James Cooper
Hello and welcome back to the podcast that's doing things a bit differently by providing a truly independent voice amidst all the noise to give you the inside track on what makes the business of elite sport tick. This is Sport Structured. Basically, it's all the facts and figures you need to know from the people who know what they're talking about and backed by Leonard Curtis who've more than 30 years of expertise in recovery and turning businesses around. Leonard Curtis were the first ever company to profile rugby union in this country. And now they're launching their third investigation into the financial sustainability of the top 10 clubs in England and the state of the game from the top to the bottom. Alongside me to pick through the headlines and market leading data here in the UCFB broadcast studios in the shadow of the Wembley Arch of our OGs and a new face for the Sport Structured podcast. In the red corner, as ever, the man behind Leonard Curtis's business of sports series and someone who played league before Union here in London before taking in Bristol, Newport, and Newcastle Falcons on his way to pulling on an England shirt. Alex Cadwallader, welcome back. From a former Union pro to a professor and provost and someone who's an authority on the business of sport. He's currently enjoying life as a Gloucester fan and provides much of the academic rigor that goes into each Leonard Curtis report. Lovely to have Rob Wilson with us. The Rose Between Our Regular Thorns is a doctor whose PhD was based on competitive balance in elite rugby union. She's a senior lecturer at Nottingham Trent University. And it's a pleasure to have Ellie Nesbitt vying for the spotlight with Alex and Rob. So call it what you like. Beauty and the Beasts, two men and little lady, or just an action-packed front row of our scrum. It's time to find out how the land lies with rugby union. This is the Sport Structured podcast with Leonard Curtis. So, a third Leonard Curtis business of sport rugby union report 2026. Alex, it was your idea to come up with business support in the first place. How pleased are you with the progress it's made and what is the kind of progress within that process? Bearing in mind we've got a third rugby union report.
Alex Cadwallader
Yeah, I think we've got to be pretty delighted with where we've got to and where we've come from. you know, when Rob and I first spoke about uh the rugby one, we sort of knew what the answer was and felt that it hadn't really been picked up properly by the rugby fans, the media generally and so on and so on. So for us, it was really jumping up and down and saying, "Wait a minute, we are, you know, riding off a cliff here unless something is done." So for the first report, it was really just highlighting the real difficulty the game was facing and how un una unsustainable the model was. And we've moved on from year two uh putting forward some recommendations uh which include a franchise model, a closed shop for one of a better word and you know that has led and and probably influenced Prem Rugby's move to that. So you know we I think we should take a little bit credit for that. And then finally, we're at year three where again we've sort of highlighted the challenges the game still faces um whilst trying to be positive and trying to focus on some of the some of the momentum the game has and how it can best capitalize on it. So it's been a a really enjoyable journey. Um I think we've become probably more efficient and more tuned as to what we're trying to achieve and how we can really try and make a change to a to a sport that many of us love.
James Cooper
Yeah. How much do you feel that your kind of voice has gathered more energy and and that people are listening more?
Alex Cadwallader
Yeah, I think as I mentioned um earlier today that uh you know speaking to some current players, former players, some of the owners, some of the investors, they are aware of our work and what we've done. And for us sometimes it is challenging because you are you know holding people to account and not buying into the PR whilst being fully aware that at the moment a lot of professional sport is private equity backed and private equity does mean an onward sale at some point and they want to show projections and forecasts that are a lot more positive what the current numbers show but I think what we're really trying to achieve is to ensure the game is sustainable. some of these cultural institutions are protected uh and not not just treated as commercial assets.
James Cooper
And Rob, the noise is loud from all sorts of quarters at the moment in terms of uh PR and in terms of growing a franchise rugby system and yet the message from the reports has been consistent. Debts rising, spending's rising, player wages is rising. Um and yet we're being told it's never been in a better position.
Rob Wilson
Yeah, it's a bit of a paradox, isn't it? And interesting Alex said there about it not being always considered as a commercial asset. The reality is when you start bringing investors to the table, they look at the commercial operations of all of these organizations. We've seen that across professional sport. Rugby is no different to that. If you look at the underlying fundamentals, revenue is down, debt is up, wages to ru wage to turnover ratio is up, which don't immediately slip off the tongue as being positive news stories, and they shouldn't be considered as positive news stories. The reality is rugby is still spending more than it earns. There are some winners in that context. Some teams like Harlequins doing particularly well and then you have other teams towards the bottom end of the structure. Newcastle Red Bulls for instance whose turnover is about the value of the salary cap. There is a huge discrepancy on that basis. But let's not ignore what's going on on the field. The game itself is kind of seems to be more appealing. the attendances appear to be coming back and it's been a long lag, hasn't it, since covid um and in any professional sport or any business for that matter, you typically grow when somebody is prepared to invest in you. So, I think it's rugby union is a really interesting junction in its history. The franchise system will undoubtedly help support the structure that the game wraps itself in. But that history, that culture, that connection with local community will always cause a bit of tension when the when those with the balance sheets and the P&L start looking at their earnout rates and how long we need to invest for.
James Cooper
The thing that's already set the the report apart is is the credibility is the is the rigorous kind of um learning within it, the academic stuff within and the fact it's balanced. Um, do you I said to Alex, do you feel that people are listening?
Rob Wilson
I do.
James Cooper
Some of the changes that have been brought in would would kind of dictate that yes, they are.
