Walkinshaw follows the pay-cut route

The cash crisis: Kingsholm is full to the rafters, the team are top of the league and still the sums do not add up

It is as well Gloucester are having a season to remember. Had they been bottom of the Zurich Premiership rather than at the top, they might have expected a date with crisis management. They got it anyway at Kingsholm, where an aura of invincibility is matched only by the air of uncertainty.

Tom Walkinshaw's drive and money have taken Gloucester from the back row of the grid to pole position, but there is a danger of the operation stalling. On Wednesday evening Walkinshaw addressed his squad and "invited'' them to contemplate a pay cut along the lines of the Saracens example.

Players receiving up to £45,000 would take a five per cent reduction; those above would see their income reduced by 10 per cent. One of the players suggested they organise a car-boot sale to help Walkinshaw's cash-flow problems. Awaiting the fickle finger of fiscal fate, it helps to have a sense of humour.

Gloucester are citing a shortfall in central funding from the Rugby Football Union and a legal wrangle with a sponsor who signed up at the beginning of the season but then withdrew. The appropriately named Lost Boys, a Dutch company, have been involved with Walkin- shaw's Formula One racing team Arrows, who have gone into liquidation. Though the rugby deal with the Lost Boys went pear-shaped, the club struck a jersey sponsorship with a company called Baan, who chose to go with Gloucester rather than Wolverhampton Wanderers.

They have had a terrific run for their £400,000, with the Cherry and Whites leading the Premiership almost from week one, and reaching the semi-finals of the Powergen Cup. The only setback has come in the Heineken Cup, but Kingsholm has been overflowing for every match.

Despite this, cuts have already been made, with several players released, and there was considerable ill-feeling when the ticket-office manager was abruptly made redundant in September. She was one of the longest-serving employees, and her dismissal represents a saving of £15,000 a year. The ticket-office staff walked out in sympathy.

The players, who will meet Walkinshaw again this week, are bemused. "Far from being inclined to take a cut, they feel they have delivered,'' said one insider. "They would like a lot more information. On the face of it everything should be rosy.''

The tone was set at Red Rose headquarters at Twickenham last Monday when Francis Baron, chief executive of the RFU, followed the fashion of the City by issuing a profits warning. After reporting a healthy surplus last year, Baron predicted the RFU would slide into the red, principally because the World Cup in Australia will preclude England's money-spinning autumn internationals.

''It's not just the clubs feeling the pinch, the national unions are feeling it too,'' Baron said. "We are all in the same boat and I see no prospect of a recovery before 2004. It is down to everyone to cut their coat according to their cloth.''

This is the new mantra, but not everybody will be walking around in a waistcoat. "Wages are too high for the conditions in which the industry finds itself,'' Peter Wheeler, chief executive of Leicester, said.

The majority of players earn less than £50,000. Some – and this is down to owners who have more money than taste – earn more than the Prime Minister. In any case, there is supposed to be a salary cap per club of £1.8 million.

"I'm trying not to lose money in this damn game and it's the biggest challenge I've faced in business,'' Brian Kennedy, the owner of Sale, said. "The commercial model for professional rugby doesn't work. As long as benefactors are willing to pump money in there isn't a problem, but we are trying to create a business that doesn't rely on the whim of a sugar daddy.''

Malcolm Pearce, Bristol's benefactor, has said he will withdraw at the end of the season. "He's spent a personal fortune and it's very, very sad,'' Kennedy added. "I dread to think what will happen if a few others come to the end of their tether. I've embarked on a journey and I intend to finish it. Whether I'm able to do so is another matter.''

The time is right for the clubs to recruit, carefully, from the academies and abandon the expensive and short-sighted policy of hiring from abroad. "When it's a matter of survival costs will go down,'' Peter Thorburn, the Bristol coach, said. "Developing young players will benefit the clubs and English rugby in general. There's a certain amount of nervousness here and my biggest worry is that if the future isn't sorted reasonably soon it will have a detrimental effect on the players. I think we have the potential to be as good as anyone in the country.''

What particularly frustrates Sale and Bristol is their inability to get more bums on seats, yet most clubs are heartened by the response of the public. "Considering our position in the league we are doing very well,'' Malcolm Ball, marketing director of London Irish, said. "We expect our average gate next season to rise to 10,000. Finding sponsors is difficult, but the man in the street still has money to buy a ticket.'' In the last two years the Irish have sold 50,000 jerseys at £50 a time.

The bad news is that Ball left the club on Friday in what he describes as an amicable arrangement. The longest-serving commercial manager in pro rugby, he began with Sale in 1997 and worked with Richmond before joining the Exiles. When he began his four-year stint with the Irish they were playing before crowds of 3,800 at Sunbury, and the move to the Madejski Stadium in Reading has paid off.

Similarly, Wasps are delighted by their move from Loftus Road to High Wycombe, where they have enjoyed a 29 per cent growth in season-ticket sales and a 24 per cent increase in gate receipts.

''We are on a sound footing and within the next couple of years we expect to become a viable proposition,'' says Alistair McLean, their chief executive. Having worked with a blue-chip company like Mars, he might have expected a lot of work and very little rest and play in his new job, but McLean has been pleasantly surprised. "There will be salary reviews but everything will be done on its merits,'' McLean said. Wasps have an option for a third year at Adams Park and will make a decision next season. "Overall, the graph just keeps going up and up.''

As for Gloucester, who play Saracens at Watford today, the timing of Walkinshaw's cloth-cutting exercise could hardly be worse, but it illustrates the seriousness of Gloucester's financial predicament. Tough negotiations are in prospect, for players in and out of contract. Thank goodness, then, that Gloucester are having a successful season.