Bristol owner Steve Lansdown insists Premiership Rugby must generate more revenue after describing investment in the English club game as a ‘black hole’.
Sport is reeling from a bleak Wednesday when it was announced the Wasps had announced plans to appoint directors while Worcester were given the 5pm deadline on Monday to prove they have a credible survival plan or risk the suspension of all competitions.
Both clubs are saddled with huge debts and face liquidation orders from HMRC over unpaid taxes, while collectively the 13 Gallagher Premiership teams are valued at over £500million in the Red.
Bristol owes its billionaire owner more than £50million and Lansdown admits getting involved in the sport requires deep pockets, despite an infusion of funds from private equity firm CVC and low-interest loans of government designed to mitigate the fallout of the coronavirus pandemic.
The 72-year-old insists Premiership Rugby, which oversees the operation of the country’s only fully professional league, must do more.
“Rugby is sort of its own worst enemy,” Lansdown told BBC Radio 4’s Today programme.
“It’s a fabulous game that attracts great viewers and fans, but there is a question of revenue in the business.
“Getting people involved in it is a passion. It’s not the one you can point your finger at and say you can invest in it and get a return on your money.
“So you have to go in there with your eyes open, it’s going to be a bit of a black hole for a while and that’s the difficulty.
“We’ve had the funding during the pandemic, but it’s in the form of loans and that’s one of the issues that Worcester is certainly facing.
“When you borrow money, you have to have the ability to pay it back or the ability to know that it will be converted into equity.
“If the funding is free, then that’s more than welcome, but you don’t get anything for nothing in this life.
“The reality is what PRL (Premiership Rugby) needs to do is focus on commercial revenue or generate new revenue and improve the offer we get to attract investors to the sport.”
The pandemic has had a profound impact on the club’s finances and Lansdown also hinted at dissatisfaction with the deal struck with CVC, who in 2018 paid £200million for a 27% share of the Premiership.
“Covid has been a major factor lately, making the problem worse. There just isn’t enough money in the game – that’s the answer,” Lansdown said.
“All clubs derive their income primarily from ticket sales, central income and commercial income.
“Central revenue has declined in recent years due to Covid and the lack of play.
“Matchday revenue has obviously fallen off a cliff with Covid and commercial revenue hasn’t increased.
“We have reached an agreement with CVC, but so far it has been a bit disappointing. Hopefully we will see this improve in the future.