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Sir Kevin Sinfield

Furlough extension

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The government have extended the furlough scheme to October. What impact will this have on Rugby League?

I can see Championship and League 1 clubs been more in favour of scrapping the 2020 season and leaving all their players and staff on furlough for the duration of the scheme.

Some Super League clubs may even be in favour of this, but that would mean giving up the Sky money, so I think most will want to play.

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Won't it depend on how much the government supports the scheme after August 1? If it's 50% then I can't see lower division clubs being able to top that up with no income.


"I am the avenging angel; I come with wings unfurled, I come with claws extended from halfway round the world. I am the God Almighty, I am the howling wind. I care not for your family; I care not for your kin. I come in search of terror, though terror is my own; I come in search of vengeance for crimes and crimes unknown. I care not for your children, I care not for your wives, I care not for your country, I care not for your lives." - (c) Jim Boyes - "The Avenging Angel"

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18 minutes ago, tim2 said:

Won't it depend on how much the government supports the scheme after August 1? If it's 50% then I can't see lower division clubs being able to top that up with no income.

SL clubs will be hit even harder, if it is 50% contibution from the employer's any SL club up to the SC max will be in the region of £2M plus the extra on the marquee player's, so 50% of the figure up to and if next season starts in Feb for 7 months, could finish some off.

PS it will also effect those Championship clubs who pay accumalative a high wage bill will also be feeling it.

If we don't start till again till next year it us now a whole new ball game. 

Edited by Harry Stottle

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1 hour ago, Sir Kevin Sinfield said:

I can see Championship and League 1 clubs been more in favour of scrapping the 2020 season and leaving all their players and staff on furlough for the duration of the scheme.

As I said Kev, those Championship clubs who have speculated on amassing a team to challenge for promotion and have Full Time player's will not want to scrap the season they will still have to pay them till any resumption happens. Effectively a SL club recieves the money from Sky to pay the vast amount of the player's salaries, Championship clubs don't get funding anywhere near the same amount and proportionately could have more liabilities.

Edited by Harry Stottle

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4 hours ago, Sir Kevin Sinfield said:

The government have extended the furlough scheme to October. What impact will this have on Rugby League?

I can see Championship and League 1 clubs been more in favour of scrapping the 2020 season and leaving all their players and staff on furlough for the duration of the scheme.

Some Super League clubs may even be in favour of this, but that would mean giving up the Sky money, so I think most will want to play.

Yes, I think it does bring the scrapping of Championship and L1 a lot closer. I suspect the only reason they haven't hit the switch on any of that is that the RFL rightly would want to make a 'whole sport' announcement where the plans for all tiers are announced simultaneously. The top end Championship clubs would be left exposed by cancellation though, due to higher contractual commitments, even after agreed wage reductions, so they will need to a be a priority in accessing the bailout. That's what its there for as far as I can see - preventing collapse.

For SL, it doesn't really help. Any solution that doesn't include finishing the season in some shape or form will cause such a catastrophic financial hit that the RFL will have to go back to the government and ask for more. Despite the problems and costs of testing, biosecure venues etc, I suspect that will still end up happening.

        

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26 minutes ago, Toby Chopra said:

Yes, I think it does bring the scrapping of Championship and L1 a lot closer. I suspect the only reason they haven't hit the switch on any of that is that the RFL rightly would want to make a 'whole sport' announcement where the plans for all tiers are announced simultaneously. The top end Championship clubs would be left exposed by cancellation though, due to higher contractual commitments, even after agreed wage reductions, so they will need to a be a priority in accessing the bailout. That's what its there for as far as I can see - preventing collapse.

For SL, it doesn't really help. Any solution that doesn't include finishing the season in some shape or form will cause such a catastrophic financial hit that the RFL will have to go back to the government and ask for more. Despite the problems and costs of testing, biosecure venues etc, I suspect that will still end up happening.

        

Players will have to accept significant wage reductions if the season is abandoned, possibly to the level the government are contributing as clubs have no income. I believe the government loan money is specifically not allowed to be spent on wages.

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1 hour ago, scotchy1 said:

Its going to collapse. 

There wasnt even really a plan for L1 past next season anyway. 

We need to be sure that the government money isnt just spent keeping clubs alive until next year or 2022, only to then see them collapse. 