Rob Wilson
Yeah. You only need to read some of the newspapers and the websites and the media articles that refer to the Leonard Curtis business of sport series, whether it's rugby union, whether it's cricket, whether it's championship football, whether it's golf uh earlier in 2026. So, people are reading and listening. I'm not going to suggest that some of the ideas that we've put forward have been adopted because we put them forward, but it's quite coincidental that some of those ideas are being taken forward in a variety of different sports. Rugby is no different to that. Um, but by the same token, rugby needs to do something different to what it has been doing previously. we can't get back to a situation. Alex referred to our our chat pre the 2024 report. And the reality was we'd lost three historic rugby clubs in a very short period of time. Covid's the easy out for anybody. You know, we got no match day attendances. Therefore, we failed. But the reality is those businesses, those clubs were not financially sustainable. Their balance sheets were all over the place and they ultimately went into receivership. And that's not what we want to see from professional sports that we love. and uh and indulge ourselves in on a Friday night, Saturday afternoon, Sunday, whenever they play these days. Um and then as Ellie, I'm sure we'll talk about later, the pyramid that sits beneath that elite sport structure is crucial to the ongoing development society for five, six year old kids to be able to pick up a ball like I think your line in the uh when we launched the report, pick up that William Webb Ellis trophy or or ball and ran with it.
James Cooper
Ellie, welcome. uh g give us the the perspective from from the rest of the pyramid looking at the prem bearing in mind uh you support and work with a tier five team. Is it kind of looking at the promised land and think we'll never get there or is it playing for the love of the game? What is the majority of the rugby world thinking of the noise around the Premier League?
Ellie Nesbitt
I think within rugby union it's a huge participation sport. So I think everybody does it plays the sport involves themselves within the sport because of the love of the game. I'm not sure it's ever really going to be achievable for some of those clubs to move significantly um within that league structure and jump two, three, four um divisions, but it doesn't mean that it can't still be a goal. It's now not a goal for those teams striving to get into the Premiership. So, does the championship become part of that kind of tiered structure and actually that then becomes a goal and is that more realistic potentially? Um yeah, who knows? But hopefully this franchise-based premiership creates the spectacle, creates the attention, brings in a different audience that continues to grow the grassroot level which ultimately feeds the top uh elite league.
James Cooper
Is it is it a case of sorry alarm bells with with with no premier no premiership promotion, no premiership relegation, or is that a short-term wise strategy?
Ellie Nesbitt
I don't think so because I think the conversations that I'm involved in is that that was always never possible. you look at the top end of the champ and they're not able to make it regardless. So I think it's been a conversation for a long time where it's you're not gaining entry into the Prem. You don't make it into the Prem. So um I don't think that narrative has changed significantly. I think it's just a a shuffle in dynamics.
Alex Cadwallader
But we also need to remember the Prem's uh business plan is to include some additional expansion teams, but they're going to be based on a business model, a business plan that's put forward that appears to generate the required amount of revenue, will have the right infrastructure, the right stadium, the right impact on the grassroots so that when they are in the Prem, they're going to be contributing. Whereas at the moment the way the historic way is it will be the club that finished top goes up and they you know a lot of them don't have just the simple the stadia that's going to suit Prem Rugby and ultimately you could argue it's probably going to devalue it because it's not going to look great on TV. They're not going to perform on the pitch. So what is the point of them really being in that league when they're not set up to achieve or compete at all?
Rob Wilson
That's a bit of a franchise system, isn't it? Yeah. So, as Ellie said, we've had a championship competition that has a team that finishes top that isn't permitted entry to the Prem because they don't meet the licensing requirements. The ground's not big enough. The infrastructure is not sufficient. And you can get really grumpy about that, particularly if you're a fan of that particular club. But the reality is you don't need a set of whipping boys in a division that are going to lose every weekend. and get Ellie will pop in on competitive the importance of competitive balance, competitive integrity, how that kind of uncertainty of outcome is so crucial to broadcasting and getting eyeballs on on screens and bums on seats, that type of thing. So that licensing system has always been in place certainly in the last decade or 20 years or so. And I think the franchise structure just takes that one step up, codifies that licensing arrangement, will be expanded at some point. I think I'd be really interested to see how the pyramid sort of shakes out a little bit to develop academies and how those clubs become feeders for some of those franchise clubs because that's what we see in the states. You know, there's no typical academy structure that we might associate with uh certainly British or European sport. They typically will go through uh completely different tiers of competition before they then get drafted and put into one of the franchise teams. And I think that's what we'll probably start seeing happening.
Ellie Nesbitt
I think some of that already exists, but just unofficially. I think naturally you have feeder clubs or those kind of things. But maybe then as it becomes franchise based, it's just officiating those structures a little bit more.
James Cooper
But I want to ask you all, is it glass half full or glass half empty? I'll ask you to mark it out of out of 10. I think most of you come up with a six. Um PR wise, Prem Rugby saying it's never been greater, it's never been wizzier, never seen banger. And yet this report says something a little bit different. What where does the truth lie here?
