SL Clubs are deep in the red with huge losses

[Toby Chopra]

10 minutes ago, RigbyLuger said:

I think it's less "brushing off" more "this is how a lot of 'professional' sports clubs are run."

Indeed, the fact that Wigan and whoever else have made a "loss" for years is intrinsically part of their business model - in that they consistently have wealthy backers willing to cover it. 

The only issue is that if these backers dry up or step away, is the club structured in a way that it can smoothly transition to a lower revenue base without going all Bradford on us. 

As long as there's proper planning in place, and the backers provide visibility on the timeline of their support, then there's no reason for it to go wrong. 

[Roughyed Rats]

5 minutes ago, Toby Chopra said:

Indeed, the fact that Wigan and whoever else have made a "loss" for years is intrinsically part of their business model - in that they consistently have wealthy backers willing to cover it. 

The only issue is that if these backers dry up or step away, is the club structured in a way that it can smoothly transition to a lower revenue base without going all Bradford on us. 

As long as there's proper planning in place, and the backers provide visibility on the timeline of their support, then there's no reason for it to go wrong. 

I'd tend to agree if the game was moving in a positive direction. It certainly would negate the need to try and pass this off as a COVID issue.....which it clearly is not.

[Dave T]

40 minutes ago, Roughyed Rats said:

It was an unprecedented event....unlike the persistent operating losses of our 'top' clubs over the last 10-20 years. The likes of Wigan and Saints actually made more losses in the years prior to the pandemic despite record turnover!! Therefore, perhaps we should address the underlying problems of the financial state of the game; as opposed to simply brushing it off as a nothing story. Just a thought.

A quick google scan does suggest that the likes of Saints, Wire, Leeds etc. often post small profits. 

[sweaty craiq]

Did I read Huddersfield are £20m in debt mainly to Ken Davy

[Roughyed Rats]

11 minutes ago, Dave T said:

A quick google scan does suggest that the likes of Saints, Wire, Leeds etc. often post small profits. 

Rather than google, personally I prefer to review full accounts submitted on companies house. These show that Saints have made operational losses every single year since 2005 where they made a small profit of £44,679. 

Edited December 15, 2022 by Roughyed Rats

[whatmichaelsays]

16 minutes ago, sweaty craiq said:

Did I read Huddersfield are £20m in debt mainly to Ken Davy

Anything owed to Davy is a director's loan that will never be called in. What Huddersfield's plan is for life after Davy is a different story, 

Without checking, I'm sure Hull KR will owe plenty to Hudgell that he neither expects nor wants to see back. 

[steve oates]

22 hours ago, Big Picture said:

Tony Collins has interviewed Sean McGuire four times on his Rugby Reloaded podcast.  In the first of those interviews, he stated that in his view the root cause of the chronic lack of money in the game is that with the possible exception of Leeds the traditional pro clubs (including the clubs in SL) are all located in what he described as "smallish, economically disadvantaged towns" in the North of England where the sort of money needed to support major pro sport doesn't exist and therefore they have no access to it.

A few forum members scoff at that. 

I don't scoff at that, I release howls of laughter.

Saints, Wigan and Warrington happen to be based in the same area as Manchester City, Manchester United, Liverpool and Everton.

Take your pick south Lancashire and the highly wealthy north Cheshire area people you have seven big sporting clubs to choose to follow including three cracking famous and successful RL clubs.  And follow them they do.

What nonsense.......

[OriginalMrC]

The title of this thread needs changing. Relatively speaking, in the context of Covid, superleague clubs are in good shape. 

[steve oates]

13 minutes ago, whatmichaelsays said:

Anything owed to Davy is a director's loan that will never be called in. 

Without checking, I'm sure Hull KR will owe plenty to Hudgell that he neither expects nor wants to see back. 

This is how it works, it's a rich owners game same as soccer.......... 

The only difference is we cap our game to make it a level playing field, and we require top clubs to develop players.

We attract some cracking owners, Paul Caddick, Simon Moran etc........

[steve oates]

On 13/12/2022 at 21:44, Big Picture said:

Latest Super League club accounts for 2021 show huge losses with only one making profit

So those of you think that Sean McGuire and I are wrong, read that and then tell me why we're wrong — if you can.

Do you know how Rich such as Paul Caddick or Simon Moran actually are?.

Do you know how many Millions make a Billion.

Do you know how many Multi Millionaires die before they manage to spend their vast wealth?

The "Huge losses" are not at all huge to Caddick or Moran and other SL owners.

Derek Beaumont isn't in their League money wise, buy the salary cap puts him there.

If you want to talk Huge losses try Manchester City....

[steve oates]

On 13/12/2022 at 21:54, RigbyLuger said:

How much of the debt is loans from directors who don't expect to ever get it back?

