Revealed: Major gulf in funding of top clubs

Premier Rugby Ltd is facing serious questions over the huge differences between the funding provided to its ‘founder’ clubs compared to promoted clubs.
The Rugby Paper has seen evidence that promoted clubs are being handicapped so severely by the unequal funding system, that they receive only 40 per cent of the funding allocated by PRL to most of the established clubs in English rugby’s top league.
In real terms this results in clubs like Bath, Sale, Gloucester, Saracens, London Irish and Worcester receiving funding from PRL and the RFU (in English Qualified Player payments) of around £3.5m yearly, while promoted clubs such as Exeter and London Welsh have to survive initially on as little as £1.4m.
This unequal distribution undermines the financial viability of any club promoted to the top tier, because they struggle to compete in terms of purchasing power.
Apart from the parachute payment paid for a year to any club relegated from the top league, there is also evidence that PRL, the administrative body for the 12-club Premiership, has continued to pay significant funding to former Premiership clubs relegated to the Championship.
This season Bristol, who have been in the Championship for four seasons, and Leeds, who have been in the second tier for three seasons, will each be paid more than £1m by PRL.
The consequences are that the odds are stacked heavily against promoted clubs surviving in the Premiership, with only Exeter and Worcester breaking the mould.
Typically, newcomers battle to find the investment for stadia or infrastructure improvements, such as academies, and they are also outgunned financially in terms of paying premium salaries and bidding for leading players and coaches.
The Premiership Rugby system contrasts starkly with the approach taken in football by the Premier League, where central funding is distributed equally to each participating club, including those which have won promotion.
Among other issues facing PRL is its lack of transparency regarding funding. The detail of the Formula 1-style ‘P Share’ dividend structure for its so-called ‘founder’ clubs is known to no-one outside Premiership Rugby and the beneficiaries. Although it varies, this is believed to entitle them to at least an extra £500,000 yearly.
This inequality in funding could be interpreted as restrictive practice, and therefore subject to a legal challenge.
NICK CAIN