Francis Baron has called for the RFU Council to insist that the RFU Board puts a moratorium on the current PGP negotiations being undertaken by its chief executive Bill Sweeney, which is reportedly worth £296 million to the 10 remaining Premiership clubs.
Baron, a former RFU chief executive with outstanding fiscal credentials, says it is crucial that the brakes are put on a potentially ruinous financial transaction: “We have had four clubs go bust in the past year, three from the Premiership, and the Championship title-holders. The Premiership is clearly a broken model, and unless you have a viable business structure, the Premiership is not investable. Yet, the RFU is about to put almost £300m into a Premiership PGP deal in which there is no recovery plan visible.”
Baron said ahead of Friday’s Council meeting at Twickenham: “Based on the Board’s own financial forecasts, this is totally unaffordable. In addition, it does not have the support of the Championship clubs, the National Leagues clubs, and probably the majority of the county-elected Council members who represent the whole (community club) game.”
Baron described the proposed PGP (Professional Game Partnership ) as “putting the cart before the horse”. He said: “This is like making a huge payment for the ‘solution’ before identifying the ‘problems’ that have to be solved. The RFU and PRL (Premiership) have massive financial problems – as has been shown by the RFU’s latest forecasts, and the loss of three Premiership clubs to insolvency.”
Baron believes that Council members must therefore demand the presentation of financial turnaround plans for Pre- miership rugby, and for the RFU, before there are any further negotiations on the PGP.
Baron said he believes that CVC, the $130 billion global finance company that is a 27 per cent shareholder in the Premiership, should play a major part in the league’s turnaround plan: “Production of this is mainly the responsibility of CVC. Why should RFU member clubs throw good money after bad without such a plan?”
He argued that reform of the RFU’s own finances are of the utmost urgency given a heavy loss projection in the Board’s ‘Detailed Long-Term Forecasts’ for every year, bar one, in the next 10 years.
Baron warned: “In the PLC world such dire forecasts without an action plan to return to profitability would require wholesale Board resignations. Any turnaround plan will inevitably require heavy cost-cutting.”
Baron also called for the introduction in the RFU recovery plan of a “fair shares” principle whereby any rugby investment by the RFU going forward for four years is split on the basis of 37.5 per cent Premiership, 12.5 per cent Championship, 50 per cent Community clubs (including National Leagues).
He recommends that the “fair shares” principle is incorporated in the RFU’s rules at the next AGM, and that if it meets RFU Board opposition it takes just two member clubs to propose a new rule.
The Championship clubs’ chairman, Simon Halliday, has reinforced their opposition to the PGP’s ‘Premiership 2′ franchise model, and to their exclusion from negotiations leading to it being rubber-stamped by the RFU Board.
Halliday said: “The Championship is showing real leadership in managing its own destiny. The Championship has stepped-up, and we are pushing to find solutions which are in the best interests of the whole game. However, our lack of involvement in the PGP is not helpful to progress.”
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