Leonard Curtis director and ex-rugby player Alex Cadwallader supports move to expansion league

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• With radical plans approved for Prem Rugby to adopt a new franchise competition, Cadwallader says: “The current model does not work, so hopefully this will provide some certainty and a solid platform from where the club game can grow.”
• Move to expansion league comes as Birmingham City FC owners are reported to be considering launching a rugby franchise in the city, while Ealing supporters build petition for entry to the top-flight.
• Leonard Curtis Rugby Finance Report co-author Prof Rob Wilson says Ealing’s case is “difficult to dismiss on objective grounds” but warns of challenges posed by Prem Rugby salary cap.

Alex Cadwallader, a Leonard Curtis director and former England U21 rugby union player, has welcomed radical plans for Prem Rugby to adopt a new franchise competition, and warned it is essential a stable business model is established amid rising losses across the club game.

As was widely expected, on 27th February the RFU Council voted in favour of controversial proposals to split Prem Rugby from the English pyramid and bring an end to top-flight promotion and relegation.

Under the plans Prem Rugby will be relaunched for the 2029/30 season as an expanded franchise competition of up to 12 clubs. From the 2026/27 season, automatic promotion and relegation between the top-flight and Champ Rugby will be replaced by a criteria-based expansion and demotion model.

The move marks a seismic shift for domestic English rugby, which has struggled to find a financially sustainable model since the game’s move to professionalism in 1995.

Cadwallader – who played for Newcastle, Bristol, Newport and London Welsh over a 10-year career – said: “As our reports have made clear, the current model does not work, so hopefully this will provide some certainty and a solid platform from where the club game can grow.

“Investors won’t fear that their name will be associated with a club going into administration or being relegated, and a longer-term vision can be implemented.”

However, he added: “The focus should be on creating a stable platform for the initial ten teams and a strong second division where academy players learn their trade.

“Then the league should remain open-minded and consider how new entrants could be accepted. For instance, the option of a team in and around Canterbury, Kent seems worth exploring given some key metrics in the local population there.

“But a stable business model for Prem Rugby needs to be identified and implemented first.”

Birmingham City FC owners consider rugby franchise

Ahead of the RFU Council vote, it was reported that US-based investment firm Knighthead Capital – which owns Birmingham City FC with NFL legend Tom Brady, and acquired a 49% stake in The Hundred cricket franchise Birmingham Phoenix last year – was considering launching a professional rugby union franchise in the city.

Cadwallader said: “It will be interesting to see how the reported application for a Birmingham-based franchise team would be assessed against one from Ealing [the dominant club in Champ Rugby].

“One would expect that a team in Birmingham would be more appealing to certain stakeholders. However, would they be able to attract the crowds and what metrics are Prem Rugby going to use to ensure that the team don’t end up playing in half-empty football stadiums?

“On the positive side it would be a strong statement if Knighthead Capital were prepared to expand their multi-sport model into rugby with a long-term investment strategy.”

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Cumulative losses of £176.9m since 2014/15

The difficulties facing Prem Rugby were highlighted in the second edition of the Leonard Curtis Rugby Finance Report published last November, which showed that the ten top-flight teams made a combined loss of £34m in 2023/24, with cumulative losses of £176.9m since 2014/15.

Total debt across Prem Rugby in 2023/24 amounted to £342.5m, up from £329.8m in 2022/23 for the same set of clubs.

The report examined how the league could be structured under a franchise model and concluded that through a licensing system clubs could save £1.1m to £1.9m annually on a typical £20m turnover from shared services combined with centralised governance.

However, it warned that club finances would only be stabilised if the model was combined with disciplined cost controls, such as an initial wage to revenue ratio limit of 70%, as well as transparent annual licensing/grading and solidarity with a properly supported second tier.

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Investment in academies, facilities and community programmes

Prof Rob Wilson, co-author of the report, said: “The principal advantage of a franchise model is stability. Fixed membership reduces volatility and makes financial forecasting more credible which, in turn, improves investor confidence and asset valuation.

“It also allows clubs to invest in academies, facilities and community programmes without the existential risk of relegation.

