James Cooper
Hello and welcome back to the Sport, Structured podcast. We're aiming to do things a bit differently by providing an independent voice amidst all the noise to give you the inside track on what makes the business of elite sport tick. But it's not just chat for chat's sake. We're backed up by Leonard Curtis's cutting edge research, which provides validated sets of financial data, plus professional commentary for major sports, all in one place. boiling things down. 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 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 with their 2024 report. And with the 2026 analysis now being gathered, it's the perfect time to examine the health of the 15-man code on these shores. Alongside me here in the impressive UCFB broadcast studios in the heart of media city are a hooker, a winger and an academic. Let me introduce you to a man who was born in Middle Sex but sees himself as a Welshman, was raised in Wales and even went for the Welsh head coach and CEO roles before embarking on a global rugby journey that took him to Australia and Fiji. He is Mr. Mark Evans. Our second guest is one of the sport structured team and the man responsible for the Leonard Curtis business of sports series. He played club rugby in Wales but pulled on an England jersey. Lovely to see Alex Cadwallader with us again. And finally, another regular and another reason why we do things differently. He's not just a netball dad. He's the dean of UCFB and a leading sports business academic. Professor Rob Wilson is the man who really brings the analysis to life. We were hoping to make it a fantastic four and invited Prem Rugby CEO Simon Massie Taylor to join us, but sadly we didn't receive a response. Not to worry though, we've got a pretty strong front line. So, time to get our gum shields on and hit the tackling bags by looking at the state of rugby union in this country. This is the Sport, Structured podcast with Leonard Curtis. Mark, welcome. Alex, Rob, lovely to see you again. Uh, regulars, OG's. Uh, Mark, this is very, very different. Um, I'm going to hit you with a curveball to start off with. Um, how do we make rugby union sustainable in this country? I mean, that's the $64,000 question, isn't it?
Mark Evans
define sustainable and I'm not trying to be you know sort of evasive here but there's lots of sports because it means it's got to be operationally profitable. There's loads of sports around the world that aren't operationally profitable uh and are yet still seen to be successful and grow and grow. I mean it always amuses me when people go about French club rugby for diff keeping just keeping the same sport. I say French, it's brilliant and it's it's it's it's so big and it's it's so the TV deals are so much bigger. It's all true, but they're nearly all heavily lossmaking and they're nearly all reliant on patrons or if you want to use a a less um patronizing word, investors. So I think it really does depend how you want to measure it which is why it's really useful though when you get some sort you look at the data and you think well it's looking a bit better than it was if you're just talking about England which I think we are um well I'm having to talk about Wales for a bit but
James Cooper
we can do that in a minute
Mark Evans
look at England and yes the all the clubs are still losing money on their P&L, and it doesn't seem to be uh reducing significantly. The balance sheets are a little bit better, but not much. And so I I totally understand when people look at and say, "Well, that just looks sort of insolvent to a to a degree."
James Cooper
It's a word that's used in the report quite a lot.
Mark Evans
But it depend I I think there are some interesting developments since last year. Obviously, people talk about the Red Bull and the Black Knights into Exeter and uh minority shareholder into Northampton and even James Dyson after many many many years of being the sponsor is now the shareholder. Well, if there's no value in the clubs, then those four have got it wrong, haven't they? Now,
James Cooper
they may be wrong, but there's plenty of people who got it wrong leading up. I mean, taking you back to 95 when when the whole sport went professional. Did you think in 30 years time we'd be in a pretty much a similar position than you were maybe 30 years?
Mark Evans
No. No. I didn't think the last three years uh seriously I I I I didn't think at the beginning we'd get anywhere near as far as we've got. And again, I know that's a slightly counterintuitive view, but it was such a small sport. I mean it went from what we've never really been able to do if you want to do this is we've never aligned the key components that we've always tended to go well we're going to spend this much on players or we're going to spend this much on coaches it's not just players or this this amount on executives um and then we'll work out how we're going to pay for it and and and that's how it started which you could sort of forgive cuz there wasn't really any revenue and you you sort of well we got to start somewhere and John Hall and and people like that came in and and off we went and nobody quite knew where it was going and and and and I I I would argue that it's going into a new phase and maybe that's me being eternally optimistic but but I I don't think so. I think there's there's a these guys will know better than me, but there's a lot happening in sports clubs as assets in in the world at the moment. And I don't think it's a coincidence that suddenly you've got three or four pretty well um funded individual stroke corporate entities of various types coming looking at the sport and going that's a bit undervalued or or perhaps other sports are overvalued and that looks as if it might be worth a shot. Well, if you look back and think, well, when Worcester and Irish and Jersey, the one everyone else forgets and um the one I've I've just forgotten, Wasps, um they were desperate for a for a for a new investment and and nothing at that time, it wasn't that long ago, transpired. So, I think it's being unduly pessimistic to to say, well, nothing's changed. But one in the same time, you've got to say it's probably there's a there's a lot still to do. Let's put it that way.