All of it probably.

Most People on this site must have dreamed in quiet moments of landing a good few £Million, and joining the board of a top RL club or actually buying a small one and steering it up the leagues.

[Stanley30]

2 minutes ago, steve oates said:

All of it probably.

Most People on this site must have dreamed in quiet moments of landing a good few £Million, and joining the board of a top RL club or actually buying a small one and steering it up the leagues.

All the time and then trying to figure out how i can get saints, Wigan and Leeds relegated

[sweaty craiq]

1 hour ago, whatmichaelsays said:

Anything owed to Davy is a director's loan that will never be called in. What Huddersfield's plan is for life after Davy is a different story, 

Without checking, I'm sure Hull KR will owe plenty to Hudgell that he neither expects nor wants to see back. 

Why wouldn’t he convert the loans to shares or even write it off, isn’t there some tax benefits from writing it off??

[Big Picture]

1 hour ago, steve oates said:

Do you know how Rich such as Paul Caddick or Simon Moran actually are?.

Do you know how many Millions make a Billion.

Do you know how many Multi Millionaires die before they manage to spend their vast wealth?

The "Huge losses" are not at all huge to Caddick or Moran and other SL owners.

Derek Beaumont isn't in their League money wise, buy the salary cap puts him there.

If you want to talk Huge losses try Manchester City....

A quick search about Simon Moran suggests that his net worth is in the range of 7-9 million US$, so not huge by any means and nowhere close to how rich the owners big time major pro outfits like Man U, Man City and the rest are.  Another thing about Moran is that although he made his money in the entertainment business, his ownership of Warrington doesn't seem to have helped them expand their reach beyond their existing fanbase.

Another quick search about Paul Caddick suggests that his net worth is something like 300 million US$.  He's not one of the RL followers who typically own RL clubs though, he's an RU man who made his money in construction.  His involvement in RL only came about because the RU and RL clubs in Leeds are under the same ownership.  And Leeds is the one possible exception identified by McGuire to the smallish, economically disadvantaged towns which are the basis of British RL, so it's likely the only traditional RL club would ever interest someone like Caddick.

FYI Manchester City recently reported a record profit of 41 million £, they're not chronic money losers like RL clubs.  Note that @Roughyed Ratsposted above that St Helens (McGuire's former club) have lost money in each the past 16 years and in relation to turnover their losses have indeed been huge.  The losses for their five worst years total 8.73 million £ which is almost 2 million £ more than their record turnover of 6.94 million £, whereas their last profit was less than 45,000 £.  Grim figures indeed.

So laugh all you want, that won't change the fact that McGuire was right about the reason why there's so little money in the game.  I'm still waiting for you or any of the other doubters here to offer even a shred of evidence that he's not.

[Saint Toppy]

2 hours ago, Toby Chopra said:

Indeed, the fact that Wigan and whoever else have made a "loss" for years is intrinsically part of their business model - in that they consistently have wealthy backers willing to cover it. 

The only issue is that if these backers dry up or step away, is the club structured in a way that it can smoothly transition to a lower revenue base without going all Bradford on us. 

As long as there's proper planning in place, and the backers provide visibility on the timeline of their support, then there's no reason for it to go wrong. 

For some clubs that could be more problematic than others. I remember reading some years ago Eamon McManus commenting along these lines and that his business model for the club was that they wouldn't be reliant on just 1 benefactor. To that end all of the Saints Board are multi-millionaires in their own right. Even McManus himself isn't the main benefactor even though he's the Chairman, that honour goes to Mike Coleman who's business is said to be worth well in excess of £1Bn (though his exact wealth is hard to know as its registered overseas and not subject to publishing accounts with Companies Hse)

[Saint Toppy]

3 minutes ago, Big Picture said:

 

So laugh all you want, that won't change the fact that McGuire was right about the reason why there's so little money in the game.  I'm still waiting for you or any of the other doubters here to offer even a shred of evidence that he's not.

There's a reason people should be sceptical about McGuire and his comments. While he was a director of Saints he tried to take full control of the club and force McManus out. Luckily all the other directors backed McManus and it was McGuire who was forced out. A few years later he tried to buy the club again with the backing of a consortium from Ireland, but again the board rejected him.

McGuire is probably still bitter from all this and has an axe to grind, particularly with Saints & Eamon McManus, so any comments made from the guy shouldn't necessarily be taken as fact

[Big Picture]

1 minute ago, Saint Toppy said:

There's a reason people should be sceptical about McGuire and his comments. While he was a director of Saints he tried to take full control of the club and force McManus out. Luckily all the other directors backed McManus and it was McGuire who was forced out. A few years later he tried to buy the club again with the backing of a consortium from Ireland, but again the board rejected him.

