Investing in English club rugby is like a black hole – Steve Lansdown

Bristol owner Steve Lansdown insists Premiership Rugby must generate more revenue after describing investment in the English club game as a “black hole”.

The sport is recovering from a bleak Wednesday when it was announced that the Wasps had given notice of their intention to appoint administrators, while Worcester was given a Monday 5pm deadline to show they have a credible plan for survival or face suspension from all competitions.

Both clubs are saddled with huge debts and subject to winding-up orders from HMRC due to unpaid taxes, while together Gallagher’s 13 Premiership teams are believed to be in excess of £500m in the red.

Bristol owes more than £50m to its billionaire owner and Lansdown admits getting involved in the sport takes a lot of money, despite a cash injection from private equity firm CVC and low-interest loans from the government designed to soften the fallout from the coronavirus pandemic. .

The 72-year-old insists Premiership Rugby, which oversees the running of the country’s only fully professional league, must do more.

“Rugby is in a way its own worst enemy,” Lansdown told BBC Radio 4’s Today programme.

“It’s a fabulous game and attracts great viewers and fans, but there is a question of revenue in the business.

“For people to invest in this, it is a passion. It’s not one you can point to and say you can invest in it and get a return on your money.

“So you have to go in with your eyes open because it’s going to be a little black hole for a while and that’s the difficulty.

“We had the funding during the pandemic, but it’s in the form of loans and that’s one of the issues Worcester is certainly facing.

“When you borrow money, you have to have the ability to pay it back or the ability to know that it will become capital.

The Wasps are one of the most successful clubs in England (David Davies/PA)

“If funding is free, then it’s more than welcome, but in this life you don’t get anything for nothing.

“The reality is that what PRL (Premiership Rugby) needs to do is focus on commercial revenue or generate new revenue and improve the offer we receive to attract investors to the sport.”

The pandemic has had a profound impact on the club’s finances and Lansdown also hinted at his displeasure at the deal struck with CVC, who in 2018 paid £200m for a 27 per cent stake in the Premiership.

“Covid has been a major factor of late, exacerbating the problem. There’s just not enough money in the game, that’s the answer,” Lansdown said.

Worcester faces suspension from all competitions on Monday

Worcester faces suspension from all competitions on Monday (Nigel French/PA)

“All clubs derive their revenue primarily through ticket sales, core revenue and commercial revenue.

“Central revenue has been down in recent years due to Covid and lack of play.

“Trade revenue obviously fell off a cliff with Covid and trading revenue has not recovered.

“We had the CVC deal, but to date it’s been a bit disappointing. Hopefully that will improve in the future.”

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