Alex Cadwallader
Probably somewhere uh in the middle. It depends what what uh statistics you want to look at. If you look at the type of investor Prem Rugby has recently attracted that is a a real tick for the game compared to where we were coming out of COVID. And there are some seasoned investors that understand sport and investing into sport that feel like being blunt that there's some undervalued assets potentially in rugby and could we make a decent return. I still think there's some big challenges there and you know I think the Newcastle Red Bulls um venture stroke experiment is going to be a bit of a litmus test because they are fantastic at getting eyeballs on a particular sport have a fresh approach and if they can turn Newcastle round which has for a long time been struggling even when they've had you know one of England's best ever players and they've won won the league but the stadium is never full if it is full it'll students there on a you know one pound ticket and some uh reduced u alcohol being available and now Red Bull cans. So if they can turn that into a real commercial enterprise and it's a massive jump you are talking about a an entity that turns turns over you know 9 million or around that competing against one that almost turns over 30 million in Northampton and Quins and that is a massive jump. So, if they pull that off, fantastic. Um, but there there's still challenges there, but you've got a a decent investor base. There probably lots of other clubs that are probably quite keen to sell. Who else they can find? We we just who else they could find to buy that off them? We'll just have to wait and see. But, as we've highlighted in this year's report, James, put putting COVID aside, this is the joint worst ever set of numbers that Prem Rugby had produced.
James Cooper
So, it's fairly brutal, isn't it, Rob?
Rob Wilson
That is,
James Cooper
but it is though, isn't it? I mean, Blimey, you know, you can accuse him of being morbid and being negative, but the facts are there.
Alex Cadwallader
But was quite interesting, actually, I sort of I highlighted that to uh one of the national newspapers earlier today, and his response was, "Yeah, but the losses aren't increasing at the same rate as they were." So that's a bit of a prem rugby sort of spiel that yes, we're losing more money than last time, but the losses aren't increasing at a at a a bigger rate than previous
James Cooper
350 million pound hole.
Alex Cadwallader
Yeah. Yeah.
Rob Wilson
Yeah. I think we've been conditioned to assume that professional sport has got to lose money and it only exists because it loses money. I think we would all challenge that notion.
Alex Cadwallader
Yeah. Absolutely. And you and you know one of the my responses to your early questions was that if you look at football now when I grew up as a watching football or listening to podcasts or reading it in the paper it was never really about the finances of the game. You now look over all over social media I suspect you know from 12 years old and up they understand about or are trying to understand what's happening. Why Aston Villa are having to sell all their players and then buy some new ones. you know, the finance of sport is now actually becoming almost a bigger talking point than Man United's decision not to invest in their backline this summer and it's just becoming a part of of the game that we all have to deal with and and rugby is no different.
James Cooper
But without patting ourselves on the back and then doing that, there aren't very many people saying here are solutions, here are recommendations, though are there.
Alex Cadwallader
There are we're trying to and I think um you know, I think we discussed this previously. I think the challenge you have in in rugby is that Prem Rugby can only do so much. So at the moment we've suggested that they need to put some certain structures in place which they've done. Now it's whether they go to the next step and really as owners of those clubs or properly pull together and as I as Rob's mentioned previously if they try and if you need you need Harlequins and Northampton to pull the other two up but part of that will mean sharing a bit of their pie and they just need to decide if we all raise the level will all the ships go up with us or some nice little um um simile or do they continue just trying to focus focus on their own own pot and maximize their their own opportunities.
James Cooper
Is is that the key problem here? The fragmentation of it and then there may be the self-interest bearing in mind you've got an England team that thinks they're the priority. You've got Prem teams who think they are championship teams thinking what's the future hold for us. Everybody's thinking what's in it for me yet.
Rob Wilson
I think that's the nature of business and sport, isn't it? How do you improve your bottom line? How do you make a profit? How do you win a trophy? How do you make sure that your organization is at the top of the pyramid? Um the interesting thing with rugby versus a sport like football or even some of the work we've done in cricket is that winner takes all scenario is less apparent. So I think in the Saracens era it was all about Saracens winning the premiership as was the prem as it is now. Um obviously there is a level of checkered history with that and a lot of those titles were stripped back but but the point is that Saracens were trying to be the top top team the most dominant force in the game and won successive titles as a result of that qualified for European competition were very successful in European competition as well that had a knock-on impact to the English game and the sponsorship valuations went up a little bit and the broadcast rights went up a little bit but that's not a sustainable model where there is one single dominant force course because Saracens need to play uh Northampton, Leicester, Gloucester, uh Wasps as they as they once were. And by having all of those teams, you generate a much more interesting competition. Now, where rugby differs from a football is that winner takes all scenario is less prevalent for sure. Um the franchise system in its purest sense will start to share revenues a little bit more equally. They might even centralize some of their sponsorship deals. They might centralize kit manufacturer like they do in the UFC for instance where they control uh some of those commercial opportunities share out the wealth and that makes everybody as um kind of similar size if you like in terms of their balance sheet and P&L which means they can invest in players and then you'll get different winners all the time and that again improves the standard of competition and the and the valuations which is akin to the American franchise system that we see which is brilliant. if you're chasing financial sustainability and/or profits as your central uh objective. What we also saw in rugby union when wasps moved from north London to Coventry was that that type of franchise arrangement because it was a quasi franchise arrangement doesn't actually work because we are so wedded to those organizations as part of our kind of supporter fabric if you like. We can't just pick teams up. I mean look at the fallout with Wimbledon when they moved to Milton Keynes all those years ago. The British public want to see their clubs in their communities. So, we've got to balance rather the game has to balance franchise outcomes, financial sustainability, and hopefully a different winner each year.
James Cooper
But you've nailed the key word there, sustainability. Are we the only people banging the drum for sustainability?
