As Harlequins and Saracens count the cost of professionalism, Chris Hewett examines the fall-out from two years of madhouse economics.
Earlier this week, Harlequins ended months of patient negotiation by confirming Zinzan Brooke, the great All Black No 8, as their big-name signing for next season. They intend to pay him a reported pounds 350,000 over the next two years, so it was just a little rich to hear Guy Williams, the Londoners' financial director, call yesterday for the introduction of a salary cap.
Even more astonishingly, Williams singled out his own club's spiralling expenditure on foreign talent as symptomatic of the wider financial difficulties hovering over England's leading professional clubs. "Players know their power in demanding higher salaries and it is out of control," he said. "It is detrimental to English rugby and there has to be a reappraisal in order to put in place a salary structure to cover all four home unions. Otherwise we will reach a situation where clubs in the First and Second Divisions will suffer greatly."
Williams' fears were echoed by Nigel Wray of Saracens, although the owner of the Watford-based club approached the issue from a different angle by blaming his balance-sheet problems on the number of matches sardined into a chaotic fixture list.
"I have lost millions through my involvement," he said. "The top clubs are being forced to shut down on nine lucrative weekends to accommodate four pre-Christmas internationals and the Five Nations' Championship, which is crazy. A professional sport cannot limp along like this; the major investors will not pump in money season after season if club games are going to be disrupted."
Both clubs are not alone in their discomfort. One recent estimate put the combined operating losses of England's top-flight clubs at pounds 15m and although all but a couple have managed to attract substantial sugar-daddy investment, there are disturbing signs that the novelty is beginning to wear off.
Harlequins have lost their original "fat cat", John Beckwith, after only a single season's involvement. Beckwith, who pumped pounds 3m into the Stoop last year, has sold his share of the club to Duncan Saville, an Australian businessman, although he retains a 10 per cent interest. Saville, who has invested an extra pounds 1m, now owns 39 per cent of Quins, with the outstanding 51 per cent in the hands of the trustees.
The new deal will ease the worries of a club which shelled out pounds 1.5m in wages and lost a seven-figure sum last season, but Williams, a chartered accountant, believes there is urgent need for action on a united front. "The potential from rugby is huge, but not instantaneous," he said. "The overheads are instantaneous, however. If, for example, Newcastle make a big purchase, this has a rippling effect down to other clubs."
Newcastle, who sent the money-go-round spinning off the face of the earth by signing another New Zealander, Va'aiga Tuigamala, on a Brooke-sized contract midway through last season, are unlikely to be impressed by Williams' plea for a salary cap. Sir John Hall, the Geordies' fiercely independent owner, is convinced that hard cash will bring tangible rewards.
But he may well support Wray's push for a revamped fixture list loaded in favour of the professional clubs. Wray wants to limit England's pre- Christmas activity to two internationals and backs a shorter, sharper Five Nations format.
"The fixture schedule does not give us a level playing field and without a club system, there is no basis for investment," he said. "But I believe we could be in a healthy position in five years if we get the right leadership."Reuse content