Representatives of the sixteen clubs in National League One met at Twickenham on Weds 22nd October to discuss proposals put to them by the RFU for restructuring the league with effect from season 2009-10. The Chairman of the RFU Management Board, Martyn Thomas and the RFU’s Chief Executive, Francis Baron attended part of the meeting supported by John Douglas (RFU Management Board member) and Terry Burwell (RFU Tournament & Competitions Director).

 Club representatives had the opportunity to listen to the RFU’s rationale for the proposals, and to question Martyn & Francis about specific parts of the proposals.

Following further discussion after the RFU representatives had left the meeting the clubs emphatically decided by 12 votes to 4 votes to reject the RFU proposals dated 2nd October 2008. However, the clubs agreed that they wished to continue dialogue with the RFU to clarify details and resolve issues so that a way forward can be found that is in the best interests of the clubs and English rugby. Counter-proposals were put to the RFU by the clubs but these were rejected by the RFU Management Board on Wednesday 29th October. The RFU informed FDR that Option 1 of their proposals is their preferred option with a view to introducing the new Championship to start in season 2009-10.  

The NL1 clubs recognise that the RFU is the governing body of the game and has the right to restructure the league in a way that it thinks best suits the needs of English rugby. However it would be foolish in the extreme for the RFU to believe that by forcing through their current proposals and creating the new “Championship” without the support of the majority of the clubs that a second fully professional league will be achieved in the foreseeable future. Most current NL1 clubs simply do not have the resources to contemplate becoming fully professional and even if invited to form the new Championship would not change their status. Indeed it is more than likely that if the RFU pursues this course of action, many clubs will re-appraise their positions. The tremendous developments in playing standards and facilities that have taken place in National League One during the past eight years will be stopped dead in their tracks and many investors and potential investors will have second thoughts about their involvement with rugby union.

Summary of Key Issues

Fixtures – a reduction to 12 clubs means the loss of 4 home league games. The end of the National Trophy in 2008-09 means the loss of further games and guaranteed PRL/sponsors income. A home game generates around £30k to £50k for clubs so there is potential loss of £150k - £200k per club (assuming at least one home cup game) unless suitable replacement fixtures can be arranged.

At present there is no guarantee that the projected new competitions i.e. the Anglo-Welsh Cup; Anglo-Welsh Trophy, and end of season Play-off Tournaments, can be delivered.

Finance - The RFU has a responsibility to help fund the development of the game in partnership with its member clubs in accordance with the objectives set out in the RFU’s Strategic Plan.

NL1 clubs currently receive £1.65 million per year in core funding from the RFU, which is £103,125 per club out of which the clubs pay all referees costs (circa £8k per club) and meet their own player and public liability insurance costs. In addition, the clubs share a total of £400k from the current EDF National Trophy competition. Of this £200k comes from PRL and is shared equally by the clubs. The remaining £200k comes from the EDF sponsorship and is allocated as prize money ranging from £7k for a club knocked out in Round 4 to £32k for the eventual Trophy winners.

The current RFU proposals for restructuring the league (02-10-08) offer funding of £2.3 million. This is an increase of £250,000 on the current total of RFU and cup money (£1.65m + 400K = £2.05 million).  

The RF  The RFU proposes that of their £2.3 million only 67% (£1.54m or £128,333 per club) is paid as core funding in year one and the core amount reduces to £1 million or £83,333 per club by year eight which is PRL money, not RFU funding.   

At present, average playing squad costs in NL1 are circa £750,000. A full time squad of 36 players plus coaching and support staff will cost £900k at average salaries of £25k; £1.08m at £30k or £1.26m at £35k. The current average salary in the Premiership is circa £60k with a proposed squad cap in 2009-10 of £4 million per club.

For some NL1 clubs the move to full professionalism will cost a minimum of £400k extra in year one on playing squad costs alone quite apart from any necessary improvements in infrastructure and facilities. To reach Premiership standards the necessary cost increases will be far greater. There are no guarantees that income levels will rise commensurately. It is projected that at the proposed levels of RFU funding support the cumulative losses per club over a five year period could be as high as £3 million.

Implementation  -  Clubs find it difficult to understand why the RFU is in such a rush to implement the restructuring with effect from 2009-10. The issues highlighted in this paper need to be resolved and this whole process is having a damaging effect on NL1 clubs and also on clubs at Level Three and below who will suffer consequential changes that they were not prepared for at the start of the current season. RFU policy has normally been that no changes to the arrangements for promotion and relegation could be made unless a full season’s notice was given.  Now the RFU is proposing to move the goalposts half-way through this season. NL1 clubs and clubs at lower levels started the season under one set of regulations but are now being told that they could be relegated under new arrangements that were not agreed on 1st September 2008.

Conclusion

If the RFU really wishes to establish a second fully professional league, it should not expect the clubs to meet the costs of such development without significant financial support. 

If this support for the development of the game is not forthcoming from the RFU most NL1 clubs will not be able to contemplate undertaking the changes necessary to achieve fully professional status. Asking most NL1  clubs to accept the current RFU proposals with no confirmed additional fixtures, sponsors or adequate finance in place is asking them to commit financial suicide.