Alex Cadwallader
No, we're not. You'll hear, you know, Gloucester's owner talk about it regularly, and I think, you know, they're they will not allow themselves to lose more than half a million pounds a year. other owners are um saying, "Well, actually, let me spend as much as I want. I'll keep bankroll in the club and we might compete with the uh the French sites." So, that's the challenge you have. And, you know, you've got that disparity between the clubs and the owners. And as we've seen on one of the weekends that have just passed, English sides only had one win in Europe, you know, losing to Irish and French sides who have slightly bigger budget. So you know that is the the impact of them trying to build a sustainable model and if we compare you know Prem Rugby to a Premiership a Premier League football club it would be fined for its losses. It would have a points deduction and would have a transfer embargo. And that's the reality of where we are. And when you say, you know, we've become accustomed to or just been told that it's normal for sports teams to lose money, I think that's mainly based on sort of the Premier League where it's, you know, that's a unique business where there's scarcity and the ability to own a Liverpool or Man United or if we go over to the US, the Lakers means that the the valuation of those clubs are they're not normal business principles. They're not based on a multiple of earnings or profits so on and so on. So, and we therefore think it was fine if we just keep losing money. But, you know, most people, if you look at the Glazers, what they bought Man United for with debt and then the return they may be able to get when they sell it on, they made a fantastic return despite the fact Man United are not throwing off 250 million pounds of profit every year. But when you go back to a smaller business like you have in in rugby, you're not expecting that type of return on your investment.
James Cooper
Ellie, when when your motivation is a community club, some of these figures just seem bonkers. Does it seem like a different world?
Ellie Nesbitt
Yeah. And it actually exists within community clubs anyway because you have disparities about paying players and not paying players. And I think that is a big part of national leagues, but also then leagues that follow kind of behind that. So you compete in an environ sorry an environment where some players get paid and some players don't or maybe certain members of your team do or certain members of your teams don't. And then it comes back to the conversation about how is that fair and how how do you compete when you've got teams who are maybe collecting a wage bill at the end of the game of £1,000 and your club can't afford to do that? or maybe it can, but it's prioritizing different aspects of the sport like the mini juniors or um the women's game trying to give back to the community. So it the focus of um level four, five, six, whoever rugby clubs have different priorities with whole different numbers. And it's really dependent on their kind of version of events, what they want to prioritize, whether that's growing your juniors, whether it's paying your players and competing and reaching the national levels or whether it's aspiring for more than that.
James Cooper
But joined up thinking even in affects kind of you know where where the eyes are watching different games whether they're watching your game or they're watching England playing Australia on on on Sunday. Yeah. There's no thought at the moment about scheduling works is
Ellie Nesbitt
no absolutely um there is a shift in scheduling um which is great but you are still typically seeing the time slot for rugby on television at 3 p.m. on a Saturday. That is when our senior teams play um especially in the men's side. So, we've got three senior men's teams, which is the club that for the club that I'm involved in. They all kick off at 3 p.m. on a Saturday. So, your audience that you've got there who are invested in rugby, they're committed to the game, they want to kind of be part of it, they're not watching the prem um and they're not getting the same buying, I guess. So, is there more that can be done in that space to Friday night fixtures, Thursday night fixtures, Sunday evenings, whatever it may be, all being considering the fact you're competing against football for those same time slots. So there's a really hard narrative to kind of make headway there, but we we see it also that England kick off at three. Um, and you kind of think, well, we're we're playing at that time, so you can't even watch the most elite kind of level sport sometimes because you're obstructed through television.
James Cooper
Alex, you're smiling, but it's it's
Alex Cadwallader
Yeah, I'm smiling because it is a reality and I don't think there's a real easy fix because the RFU would make those changes. is Prem Rugby would make their change make those changes and ultimately we're also a lot of the sports all trying to do the same thing all to keep we are all fighting for the same eyeballs. So whether that's you know Formula 1, tennis, cricket, golf, we're all trying to do the same grow the sport, find a new audience in different geographic locations. So you know it's not there's never going to be one sort of silver bullet that fixes things. I think the most structurally change they could make they have made in Prem Rugby. But now it's all about well are you going to take are you going to take the next step and do it properly. Are you really going to look at collective bargaining agreements? Are you really going to try and force the owners to work together and if you're going to do something do it properly fully go for it and don't just sort of do it half-heartedly because then we don't know what can be achieved. And you know, we do have a fantastic example of the NRL, the rugby league um uh professional club game down in Australia where you know, Melbourne Storm have just attracted some investment valuing, you know, that club at north of 100 million pounds, which is way beyond whatever we've got over in over in the UK. But actually if you look at some of the key figures in terms of viewing figures and so on and so on, it's sort of on a par but they're obviously doing something right in in the NRL and a lot of it is how the governance and the structure which we just don't have uh over here with rugby union or rugby league.
James Cooper
It comes down to attention to detail and Alex is right do it properly. Do you get the sense that Prem Rugby are going to do franchise rugby properly?
Rob Wilson
It's very very early days. the I think the ambition is there. Whether the attention to detail is, only time will tell. There are enough handbooks on how to run a franchise successfully. There are enough reports now out there that detail the types of savings you can make by centralizing some of those deals, the opportunities that you've got. We haven't even talked about the digital footprint in the new report that we've looked at where you might be able to start exercising some command and control over some of the social media channels that and some of the content production and how that then starts to go out. So the opportunity is there. Whether the detail is time genuinely will tell. I imagine that Prem Rugby when they're in their investor meetings are trying to look for a a particular type of investor. And what has been interesting for me over the last 12 months watching the investment come into the likes of Bath, Exeter Chiefs, and Newcastle Red Bulls is that those investors are very different. So you've almost got a kind of old school local business person that's done pretty well going in at Bath. You've got a data-driven evidence-based multi- club model going in Exeter in Black Knight Group and then you've got Red Bull and their marketing campaign going in at uh at Newcastle.