The reconstruction is the important part. 

That's the danger, but who is going to make the call not to give any club the 'loan' money if they say they need it?

So who should the money go to or reversed who should not get the money, realistically it shouldn't go to any club who operates at a loss, it is the RFL who are the organisation responsible for paying the 'loan' back to the government, so whichever club they pass money onto the club should be able to prove to the RFL that they will be able to repay it in a given period.

There will be quite a number of Championship clubs that couldn't and a few SL clubs especially those who dice with relegation each year, I should imagine no SL funding will definatley mean no payback, this should not be a reason to abandon P&R it would be like rewarding a club(s) because they are a loss making organisation. 

 

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1 hour ago, scotchy1 said:

Its going to collapse. 

There wasnt even really a plan for L1 past next season anyway. 

We need to be sure that the government money isnt just spent keeping clubs alive until next year or 2022, only to then see them collapse. 

The reconstruction is the important part. 

As far as I can see it though, it's the biggest clubs that are most at rick of collapse, because they have liabilites that simply can't be met if there's no play.

L1 is fine, it's easy for them to mothball, both the Welsh clubs and Coventry have come out and said they'll be fine, and you can see a path to stability for most of the others. Same for the lower reaches the Championship. 

Superleague and the top end of the championship risk total collapse - with the game's major assets at risk. I agree that the money should be spent with the future in mind, but surely that future involves most, if not all of the top dozen or so English clubs?  

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2 hours ago, Toby Chopra said:

Yes, I think it does bring the scrapping of Championship and L1 a lot closer. I suspect the only reason they haven't hit the switch on any of that is that the RFL rightly would want to make a 'whole sport' announcement where the plans for all tiers are announced simultaneously. The top end Championship clubs would be left exposed by cancellation though, due to higher contractual commitments, even after agreed wage reductions, so they will need to a be a priority in accessing the bailout. That's what its there for as far as I can see - preventing collapse.

        

Let's hope Beaumont isn't allowed to get his grubby hands on the loan, given his track record of honouring commitments

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The government loan WAS to keep clubs alive , the sensible thing for all clubs to do is to furlough all full time staff including players 

There will be no lower tier RL played this year , therefore no P and R 

There might be a small shortened SL competition at the end of the year 

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30 minutes ago, DoubleD said:

Let's hope Beaumont isn't allowed to get his grubby hands on the loan, given his track record of honouring commitments

Leigh Centurions will get whatever their fair share of the loan , just like everybody else 

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22 minutes ago, scotchy1 said:

I think its easy to say, let them mothball, but what state are they coming back to? The Welsh clubs and Coventry are fine and probably will be ok, Newcastle, Hunslet, Keighley, Doncaster, Workington? 

And even if they could mothball, why are we mothballing to bring them back for a year before L1 maybe disappears or changes significantly?

With regards to the championship clubs. There is now a fundamental, fatal, flaw in the semi-pro business model. Even if they can survive this season as a write off. What about if fans can't attend next year? There is no way they can survive that. 

There is a big difference between a temporary cash flow issue, at say Leeds, where there is a strong underlying business temporarily halted, and where a lot of clubs are where there are still, clear structural problems with their business model, a model that may not even be possible anymore. 

Also, lets question what we are saving. Many club's business is nothing more than the 25 men in their squad. They have few brick and mortar assets. They have little to lose. 

The game has a blank slate opportunity right now. It needs to see where it wants to be and move towards it and invest in that direction. 

The biggest mistake it could make is to throw money at recreating where we were. That might mean some stuff decisions and unpalatable changes but its absolutely necessary. 

As I say though, I think when this plays out, it won't be the small semi pro clubs that take much of the money but the Superleague and those right on the cusp. It won't be Hunslet, Keighley, Doncaster, Workington etc. If you're just 25 semi pro guys and a rental agreement then mothballing is easy. Whether they should get central money in future is another question, but as far as the emergency loan goes, I don't actually think there's a mismatch here.