James Cooper
Which Rob then begs the question, I think, what's in it for these people who are investing because, you know, we we saw the CVC investment of 200 million that's been chewed and gone away. They haven't got a return. They're still waiting those people.
Prof Rob Wilson
They are. I was really interested to hear Mark's academic answer to your first question. How do we define sustainability? And when you look at any sport, any professional team sport, you've got all those verticals. You know, it might be, do we have a sustainable community program? Do we have a sustainable revenue profile? Do we have a sustainable balance sheet in P&L? Do we have a sustainable season ticket list? Do we have a sustainable stadium? Are we environmentally sustainable? And all of those things that we can look at, most of which costs money in terms of investment. And we're always trying to balance what are we bringing in versus what are we spending. Got an interesting situation, haven't we, in rugby where we have a salary cap that is relatively fixed. That doesn't really match the revenue profile of the teams that are playing and participating within the division, which when you then talk about Wasps and you talk about Jersey and you talk about London Irish and you talk about Worcester, that was the functional problem, wasn't it? The salary cap was set too high for them to be able to be sustainable in spending against it and bringing in all their other revenues. And I think that's at the heart of certainly the work that we're doing through the Leonard Curtis business support report is where are the where are the problems in professional rugby union and how might we look to resolve some of those issues and I think the last 12 months with rugby union has been really interesting because my view is we're starting to see more fiscally responsible decisions being made at a number of clubs. Now, that might be, and I don't know this personally because we don't speak to all of the the CEOs and the investors, but I look at it and I think to myself, are you gearing up for investment? Are you looking at trimming your wage a little bit, not spending up a salary cap to make yourself more attractive? And then you have the James Dysons of this world, the CVC's or whoever else it might be that are looking at the investment that are genuinely looking at rugby union and thinking not necessarily is that better value, but it's a damn site cheaper than trying to acquire a championship or a League One football club or um or or another professional team sport and a franchise. Yet you've got a sport that has an incredible amount of support in pockets of society where you can deliver, I think, really successful business models. So some of those investors might not have got their money back yet, but I just sense that rugby union is professionalizing itself in a sustainability fashion that will make it more attractive.
James Cooper
Sustainability might be a dirty word then. I got I've got Mark's back up a little bit, Alex, but is it a question sometimes looking at B sport through a business prism?
Alex Cadwallader
Yeah, I think so. But that brings its challenges if you one quite interesting comparison is you know Mark mentioned Sir John Hall when he came in first thing he did was paid a million pounds for Va'aiga Tuigamala
James Cooper
signed you as well.
Alex Cadwallader
Well, no, that was that was a long time ago after that. Actually, different ownership by that point. Um,
Mark Evans
David Thompson.
Alex Cadwallader
Indeed. Exactly. Um, but quite interestingly, if you go and ask most of the public who have who have the Red Bulls signed since they've taken over and you hear, you know, a lot of other sort of podcast, you know, we'd love to hear the Red Bulls going out and getting Depont or Henry Pollock and making this big splash was actually looking at it from a business model and and they've been quite sensible with some of their recruitment. They haven't chased anything. They don't appear to have overpaid. They've even signed a check from um and Mark will know better from down in New Zealand that I think the New Zealand RFU want to get him out of his contracts. He performed very well.
Mark Evans
Good spot. So, it's it's a really good player ID.