James Cooper
Does that inconsistency of ownership worry you or is it a strength?
Rob Wilson
It tells me that the Prem haven't got to grips with the type of owners they're really looking to encourage. We talked about owners and directors test when we were chatting through the uh championship football finance report that we did. There are very strict concerns over owners and directors in football. Whether they always deliver the desired outcome is up for discussion and debate of course that we don't have a similar kind of model in in rugby union. I do find it interesting that prem are going over to the states. So that tells you that they're looking for private capital, private equity in the most part. They're also looking for a US model investor base which naturally lends itself to what we understand as being franchise systems. What will then get really interesting is how does a Dyson owned Bath as a historical club meet the new world of private equity that might go into some of those other clubs. Um how do their objectives marry up? When when you talk to US investors, they're all talking to each other. you know, they all know that that they will be successful if their counterparts are. You know, I was supervising Ellie's PhD. I knew that when Ellie guarant got her doctorate, that would be great for me because I could put another PhD completion. It's a collaboration between people. That's what you have in a franchise system. So, you have owners that are talking to each other to maximize the output for all of them because all of them then benefit from a rise in valuation.
Alex Cadwallader
I think in an ideal world, you know, Simon Massie-Taylor, CEO of Prem Rugby, comes back with an offer to take out CVC and take a larger stake in both Prem Rugby and the individual clubs because ultimately I think if you're looking for a real serious player to make a move, they're going to want a bigger slice of the pie. And it's not that big a pie at the moment. You know, it turns over 200 million. If you're talking to, you know, big boy private equity, that's not a really big check. And if you're going to then make it just about each individual club, you know, all of these investors that um Rob's mentioned, you know, it's not going to be most of the their their capital. It's going to be a bit of a small play compared to what they're having to put into other sports. And my concern is it's almost like, well, there's just a two pound bet on a 45 to1 outsider. My real focus is on my three favorites that should hopefully, you know, come each way in the Grand National. These are just almost throwaway little bets. And you what you really want is someone who's really focused. It's a fair amount of their capital and they really want to get a hold of the whole thing and reshape it and drive it forward.
James Cooper
And and how how much does it hurt being kind of died in the World Rugby Union to think that that might not happen or that the future of the game might be down to someone writing a check?
Alex Cadwallader
Um I don't I don't think we're at a stage where the thing's just suddenly going to collapse and disappear.
James Cooper
No, but it's not as bright as some people would happily believe either.
Alex Cadwallader
No, but they're trying to make the positive changes and that's where we have to take a bit of, you know, solace that they have taken those steps and they're trying to do the right things. Um and we've played a small part in sort of just, you know, shining the light on some of the issues that the game has. But it's still, you know, it's still there's still an opportunity there. You know it, you know, for me it might be a radical thing that if we only turn over 200 million, why don't we just try spending 200 million as opposed to 240 million and see where we get to um and you know have a bit of stability for a few years and then grow from there if there are opportunities to do that.
James Cooper
But I mean things like salary cap and salary floor are really sacrosanct when you think about sustainability and you've got new owners saying let's compete with France, let's bin the whole thing. Yeah. I mean the the two can't work together, can they?
Rob Wilson
They're uneasy bedfellows. Um, one would argue that you need a level of regulation to help the clubs sustain themselves and make sure that there is a metaphorical ceiling on what they can spend. The danger with that is that you are almost forcing some clubs to spend more than they earn, which butts up against that whole financial sustainability argument. I remember getting shouted down when I suggested the salary cap needed to come down significantly because it needed to be more in line with perhaps the midpoint of where club finances were rather than the the top end of it. The salary floor absolutely protects player interest. So instead of having squads that are spending 90% of their salary cap on their starting 15 and then stacking the bench with a few academy lads that are on 25 quid a week, you get a much broader share of that deal. So that's a good thing. But when you look at Newcastle Red Bulls, that's 80% of their turnover. It doesn't give them a lot of headroom to do anything else, does it? So I think if he really pressed me, I'm a fan of regulation when it helps produce a more prosperous outcome. But I think we've become very fixated on that salary cap as the mechanism by which clubs can can grow and evolve. And then you have a threat of the French game which then you overlay the English RFU to make sure that we can't leak English-based players over to France or anywhere else in the world for that matter because Japan is also emerging as a powerhouse in rugby union with a lot of cash. Um because the English national game for me as an Englishman is the most important thing. I'm sure if you spoke to a Welshman, a Scotsman, Irishman, you'd hear the same the same story because the international game is still the pinnacle of that competition. I might argue it's different in football. Um, so you need to build that pathway. Um, and you need to protect the integrity of that national competition. Otherwise, you end up with a club game like we see in Wales and in Scotland and in Ireland which is desperately fragmented and are really really struggling. So there are some good news stories as well.
