain that the phenomenon is, in any case, partly cyclical, with clubs more likely to be accommodating in the run-up to World Cups, but to press for their pound of flesh in the years that follow.

And it isn't just the England team that has encountered problems on the playing side. Walkinshaw at Gloucester accepts there is some merit in the notion that English clubs, after a run of success, are starting to find themselves outgunned in the big European competitions. As a result, he says, a proposal to increase the salary cap applied to Premiership clubs is on the table.

Hopley at the players' union, meanwhile, complains that while top players are overburdened, young English talent is not getting a look in. He quotes a figure suggesting that 23 per cent of English academy players have not played any rugby this season. Walkinshaw begs to differ, arguing that the salary cap forces clubs to blood relatively low-paid youngsters.

Many believe that the sting should have been taken out of the club/ country issue years ago and blame the RFU's unwieldy governance for not achieving that. Former England captain Will Carling's "57 old farts" on the RFU council are down to 54, but are otherwise still there large as life. And while they may include the likes of much-capped England prop Jason Leonard, county representatives maintain a clear majority. The grass-roots game also retains a numerical grip on the management board. "I think the council is too big," says Evans at Harlequins.

"[The RFU] is a union of clubs, so democratic accountability would appear to be needed. On the other hand, in terms of being nimble and quick-witted, you need an empowered executive that can run the organisation."

It follows that much of next year's debate will probably focus on the desirability or otherwise of splitting the decision-making process in the professional game away from its amateur counterpart. Hopley favours a professional-game board with strong player representation. "You need to be realistic about the demarcation of amateur and professional," he says. "There is not enough joined-up thinking between club, country and the players' association."

Will Baron still be there to marshal the debate? An abrasive character, in spite of his patrician mannerisms, he insists that he is staying - although he may find that people have simply grown tired of the sound of his voice.

As always with sport, nothing would dissipate the pressure more quickly than some eye-catching results. However, with experienced observers suggesting that the present generation of players, who came of age under strong figures such as Martin Johnson and Lawrence Dallaglio, simply lack leadership pedigree. The required improvement, it seems, will have to be hard won.

Scrums and stats: The key figures in English rugby union

Rugby Football Union 2005-06 revenue

£82.7m (£84.8m - 2004-05)

RFU 2005-06 operating profit

£16.2m (£23.2m)

RFU 2005-06 cash

£28m (£43.8m)

RFU 2005-06 fixed assets

£105m (£65.8m)

RFU 2005-06 investment in elite rugby

£13m (£11.3m)

RFU 2005-06 investment in community rugby

£14.1m (£9m)

Average top player salary

£65,000 a year

Aggregate loss made by Premiership rugby clubs 2001-02

£11.5m

Aggregate loss made by Premiership rugby clubs 2003-04

£3.1m

Chance of sustaining an injury in a club match (2002-04)

12.5 per cent

Chance of sustaining an injury in an international match

29 per cent

Average attendance at a Premiership rugby match this season

11,000

Average attendance at a Premiership rugby match 1999-2000

5,700

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