Alex Cadwallader
Yeah. So, it's a different approach as opposed to I know let's go and buy some superstars and let's hope that then attracts all our crowds. It's actually being a bit more bit more responsible. And then the next question is it's almost what where do you want to get to with a sustainable sport because you know we can look at other ones and see what's happened. If you look at Crystal Palace in football the ownership changed in I think August too late to avoid being fined and losing their place in the Europa League but by all accounts they're now looking to sell they've engaged a a US um consulting um business to sell sell that sell the club having had probably their best ever season. So it's a commodity. So do we want our clubs just to be commodities that are traded? So it's always that ongoing decision. What do you want? You have a very profitable, sustainable business, but then that means people just see you as a commodity. Um and that's that's the difficult balance to strike
James Cooper
To make you feel better about being in this room having put your back up. You're you're the sort of person that people ring who are the big hitters who say, "Is this make it worth making the hit?" Do you get a phone call from somebody that looks to invest in the club? Would you say rugby union is the place to go at the moment with your with the millions?
Mark Evans
It depends on on on on what well what again I'm I'm saying depends a lot but I think that is the answer. It depends on what they're looking for it to do. So if you're looking to put it into a multi-sport investment fund, let's say, okay, of which there were many. Yeah, that that that sort of is a diversification. You're spreading your risk. Yeah, that that makes a a fair bit of sense. I mean, I think the bit that I think is missing which allows us to analyze this better is we don't know how much Black Knight paid for Exeter
Alex Cadwallader
Exactly.
Mark Evans
And and and we don't know really how much um I actually I think we do know how much the guy uh at Northampton put in for what. Um so I think that that allows you to give evaluation more or less on Northampton.
James Cooper
45 million pounded around for for
Mark Evans
I haven't heard that one. I mean I looked at the valuation for Northampton. I thought that's cheap. I really did. I mean I I looked at that and thought if that's true and you've always got a caveat there. If that is true for whatever it was 15% or something I thought that's that only values notice at that much. There's a property element in that. There's a that looks cheap to me and and and people say you can't make money in by buying and selling professional sports teams. I mean that simply isn't true. There are many people around the world who've made a lot of money buying and selling sports teams who were not necessarily profitable. Now, who's to say rugby union may not become one of those? I'm not saying it's certain by any means, but I think the jury's out a bit more than it was maybe 3 years ago. And and I often think back the investment that came in from CVC if COVID had not it's a it's a would have, could have, should have, isn't it? But if COVID had not happened, what would have happened to that investment? Because what it what where it went to be honest, it either went to clubs who were heavily indebted and they used it to pay down debt or clubs used it to get through two years when their revenue fell off a cliff and
James Cooper
So the timing in some ways was perfect certainly for the clubs.
Mark Evans
Well, you might argue um even more would have would have would have fallen off the cliff. Again, you just don't know. It's like we we we don't know the answer. We don't know whether the owners at the time would have put in more capital or whether it was just that you know what that's just too a bridge too far. You just don't know.
James Cooper
But it's the man with the figures. I mean £340 million worth of collective debt. It's a big figure.
Prof Rob Wilson
It was it was trending down. You know, the reality was, and I think we said it at the time, you know, when Worcester went, when uh when Wasps went, when London Irish went, it it was an ine there was an inevitability with that as a consequence of the financial management that was happening at those clubs, the relative success they hadn't achieved on the field and also the outcome of COVID and the and the gap between what they needed and what they had. And I do think it's fair to say that had the had the remnants of that CVC cash not been kicking around, we would have been talking about more clubs. But the converse would also be true. I think that money, the investment from CVC would have boosted the game in a way that it was intended to do net of COVID and we'd probably been talking about clubs that weren't balance sheet insolvent or at least more clubs that weren't balance sheet insolvent. um we would have started to see a much sharper trend upwards on attendances which is where that valuation I think comes in when you look at those organizations now when Alex and I talk about it we often say well some green shoots of recovery here and there and of course we're looking at past data we don't have the actual information today on what those clubs are doing but it feels like it's trending upwards better financial decisions some of those bigger more established clubs are getting more fans through the gate And they've now got that balance between their off-field financial performance and their onfield sporting performance. I've said it before, I'm a big Gloucester rugby fan. They look like they are more sustainable in inverted commas off the field on their balance sheet and on their P&L, but my goodness me, they were pretty awful last year on the field.
James Cooper
What's behind their raising money through through fans?