Alex Cadwallader
Yeah, there is. And I think um I think it in British culture we struggle with no longer being the biggest and the best especially in sport. We had it cricket with the IPL you know anyone that even thought about going to play there was sort of ostracized and um you know dropped from England and you know a lot of would take a lot of heat and now ultimately we just have to accept the French game is a bigger game than us. you know, we're not going to be able to the viewing figures, the attendances, the commercial rights deals are just bigger than the English game. And getting rid of, we know what happens when you don't have a salary cap. Clubs get themselves in a little bit of a mess. Some owners will fund it for three, four, five years and then for whatever reason decide they don't want to do it anymore. They'll try and sell it for a pound. It's laden with debt. No other buyer comes along or maybe a buyer does come along who's actually trying to asset strip as we've seen at a couple of the clubs. uh and that's where you start actually what are we doing here? We need a bit of regulation to protect some of these you know institutions that provide a bit more to the to society than just being a commercial asset. So I think they've taken the necessary step and you just got to accept that you know we can't we only have certain number of eyeballs certain number of fans we have the Premier League absolutely flying the envy of the world you have the championship just behind it as well you know we're not suddenly going to find more and more sports fans within the UK that are going to drive revenues up in rugby to compete with France
James Cooper
Ellie I want to ask you about competitive balance because that comes into it people understand winning losing and drawing but how does competitive does balance play? What are the rules and what it's about?
Ellie Nesbitt
So, fundamentally, when we're talking about the concept of competitive balance, we're looking at um the realistic opportunity for teams within a league um having success and having that chance of success. So we want um higher competitive balance levels because that drives uncertainty within the within the game or within the kind of end of season results and we want there to be uncertainty for the fan perspective so that they are buying into the product. They don't know the um the game result before they arrive and watch that game whether it be on television or live in person. So, we're talking about does your team does any team have a fair equal opportunity to go on and win trophies at a given point um across a kind of number of seasons?
James Cooper
Is that something that you can sustain or or grow into a franchise model?
Ellie Nesbitt
Absolutely. And you could you could we see it all time over in the States. Um to kind of loop into some of the conversation from earlier, rugby union as a league identity has really struggled over in fact since its existence potentially since its professionalization. We've had promotional relegation which is very tied into a Europe model of how we do things but we've had bonus points which is very American way of doing things and then you've had a salary cap which is also very American and so it's almost like a mismatch of identity and I wonder whether or I'm hoping being the optimist and the love of rugby that actually if we're conforming now to a franchise-based model that does conform to a more American way of doing things but that then aligns with the salary cap it aligns with um traditional formats. So, it almost cements their identity a little bit more and allows them to have competition in a different way to how it currently looks, I guess.
James Cooper
I also want to ask you about women's rugby. You hear the Blokes worrying about every pound coin. Do you think this is never going to filter down properly to the to the women's game simply because they're fighting over every penny?
Ellie Nesbitt
I I think that's a really valid point. I think you Oh gosh. Um, I think that you have to have the backing from the men's because at the minute the women's can't quite do it on their own, but if the men's can't fundamentally sustain themselves, then their priority is not also going to be the women's as well. So, um, yeah, I think
Rob Wilson
it's tough, isn't it?
James Cooper
So, is it about growing it from the grassroots rather than worrying about having um equivalent men's women's teams for every franchise? Has the focus got to change to get more girls playing rather than thinking about I need a bath team, I need a we needed these teams that some of them haven't even got women's teams.
Ellie Nesbitt
Yeah, potentially because we are seeing a I guess these grassroots fruitions coming from the success of the England women and that is driving more um participation at younger levels of um girls rugby. But picking up on the point you just said about having a ma a matching men's and women's, it's not quite working at the minute is trying that's what
Alex Cadwallader
well it doesn't even work in in men's football either, does it? You know, you know, so I think ultimately it's a different model. it's you're looking to probably achieve some different things and it's a longerterm investment um which will attract a different type of investor um because it is making a bit more of a difference and achieving different things than than the men's game does. So I think it's certainly something that the game should look to have on its to-do list, its priority list, but you know you see it with you know um INEOS's view of Man United women's. it's, you know, not not no interest to them whatsoever. Um, but, you know, I think we would, if we had this blank sheet of paper, which we're never going to have, um, it would be on that list to make sure that both the the grassroots of the game, the women's game, the disability, all of that is is given a a platform to provide, you know, general society with a lot of the benefits that sport can can bring. being part of a team, experiencing losing, winning, how you deal with that, you know, leadership, so on and so on. It it does make a massive change to all of society. You know, I imagine, you know, a lot of our issues within that we currently have that the government are facing. You know, if we were able to bring sport and music and drama and arts into these people's lives, it would make a massive difference. And that's fundamentally what sport used to be. It was a healthy way of us interacting and playing a game.
James Cooper
Alex Cadwallader MP Fantastic. [laughter] What a notion. Um, but the problem is you can only stretch the money so far, isn't it?
