Just a few short weeks after selling the wicketenham naming rights to Allianz in a lucrative transaction worth over £100 million, the Rugby Football Union has decided to lay off more than forty members of its roster.
The staff was notified on Monday afternoon that as a result of a significant reorganisation, there will be a total of 64 positions that are at risk, and 22 new positions will be established. It is anticipated that the reduction will have an impact on all departments, with the exception of those that focus on elite performance. The Rugby Football Union (RFU) made public its new Professional Game Partnership with Premiership Rugby last week. The partnership will cost the RFU around £264 million over the course of eight years.
The RFU is facing growing expenditures as a result of the PGP, which enables Steve Borthwick, the England head coach, to give out up to 25 enhanced contracts for £160,000 each. The Alleanz arrangement helped the union’s finances, but the PGP is costing the RFU more money. The Rugby Football Union (RFU) is also preparing for a large expenditure on the modernisation of Twickenham beginning in 2027. The RFU claims that “rising utilities, travel, and operating costs” have had an impact on it.
Inflation, a fall in broadcast revenues (the most current accounts reveal a loss of £16 million in annual television and sponsorship revenues), and consumer confidence were also listed as causes for the cuts by the union. Both of these factors contributed to the reductions. The Six Nations reached an agreement in 2021 to sell a portion of their commercial profits to CVC for a total of 365 million pounds. Although it is estimated that the RFU will get £19 million annually from the arrangement, the RFU has not seen the increase in television earnings that was anticipated.
The RFU’s December financials revealed a difficult condition as it recovers from COVID. It reported a £6.3 million loss to reserves for the fiscal year ending June 2023, with outgoing CFO Sue Day stating, “We are currently forecasting a circa £5 million ongoing deficit in our underlying profit/loss to reserves position.”
Day wrote: “Given our strong cash position, we can deal with this in the short term to protect rugby investment, but it is unsustainable in the long run.” This year, we will collaborate with other critical institutions in the system to address the RFU gap and the English rugby environment as a whole.
The RFU made over 100 redundancies in July 2020 as a result of the pandemic’s £145 million financial loss. Prior to that, 2018 saw over 60 job cutbacks. According to former CEO Stephen Brown, the £220 million Professional Game Agreement, which came before last week’s deal, and the £30 million excess on the refurbished East Stand were to blame.
“The RFU has started a collective consultation over proposals to reshape and resize the organisation to maintain investment in rugby,” an RFU spokesperson said of the latest cuts. The restructure occurs as the RFU moves forward with the Men’s Professional Game Partnership, Community Game Future, Digital Transformation, Women and Girls, and Stadium Masterplan initiatives.
Along with the need to restructure to enable change, inflation and the overall economic outlook have increased utility, travel, and business operating expenses, while broadcast revenues and consumer confidence are predicted to fall.
“The RFU will maintain headcount and investment in community rugby, and the ideas will have no impact on England Men, Red Roses, or pathway performance teams. The RFU aims to eliminate 42 positions, put 64 at risk, and add 22.
“The primary changes to head office activities will be centralised digital and technology leadership, customer service integration, and optimising company operations. The plans should be finalised in late October.
Following the rejection of Qatar’s alluring offer by rugby’s international power brokers, London is the frontrunner to host the 2026 Nations Championship finals.
The Six Nations and Sanzaar unions were in private talks with Qatar about hosting the first four rounds of the biennial championship in Doha for £800 million.
elsewhere,”You might have three matches [at Twickenham], two elsewhere, and one elsewhere in London,” RFU CEO Bill Sweeney said. Since Qatar opted to do so, there have been ongoing discussions over that natural destination. The other European venues are viable, but London is a strong contender.”