Baron calls for PGA deal to be scrapped

Francis Baron believes that the RFU is in serious financial difficulties which will undermine rugby union in England for the foreseeable future unless it takes drastic action.

The former RFU chief executive says this should involve axing the £200 million PGA funding paid currently to the Premiership clubs, and calling an SGM for RFU Member clubs to approve any new PGA agreement.

Baron argues that the RFU's finances have been so badly mismanaged that if the eight-year PGA agreement signed in 2016 is replicated when it is renewed in 2024 the governing body will simply be financially unsustainable.

With the new PGA negotiations well advanced, Baron says that the stakes could not be higher, and because any new PGA agreement will have huge effects on the entire game, it has to be put to an SGM for approval, or rejection, Baron comments: “The game is losing confidence in the RFU Board's management after a series of poor decisions and agreements – and as any new PGA will have enormous ramifications for the whole game it must therefore be put before an SGM for the members to vote on. This is required by best corporate governance practice to which the RFU is committed.”

Concern: Francis Baron by the RFU's member clubs.

This call for an SGM follows The Rugby Paper exclusive three weeks ago when a quarterly report by the RFU's chief financial officer, Sue Day, revealed a huge financial loss of £50 million for the 2022-2024 period.

Based on this information Baron forecasts that between now and the end of 2025 the losses will be a staggering £78 million, and they will highlight the folly of the RFU's deal with corporate equity company CVC over its Six Nations and Autumn international commercial rights.

Baron, who had transformed the RFU's finances from shaky to rock solid when he stood down in 2010 after 12 years as chief executive at Twickenham, has undertaken forensic analysis of the RFU accounts since 2015 due to his deep concerns over its increasingly untenable financial position. These reports and recommendations have been made available by Baron to the Board, and to key RFU administrators, including the former Board chairman, Andy Cosslett and his successor, Tom Ilube.

Virtually all the predictions made in Baron's reports, which were aired in his ‘Baron Files' series in The Rugby Paper two years ago, have proved to be accurate – and it gives his latest analysis chilling credibility.

“The RFU's financial situation is now far worse than it was just eight months ago. Based on the new information in the Day report to Council, I estimate that the RFU will make a cumulative loss from 2022-2025 of £78 million, which will largely wipe out any gain made from the CVC deal.

“Going forward, it means that without massive cost cuts, or the sale of essential assets, there is a real existential threat that the RFU can never make a profit again.”

He adds: “In these circumstances the RFU cannot afford to pay the Premiership clubs anything under the new PGA. Instead, it should revert to World Rugby Regulation 9 for England player release, which is what most other nations rely on.”

Baron contends that the return on investment for English rugby from the RFU's cripplingly costly £200 million PGA funding is negligible.

“Looked at objectively there have been little or no benefits from the £200m PGA which even former chairman Cosslett described as ‘costly',” he said.

“The England team's Six Nations performance has been well below par since 2017 with England coming 5th twice and 4th once, and with Ireland and Wales outperforming England. On balance they were also as successful at World Cups, with neither of them going out in the pool stage as England did in 2015.”

He continues: “The Premiership performance in Europe in the last three years has also declined, while club losses have increased year-on-year.

“Total club losses in the four years pre-Covid were £195 million, while the total debt at Premiership clubs over that period rose from £166 million to £275 million and is now currently believed to be over £350m with Wasps and Worcester forced into administration. This was despite further cash injections from CVC of £200 million to the Premiership, and Government Covid support of at least £59 million.”

Baron says that the damage done by the RFU administration to its own finances, especially those earmarked for the Community game, in order to fund the PGA, has been massive.

“Cuts to the Community game can be seen in the sharply declining numbers of adult male players, and these have been exacerbated by the shrinking numbers of RFU Community staff, rugby coaches and rugby development officers, which are down in total by 50 percent, falling from 255 in 2016 to 132 in 2022.”

He blames this on the RFU abandoning its 50/50 professional-community funding rule to the point where it has now been skewed with 72 per cent going to the Premiership, and only 28 per cent to the Championship, National Leagues and grassroots clubs.

Baron states unequivocally: “The balance of Community funding has to be corrected for the game in England to thrive. Championship funding from the RFU should be restored and augmented from the current £1 million to £4 million annually, with a percentage allocated for facilities investment to prepare clubs for possible promotion.”

He asserts: “Promotion and relegation should also be restored to and from the Premiership and enshrined throughout the league pyramid – and subject to only fair and sensible requirements on facilities.

“This can only be achieved by a return to sound financial and business basics by the RFU. Management is about performance and results – the RFU Board seems to have forgotten that.”