Rob Wilson
This what this argument boils down to is what is for the good of the sport. So for the good of the sport might be providing multiples of participation opportunities, multiple formats of the game, multiple uh quasi professional outcomes, whether it's women's, whether it's men's, whether it's mixed, whether it's disability, whatever it might be. But ultimately, all of that has to be underpinned by somebody putting their hand in their pocket and paying for it. Now in its purest sense if you've have a a successful professional sport the people putting their hands in the pockets are people like us to pay on the turnstile to pay our TV subscriptions which then goes into the sporting ecosystem and then filters down at some level. Um when you look at all of the top governing bodies they are working on a cycle. So if it's an Olympics sport it'll be on a four-year cycle. They get the Olympic broadcast that then filters down. If it's a UEFA model it's a four-year UEFA championship model. it filters down. If it's rugby union, it's uh done on a four-year cycle, but they use the Six Nations, the autumn internationals, it filters down. But when you have a professional game that isn't sufficiently liquid and isn't sufficiently profitable, because it's not, that then becomes very difficult to filter any of that money down to achieve any for the good of the sport objectives. Because quite frankly to do something for the good of the sport basically says no one's making any money and it's going to cost us. So when you go back over time and you look at the history of it that's why we see consistent changing of the guard at all of our professional sports organizations. I'm a local businessman. I want to buy my local team whatever that team might be. Oh, I've run out of money. Someone buys it for a quid. They then go through the same cycle goes on to next. They go through the next cycle. And what we're looking at here is how you break that cycle and how you you design an ecosystem that can pay for itself. And I loved Ellie's analogy when she was talking about the difference between the European and the US team sport model because it's literally like some of the European sports particularly rugby union and league have gone I like that bit and I like that bit but we've got to keep this bit because it's socially really important to us. what you end up is with a confused model that is actually worse than what went before. So if you're going to do something, do it properly, take the things that we know works, grow the franchise values and start distributing the money through the system
James Cooper
and then throw Eddie Hearn into the mix.
Rob Wilson
I mean, if you want to amplify these arguments, throw Eddie Hearn into the mix. And the re I mean the argument for me would be look at how match room have developed hugely successful organization very controlling in how they deliver their sporting systems but very successful. Um he will absolutely challenge the status quo in rugby union. That's not going to be through players wages because there is a salary cap, but you could see new sponsors, new broadcast partners, new game formats, new social media, digital footprint activations, which I think is really good for the game and will test what is possible.
Alex Cadwallader
Yeah. And I'm sure he's going to shake a few trees and try and, [sighs] you know, help some of the owners, some of the current management team within the unions and the um within Prem Rugby look at different approaches. you know, he's very aware and has great experience of howing to get how to get more eyeballs on the sport and how to generate more income. And he's, you know, I don't think, um, as Rob says, you're going to do it through player wages, but I think he's going to have some great ideas. Um, you know, he looked very closely at rugby league three or four years ago and then walked away. Um and now he's decided to you know pick up um you know Finn Smith, Henry Pollock and um you know he's also signed a a sprinter as well. Uh an athlete uh I think he's double barreled surname finishing in Hearn. So all a bit uh all a bit strange but um you listen he's someone that you know knows how to monetize sports. Um so I think it's a positive step and we'll see what ideas he comes up with.
James Cooper
I was going to say no idea too crazy.
Ellie Nesbitt
I don't think so. I don't think so. I think he actually brings excitement into the game that we are all very passionate about anyway. And so if that excitement that currently exists in boxing that has created that spectacle, he's created the showpiece thing. If if all that is brought with him is that in rugby, fantastic.
Alex Cadwallader
You'd have seen it in your when you were at Sky Sports News, you know, he made sure there was his fighters were fighting on Sky Sports box office. But you 24/7 Sky Sports News was just talking about Anthony Joshua's next fight. Anthony Joshua's next fight and you're sitting there and eventually you get to Friday fine £25 to watch Anthony Joshua fight someone for a round and a half. Yes, I'm going to do it.
James Cooper
The money walks out. Exactly.
Alex Cadwallader
So, you know, and that goes back to what we would like. There should be one home of rugby. Uh it used to be on Sky Sports and and it did did it well in the morning. Saturday morning you wake up and you watch the Super 12 uh and watch some fantastic sports at 8 in the morning on Saturday on Saturday. And then in the afternoon you'd then have Stuart Barnes and Miles Harrison um commentating. Yeah, exactly. Whereas now we're nowhere near that. I've got no idea what rugby is being played other than the game you've just mentioned. Um normally most weekends I've got no real idea whether it's the Prem the Prem Rugby Cup if it's European so on and so on because it's so fragmented where you get that I don't know. You know, Rob talks about being a Gloucester fan and last year he never actually knew when they were playing. So, you wouldn't really even know what time to make available, let alone which platform you had to go on to.
James Cooper
Plus, they weren't winning anyway. Yeah.
Rob Wilson
And that but that compounds the issue, doesn't it? Because when they're not winning, you're then not searching out. You know, I'm not living in the locality anymore. So, I'm I don't get the local press. I don't subscribe to one of the TV channels. So, therefore, you don't get any of the content. Now going back to the boxing situation and the proliferation of content that was going through, you knew when those fights were going to be on. What that also did because they also had football was meant that our eyeballs as as people that want to consume sport are also on those channels. Rugby union is not on that channel anymore. So when Gloucester played Bath a few weeks ago and hammered them by the way at home that that was not news. So it was not on Sky Sports. It was not on the BBC because TNT Sports have got the rights to it. So you could pick up a copy of the Sunday Times and you could read the drivel that Stuart wrote about the referee who I thought had a really good game like game by the way team that won. Yeah. First time for a long time because they never say about anything positive about Gloucester. Um but the reality is that if you don't know where to look, it's very difficult to find out because it's not in your face. And rugby has got a problem with that now because as Alex has just mentioned, you don't know what competition's on when. You don't know what time the game is on. And unless you are a hardcore fan that's probably got season tickets and know where know when you're going, the eyeballs on the screens are going to be lower. And when you start to extrapolate that out, if you're not watching it on TV, that means your son or your daughter is probably then not watching it with you or popping in to see it. So, they're not involved in rugby. And that's the next generation of fans. So over time and if you look at the demographics of some of the stadiums in the not too distant future, those audiences are going to expire and there's going to be nobody to replace them.