“From a league perspective it creates a more coherent commercial product. Broadcasters and sponsors favour certainty. In a sport that has experienced financial fragility, that stability carries weight.

“While a different world entirely, the Seattle Seahawks NFL franchise has just gone onto the market for $10bn, proving the long-term viability and valuation improvement gained from a structured franchise system.”

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Vision to double size of league from ten to 20 clubs by 2040

While the initial plan for the Prem Rugby franchise competition is to begin with up to 12 teams, according to documents seen by The Sunday Times there is a vision to double the size of the league from ten to 20 clubs by 2040 and target “strategically important” regions, including Yorkshire, East Anglia and Kent.

Prof Wilson, who is a professor of applied sport finance and dean at UCFB, said: “Expansion to 12 by 2030 is achievable if capital and broadcast growth align. Beyond that, the economics become more challenging.

“Without meaningful media rights uplift, central revenues risk dilution. It is also difficult to expand meaningfully if eligibility criteria remain restrictive. The governance model and the entry criteria must be strategically aligned.”

Under the current minimum standards criteria (MSC) for entry into Prem Rugby, the capacity of a club’s stadium must be at least 10,001, although development can be phased over four seasons following promotion, starting at 5,000 in year 1, as long as planning permission is in place.  

The criteria have prevented Ealing Trailfinders – Champ Rugby title winners in three out of the last four seasons – from entering the division. The club’s ground holds 5,388 spectators and it does not have planning permission for an expansion.

The issue is the focal point of a petition launched in early February by the Ealing Trailfinders Supporters Association for entry into Prem Rugby on merit and changes to the MSC. By the beginning of March it had attracted over 2,400 signatures and was endorsed by the supporters clubs of rival Champ Rugby teams Bedford, Worcester and Coventry.

As well as its dominance on the pitch, the Ealing group points to several other attributes, including a sustainable financial position, with the club being debt-free, and its multi-sport community facility.

Salary cap poses challenges in top-flight

Commenting on the supporter group’s campaign, Prof Wilson said: “The case being made is coherent and difficult to dismiss on objective grounds.

“Ealing’s debt-free position is particularly notable given the financial distress seen elsewhere in professional rugby. That signals prudent ownership and balance sheet discipline, which are not common commodities in the current climate.

“The multi-sport community model also strengthens their argument. It speaks to diversification, participation growth and long-term sustainability.”

However, he cautioned: “The counterpoint is revenue scale and competitive budget capacity. Being debt-free is commendable, but sustainability at Championship level does not automatically translate into competitiveness under Prem Rugby cost structures.

“The salary cap, even in its revised form, still requires a meaningful and recurring revenue base to fund player depth, medical support, analytics and performance infrastructure.

“If core revenues from matchday, sponsorship and central distributions are materially lower than established Prem Rugby peers, the club risks operating permanently at the edge of the cap without the commercial headroom that others enjoy.”

He added: “Promotion is not just a sporting shift; it is an economic transition into a different risk category requiring structural consideration.”

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Few examples of promoted clubs succeeding

Ealing will be among those applying to enter the new franchise competition and Cadwallader said their case should be considered. However, he stressed that entering the league would still likely pose significant challenges for the club.

“To compete in the top-flight their cost base will need to change materially to the extent that their new business model will not be sustainable for long nor will it remain debt-free, unless of course the investment is provided by way of equity.

“My concern for Ealing would be based on what has happened before, albeit under the current model. Would we say that London Welsh, Worcester Warriors and London Irish made it work? This is before we consider Bedford and Rotherham. All had certain characteristics that were arguably more impressive than Ealing’s. So why would Ealing succeed?

“The one success has been Exeter, who required massive investment over a long period of time but still most recently posted a £10.3m loss for the year [ending 30th June 2025].”

Cadwallader added: “The game should not just dismiss Ealing but consider their application alongside others such as a team in Kent. Flexibility will be key.

“However, I do feel at times we in England are too focused on the dream that a businessperson can invest in their local team and take them all the way to becoming champions of Europe. That can happen but it is not common and lots of other circumstances need to align.”

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