McGuire is probably still bitter from all this and has an axe to grind, particularly with Saints & Eamon McManus, so any comments made from the guy shouldn't necessarily be taken as fact

Hmmm, interesting, and yet Tony Collins has interviewed him four times for his podcast so he evidently thinks that McGuire knows something.  And reliance on rich backers who can cover losses is no way to run a pro sports club.

[RP London]

On 14/12/2022 at 11:48, Big Picture said:

Tony Collins has interviewed Sean McGuire four times on his Rugby Reloaded podcast.  In the first of those interviews, he stated that in his view the root cause of the chronic lack of money in the game is that with the possible exception of Leeds the traditional pro clubs (including the clubs in SL) are all located in what he described as "smallish, economically disadvantaged towns" in the North of England where the sort of money needed to support major pro sport doesn't exist and therefore they have no access to it.

A few forum members scoff at that.  However the losses described in the report I linked in my OP and the failure of the World Cup matches played in such towns to get anywhere close to full houses at the bottom-end event prices charged are evidence that McGuire is right about it.

I think you are falling into making a small number of "facts" fit into a hypothesis or finding facts to fit your hypothesis rather than looking at all the facts in the round. 

While I think there is a very fair point to be made about where the sport is played and the size of towns/relative wealth.. the fact is the general "whole" of the game is a major issue and is why IMG have been brought in (whether it is right and it will work is a whole different matter, but the reasoning for bringing them in is important). Its the look and feel of the game from top to bottom, its the connections (as stated by someone else on here) to those communities.. things that have died back since the early 2000s from what i have seen and experienced (and I have mainly only ever lived in Big Cities). 

To say its all about small towns etc.. look at Union with its massive international presence and played in affluent towns and cities and still has clubs going bust for massive amounts and cannot make the club game wash its own face. 

What you are picking out is a small part that doesn't necessarily drive the whole. It is a part that could even be irrelevant once the rest of the image (which can be cantered around the small towns if it wants) can be improved. A lot of those small towns with tradition are close to areas of larger populations etc and people in the UK don't support a club because its a big city (that is often just a coincidence when they do) they support it because they are successful or its the closest club of that sport (which they love) to them.

What we need to do is make the sport something people love and then they attach to the club.. that is where we are fundamentally failing at the moment IMHO, how that changes I don't know but just plonking teams in big cities around the country I can guarantee will not make it work. You MUST change this "love of the game" side of it, and you would need to do that if you just plonked teams in big cities too your not going to just sit on your hands once you've done that surely. But all this extra stuff your going to do "around the big cities" can be done, with a little bit of imagination, around the smaller traditional clubs too and build the game. Its just arguably more sustainable. The game can then grow and develop outside to some of these "imaginary city clubs"  but just dropping them in is not the way to success here. Success, whether city based or small town based, will garner interest from investors, it will.. its the success we need to foster and we CAN do that with what we have we just need to do some work around it, which we have not done for 20 years!

BTW I know you will disagree and its all about the cities for you but no matter how many times you say that, it doesn't mean it is right. I am not sure you really really get the sporting landscape here TBH and again you can say you do till you're blue in the face but I just don't believe you do (using the evidence of posts you make that just dont seem to quite "get it"). We are where we are and we have what we have, we cannot and I emphasise CANNOT just drop teams into cities so we HAVE to work with what we have. Lets do that and be positive with it... We can all think "if we just had xyz" but we don't. 

 

[RP London]

35 minutes ago, Big Picture said:

 

So laugh all you want, that won't change the fact that McGuire was right about the reason why there's so little money in the game.  I'm still waiting for you or any of the other doubters here to offer even a shred of evidence that he's not.

he isnt right about it.. He has a point.. that is all. He has isolated one small set of information and used it.. what he needs to prove his point and be right is to say "oh and here is a big city club who is bringing in all the money etc" and he cannot do that becuase they have been in big cities and fail.. like London, which has a whole plethera of reasons why it doesnt/hasnt worked which is the point I am making... there is always more than one reason. 

RU has just seen a big city team go belly up, they have seen a team in an affluent area go belly up.. the entire Premiership is in trouble and looking ropey with a relaunch needed.. whats their excuse, they are exactly what McGuire is asking for.. 

Edited December 15, 2022 by RP London

[Oxford]

The basic model, the one eternally touted  as the one to aspire to is predicated on success which is why so often it ends up in terminal decline.

The history of RL is one of change based on a united sport or game as a whole where the decisions are not related to individual clubs who have to fend for themselves. Running it in this way means you can dump those whose debts become unmanagable but the sport remains exactly where it is and what it is.

In other news it's not a surprise that clubs are in debt given recent events but it is astounding that they've survived and the debts are so puny.

It is interesting how, in these times of financial rubbish talk, the clubs with smaller debts are not lauded for running their club well.

