English clubs to get cash injection at time of crisis for Worcester and Wasps

English rugby top clubs are to receive a much needed £20m cash injection this season thanks to their eight year funding deal with Rugby Football Union but it will only be a temporary relief from mounting debt that has put Worcester Warriors on the brink of financial failure and Wasps struggling to repay a £35m bond.

Under the current Professional Game Agreement, signed in 2016 between Premiership Rugby Limited (PRL) and the RFU, clubs are guaranteed funding from the union each season. For the first four, they received a fixed amount of £25.5m, however, the pandemic had a devastating effect on income which is largely based on RFU revenue from Twickenham matches. As a result of internationals having to be played without crowds, the clubs received less than £10m last year as the Union suffered a loss of more than £20m.

With four England test matches taking place this November – against New Zealand, South Africa Argentina and Japan- the Union’s income will be significantly increased and each Twickenham test match is estimated to generate more than £10m thanks to hospitality sales, tickets revenue and television deal income.

As a result RugbyPass understand the clubs will share around £20m this season – double the figure received last season.

That money will be shared amongst the Premiership clubs with those supplying more players named in the England squad getting a greater slice of the income. While this is welcome news for the clubs, it comes with a warning that income is set to be halved again in 2023 thanks to the Rugby World Cup being staged in France.

The tournament means it will be an English season without four November tests and while the RFU will eventually get a share of profits from the tournament, that figure is unknown.

The RFU and PRL are understood to have started initial negotiations on a new funding agreement to come into place after 2024 when the clubs will be looking for substantial help moving forward. The current eight-year partnership between Twickenham and the Premiership clubs was expected to be worth over £200m and gave national head coach Eddie Jones greater access to players, a later deadline for selection, two additional training camps. The final figure will be well short of £200m when the deal end in two years.

The Premiership clubs are currently operating under a £5m salary cap, designed to restrict losses following the impact of the pandemic with squad sizes being cut to meet that target. An estimated 80 players were left without a contract at the end of last season.