Report claims seven Premiership clubs are 'balance sheet insolvent'

The lead author of an independent report into Gallagher Premiership clubs’ finances believes concerns will exist “for some time to come” over another team possibly collapsing. Wasps and Worcester went into administration in 2022, while London Irish folded the following year as they all disappeared from the Premiership landscape.

A study compiled by corporate recovery and insolvency firm Leonard Curtis claims that seven Premiership clubs could be classed as balance sheet insolvent – meaning they are reliant on financial support from their owners – with Leicester, Gloucester and Northampton the exceptions.

The 67-page report also examines each club’s financial data across key markers of revenue, total wages, profit/loss, debt, equity and attendances. Harlequins led in terms of revenue earned in 2022/23 with £26.8million, followed by Saracens at £23.2m.

But the report raises concerns over wage-to-revenue ratios, with wages consuming more than three-quarters of revenue at two clubs during that season. All clubs made a loss in 2022/23, with Gloucester the closest to making a profit, losing just over £0.5m. But all of the others lost more than £1m, and the collective figure topped £30m.

The report says that concerns over debt levels and state of balance sheets are “likely to persist” over the next two years and “potentially beyond that”. And while some clubs might break even or turn a small profit in the next two years, it added: “The prospect of the current overall loss-making trend being reversed appears slim at present”.

Lead author Jonathan Dyson told the PA news agency: “I wouldn’t say I was shocked. We have gone into a lot of depth, and clubs have been making losses over a very long period, so it didn’t come as a great surprise. With what happened with Wasps, Worcester and London Irish, nobody in the game wants to see another club disappear from the Premiership.

“Because of what happened, the concerns over whether another club might go the same way will still be there for some time to come. I am not saying that means another club will go, but clearly, because of what happened with those clubs, whether you are a fan, an owner, a broadcaster, sponsor, that will always be in the back of people’s minds.

“We are not trying to have a go at the game at all, we are just presenting the state of the game financially at the moment. Only time will tell whether the clubs are able to drive the revenues and also reduce the wage bills and other costs in order to either break even or make a profit.

"There certainly seems to be a lot of collective will. There is cause for optimism. The product on the pitch is really good, the owners are still dedicated to the game, and it is certainly not only English rugby that is suffering these sort of financial challenges.”

Expert panellists involved in the report included former Saracens boss Mark Evans and ex-Scotland international Simon Danielli, who works in private equity. Premiership Rugby, which has declined to comment on the report, appointed Nigel Boardman to lead a review into club finances two years ago, while a financial monitoring panel was also established and is in operation this season.

Premiership sponsorship has increased by 50 per cent since 2022, the PA news agency understands, and last season’s Premiership final between Bath and Northampton attracted a peak television audience of 1.25m. Clubs have also signed a long-term professional game partnership with the Rugby Football Union that will be worth £3.3m per club annually across the next four years.