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6 minutes ago, GUBRATS said:

The government loan WAS to keep clubs alive , the sensible thing for all clubs to do is to furlough all full time staff including players 

There will be no lower tier RL played this year , therefore no P and R 

There might be a small shortened SL competition at the end of the year 

I agree. I said at the start of all this that the priority for all clubs should be to cut all costs, with player wages being a huge part of that. Since then the furlough scheme was announced which has helped clubs tremendously. Its a bit rubbish to all concerned who have their wages cut but the survival of clubs is paramount. If clubs don't survive then a players lucrative contract will count for nothing anyway and will be worth diddly squat.

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6 hours ago, Harry Stottle said:

That's the danger, but who is going to make the call not to give any club the 'loan' money if they say they need it?

So who should the money go to or reversed who should not get the money, realistically it shouldn't go to any club who operates at a loss, it is the RFL who are the organisation responsible for paying the 'loan' back to the government, so whichever club they pass money onto the club should be able to prove to the RFL that they will be able to repay it in a given period.

There will be quite a number of Championship clubs that couldn't and a few SL clubs especially those who dice with relegation each year, I should imagine no SL funding will definatley mean no payback, this should not be a reason to abandon P&R it would be like rewarding a club(s) because they are a loss making organisation. 

 

Not many clubs operate at a profit, many rely on their owners to fund them, so on your premise there'd only a handful of clubs getting the loan money.

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10 hours ago, PhilCarrington said:

Not many clubs operate at a profit, many rely on their owners to fund them, so on your premise there'd only a handful of clubs getting the loan money.

Yes I understand that Phil, but do you reckon that the RFL could stand any number of debts the clubs can't refund to repay?

Yes on the premise that it is the wealthy owners who stand losses and fund clubs, surely they understand that any money they recieve will have to be payed back in due course, on the other hand if they are a club who lives on the funding they recieve at whatever level how are they ever going to pay it back, it will be a 'Robbing Peter to pay Paul' scenario.

The RFL have ongoing commitments to meet, the organisation is far from flushed with money, I wouldn't be surprised if they do a due diligence on each club who requests a loan, in fact it would not be beyond question to ask the board/owners of the clubs to formally commit to paying it back.

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16 hours ago, scotchy1 said:

RLs problem has never been it spends too much, its that it brings nowhere near enough in. Spending even less and bringing in even less is going to exacerbate the problems the game already faces 

But isn't that the crux that befalls any individual, family, buisness, organisation and yes sporting clubs that in pursuit of betterment they spend what they haven't got, in doing so it is asking for problems..

If any club, which happens to be every club is bringing in less, they will have to spend less baring having a very wealthy benefactor who can afford it, and also as I have eluded to in the previous posts taking on a 'loan' could make the problem even worse.

The longer this goes on the worse it will get, player's coming of contract will be let go, player's with longer contract's can't hang around if there is nothing in the coffers to pay them, then there will be a queue for breach payments.

If the government's relaxation rules backfire and there is a 'second wave' it could cause devastation to RL in this country, the professional side of the sport will be teetering on a presipice of survival or perish.

Incidentally and quite relevant considering the clubs west of the pennines, only in the last 24hrs the Mayor's of Manchester (Burnham) and Merseyside (Rotherham) noting that in the North West cases are not falling in fact there were more new cases in the region than anywhere else in the country last week, as of yesterday there are 23,000 confirmed recorded in the region, the Mayor's have jointly wrote to the PM to publish figures denoting the 'R' factor for each region of the UK, as what may be applicable to sparsely populated area's could be wrong advise for densely populated area's.

 

Edited by Harry Stottle

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18 hours ago, Toby Chopra said:

As far as I can see it though, it's the biggest clubs that are most at rick of collapse, because they have liabilites that simply can't be met if there's no play.

L1 is fine, it's easy for them to mothball, both the Welsh clubs and Coventry have come out and said they'll be fine, and you can see a path to stability for most of the others. Same for the lower reaches the Championship. 

Superleague and the top end of the championship risk total collapse - with the game's major assets at risk. I agree that the money should be spent with the future in mind, but surely that future involves most, if not all of the top dozen or so English clubs?  

What's interesting here is that the Crusaders certainly and possibly the Raiders and Coventry are pay for play, not contract payments. I wonder how many of the Championship and other L1 clubs that come through this will move to this method which was normal in the game up to the mid eighties.

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Can't see Divs 2 and 3 coming back until fans are allowed to watch.  Unlike $uperleague, there's no TV money so they'd only have costs and no revenue.


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