James Cooper
I just want to round off by looking forward 12 months. How big a year is this for Prem Rugby? Bearing in mind all the things we've talked about and the eyes are on it now.
Ellie Nesbitt
Yeah, I think it is huge. This is like make or break, isn't it? If you get it right and you have grown a sport and you can keep that joint nature of production that we've been speaking about, you can enhance the competition, you can bring the spectators along with you, engage with the fans and make it a really exciting product to buy into. Um, but if you're going into it half-heartedly and you don't quite get a few things right, it's trying to do that again season after season until you get it right. So that's going to be the balance I think trying to absolutely decide what your principles are and get it right as early as possible so that we're not dragging um something out and and we lose interest along the way.
James Cooper
Alex, how confident are you that a that'll get it right and b will it provide some sort of salvation for the Welsh game that you're so fond of or
Alex Cadwallader
um yeah the Welsh game? Well, I I I yeah I played for a few Welsh sides when the English sides didn't want me. Um but yeah, listen, I think Wales is a unique place, unique environment. They actually have the governance structure um and the control in a few places to make the changes, but you know, politically it's just really hard to force those changes through. So, you know, they keep going through different chairmen um and uh different, you know, finance d sorry performance directors to try and put a new model in place. But where do I think English rugby or and Prem rugby will be? It's going to be linked to probably the performance of England in the upcoming World Cup and whether that builds momentum and you know you see the rugby that's being played on the pitch in Prem Rugby and it's fantastic. It's flowing rugby. It's um very open. the international game isn't really like that and you know South Africa is still dominating so we'll see whether that translate to England's performance but I think it's all about just building some momentum and trying to see some more positive changes um and buying into what a you know franchise model should be um you know there are some worrying signs Exeter closing a stand for the first time ever a couple of weeks ago um because of reduced numbers so there's still challenges there But, you know, I think I have to be positive cuz we made some recommendations and they've done them on their own accord or back on us and others mentioning it should be done. So, I think we've got to be positive, James, and hopefully um there's enough realism and um and enough sort of sensible heads within the game that will try and build on some of the momentum they think they've got
James Cooper
and optimistic that maybe a door might open to Prem Rugby for a chat or is that I mean, is it something you've been looking for for three years?
Alex Cadwallader
Yeah, listen, it's it's interesting. You know, we've spoken to some of the other leagues, um, some of the other CEOs. We've spoken to some people at Prem Rugby, but but I understand it. You know, they are they are PE backed and unfortunately they know they know they know the numbers before we get them. Um, and they know they're not going to be great. So, it's hard for them to say, actually, we're going to put our name alongside you. Um, but yeah, we'd love them to engage with us and we'd more than offer more than happy to offer them a platform to tell us about the changes and what they're hoping to achieve and why they can and can't do things. Um, and the RFU get the same criticism and and occasionally when they have some really bad headlines, they jump on a podcast and you actually hear from them and you realize the challenges they have because you know the people um involved in rugby are some of the most successful businessmen, business women and and we don't always know what cards they've got to deal with and you know they do have other challenges that they don't share with us and they do probably make some poor decisions but they're often because someone else won't allow them to make the decision they want. So yeah, we'd love for them to engage with us. We've had other sports do that. We've had other clubs do that. Um, and we're, you know, we're always there to try and help.
James Cooper
And Rob, but Alex makes a really, really fundamental point that the product's good. So you can build stuff around this, but you got to do it in the right way, haven't you?
Rob Wilson
Yeah. Last season when you look back was the season of data that we don't have because our accounts are always a year out of date, aren't they? The data we're reporting is uh is 2425. So there's a season that's gone in between. It'll be interesting to see if there are any shoots of recovery. I think there are some green shoots of recovery emerging. I think this season has been explosive so far. The number of tries that have been scored have really got people out of their seats. And notwithstanding the stand closure, notwithstanding the stand closure at Exeter. I personally think that tendencies seem to be heading in the right direction. They've had some great ideas with the TV company about putting on Derby weekend. that consolidates your kind of fan engagement. So, they're doing some really interesting things and I and that gives me cause for real optimism, but they have to deal with those underlying financials which are to pay down their debt a little bit to make sure that they're not continuing to lose and ultimately ultimately that the clubs are not wholly dependent on their benefactors.
James Cooper
Ladies and gentlemen, that's great. Thank you. And that's it for another episode of the Sport Structured podcast with Leonard Curtis. Hopefully, you'll agree we do things a bit differently. Yes, there's informed conversation and debate, but it's backed up by cutting edge research and data, plus recommendations aimed at growing longer-lasting and more sustainable sport for years to come. Leonard Curtis's 2026 report in the rugby union is available now, but thanks for being part of the Sport Structured podcast. Look out for our next pod coming very soon.
Disclaimer: The content of this podcast is intended as commentary and opinion on matters of public interest in the sports industry. While we make every effort to ensure accuracy, figures, statistics and financial data referenced may be based on publicly available estimates and could be subject to error or change. Nothing in this podcast should be taken as a statement of fact. If you believe any information is inaccurate, please contact us at rob.venables@leonardcurtis.co.uk and we will endeavour to correct the record promptly.