Hardly a shock given how Wakefield and a few others are portrayed on these very pages.

 

 

Edited December 15, 2022 by Oxford

[Big Picture]

2 minutes ago, RP London said:

he isnt right about it.. He has a point.. that is all. He has isolated one small set of information and used it.. what he needs to prove his point and be right is to say "oh and here is a big city club who is bringing in all the money etc" and he cannot do that becuase they have been in big cities and fail.. like London, which has a whole plethera of reasons why it doesnt/hasnt worked which is the point I am making... there is always more than one reason. 

RU has just seen a big city team go belly up, they have seen a team in an affluent area go belly up.. the entire Premiership is in trouble and looking ropey with a relaunch needed.. whats their excuse, they are exactly what McGuire is asking for.. 

McGuire can't point to a big city club in RL which is bringing in lots of money though, because no such club exists presently.  And the way the game is set up now, no such club will ever exist because the sport doesn't have something to offer which can break through in those cities.

RU may meet what he thinks is needed, but that just shows that he only grasps part of the issue.  RU has a mix of big city clubs and others in smaller places, and the two administrations involve a club in a small town (239th in England by population) and one which tried moving from London to Coventry which evidently didn't work like they hoped it would.

The Rugby Premiership likely overestimated the appeal of their game based on how big things like the Six Nations are and let costs escalate on that account, now they're having to rein themselves in and might have to cut their salary cap further.  Their business model also suffers the same instability as in other sports which have P & R, so naturally they want to move away from that.  I agree that whether they'll succeed is open to question.

I also agree that clubs can't just be plonked down willy-nilly, that wouldn't work either.  Expansion can only work if it's based on a strategy, and with something able to appeal to the big city dwellers who otherwise wouldn't take an interest.  Neither of those ever existed in London's case.

An interesting experiment in trying to grow something organically is the European League of "Football" (i.e., gridiron).  It's a multi-national league but operates at a low financial level where only a handful of North American "franchise players" get paid anything and the others (all Europeans) are unpaid.  They started last year with 8 franchises, grew to 12 and have plans to grow to 24, but whether it will ever amount to more than what it is remains to be seen.

[Oxford]

22 minutes ago, Big Picture said:

The Rugby Premiership likely overestimated the appeal of their game

Surely not!

[Futtocks]

3 hours ago, OriginalMrC said:

The title of this thread needs changing. Relatively speaking, in the context of Covid, superleague clubs are in good shape. 

Editing the title can only be done by the OP or the site moderators. If the OP wants the title to remain on the doom and gloom end of the spectrum, then you'd have to report it and request a less sensationalist title.

[del capo]

2 hours ago, Big Picture said:

A quick search about Simon Moran suggests that his net worth is in the range of 7-9 million US$, so not huge by any means and nowhere close to how rich the owners big time major pro outfits like Man U, Man City and the rest are.  Another thing about Moran is that although he made his money in the entertainment business, his ownership of Warrington doesn't seem to have helped them expand their reach beyond their existing fanbase.

Another quick search about Paul Caddick suggests that his net worth is something like 300 million US$.  He's not one of the RL followers who typically own RL clubs though, he's an RU man who made his money in construction.  His involvement in RL only came about because the RU and RL clubs in Leeds are under the same ownership.  And Leeds is the one possible exception identified by McGuire to the smallish, economically disadvantaged towns which are the basis of British RL, so it's likely the only traditional RL club would ever interest someone like Caddick.

FYI Manchester City recently reported a record profit of 41 million £, they're not chronic money losers like RL clubs.  Note that @Roughyed Ratsposted above that St Helens (McGuire's former club) have lost money in each the past 16 years and in relation to turnover their losses have indeed been huge.  The losses for their five worst years total 8.73 million £ which is almost 2 million £ more than their record turnover of 6.94 million £, whereas their last profit was less than 45,000 £.  Grim figures indeed.

So laugh all you want, that won't change the fact that McGuire was right about the reason why there's so little money in the game.  I'm still waiting for you or any of the other doubters here to offer even a shred of evidence that he's not.

According to last years Sunday Times Rich list Simon Moran was worth £142 million.

Mike Danson major stockholder in Leneghans companies that own Wigan RL in the same list is worth £1.16 billion......

The Saints Board is packed with multi millionaires  - Mcmanus once being described as one of the top financiers in the Asian Pacific.

Our clubs are far more than just toys to these guys. The game is as much in their DNA's as it is in most on these forums..

The very top clubs are in good hands and I fear not. But as for those further down the chain, including those maybe showing a modest loss/even profit - could well be a different story.

[super major]

Surely the point here is not so much attending spectators as attractiveness on tv and increasing such revenue.

In which case the actual games televised are more important than the individual teams