Prof Rob Wilson
Uh to an extent. I mean, look, the commercial director, James Forest, is doing a really good job at not just single year deals, but multi-year deals where they're getting buyin from those sponsors, but a lot of those are kind of localish. Um, which is typified in rugby, I think, more generally. Um, hence, it's so difficult for them to compete against some of the other sports where you're bringing in national or international sponsors. A lot of our rugby teams are sponsored by localish uh organizations, which naturally have less cash to be able to do it. Gloucester, like Northampton, like Leicester, like Bath have always been historically well supported. There's only so much you can squeeze your supporters on. And you know what it seems to me from the outside looking in a Gloucester is they're trying to cut their cloth accordingly. But that's having a direct impact now on their sporting performance. And they're kind of at the wrong end of the of the Prem for me as a fan, which probably means I'm less likely to try and go every Saturday afternoon because it's a bit of a trek from Sheffield.
Mark Evans
It's interesting there. There's 10 teams in the Premiership now. I think there's two there's three things linked. They're all linked in the same area that happened in the last year. So, five of them aren't spending to the cap.
Prof Rob Wilson
Mhm.
Mark Evans
Now, that that's new.
Alex Cadwallader
Yeah. Okay. And a team that isn't spending to the cap has just won the Premiership. Yeah. Yeah. And that's almost unheard of. And the team that is uh got the highest revenue of the league is ninth. M I say that but that's my team. So I I I find that very awkward. Um it's the team I support. Um so that that's interesting. So however here here's the negative side of it. I still say that the level of spend on let's say the the football department not just players on the football department that's the real indicator. Not everything goes on about the salary cap but it isn't the cap because actually on average if you look at the report on the about the average spend on players including academy and all the rest of it is about 7 million this year. It's about 7 million. Okay. Now the you look at the amount of central revenue that comes in from broadcast which is about 40 and then you have to almost count the RFU's contribution to academies as almost like like a a sort of annuity payment. That's 33. So you got 7 nearly 75 million pounds coming in regardless almost of what the club does. It's almost like you sort of and that's how most sports have tended to be organized but dominated by broadcast for 10 teams, right? He said we can all do we can all do the maths, right? So you then look at the other league I've worked in most most for longest, the NRL, Rugby League in Australia, who've just brought their broadcast deal out, £350 million, not dollars. 700 million Australian dollars. 350 million plays 40, but put the 30 through play 70. 70 over in the premiership, 350 in. Now they got more teams. They're going to they're going to go to 20. There's no question they're going to go to 20. They're at 17 at the moment. They're going to go to 20. 350 and their salary cap at the moment is lower than the premiership.
Prof Rob Wilson
We said that on the panel, didn't we
Mark Evans
The first you know it's going to go all the all the chitter chat and NRL is is is so well covered in in in you get information so quickly so everyone seems to be feeling that the salary cap's going to go to 17 over the course of the next CBA and the clubs are going to are looking for 25 a piece so they'll have a 7 million Aussie dollar margin well all I'm saying is look at the alignment You know, there's a there's a sport that generates 350 pounds and their salary cap is round about the same as the premiership. There's a significant misalignment still. The other thing, sorry to go to the last point, the other thing it does worry me, so that worries me. The other thing that worries me is I think and you're probably much better qualified to speak on this than I am, but the broadcast market in Europe looks flat to me.
Prof Rob Wilson
It is.
Mark Evans
It it looks maybe 3 4% if we're if you know in real terms just above the rate of inflation maybe maybe a couple of percentage over the over the inflation rate. So in real terms and you look at every other well look at the one I've just used look at Australia. Why why are there broadcast revenue? It's a great sport very massive coverage in two states market of 13 million people but there's competitive tension in their broadcast market massive. I just don't see the broadcast revenues not going to do a rugby but I don't see broadcast revenues in the UK exploding. So where's the big step change coming from? That that's my question.
Alex Cadwallader
And I think most sports have that have that question, don't they? They're all trying to do do that. We're all trying to find a new drive to survive to suddenly unlock this audience. Um, and it's a challenge for all of them. Probably the question I've got for you, Mark, is in what allows the NRL to, you know, manage themselves in that way to achieve that is is the governance a lot stronger as opposed to over here.
Mark Evans
Single word answer.
Alex Cadwallader
Yeah.
Mark Evans
Governance. And I do think there are some we have hardly touched I'm amazed I'm gone this early but the whole closing of the league is an really interesting development. Yeah I I I've said this for 30 years now until you effectively closed the league. I found it really difficult to see how you got a load of the governance changes through that it really does require I use the word alignment a lot but if you're going to align all the different interests the players the clubs the the league the union in our case because we have that international layer as well and it's a level of complexity um you've got to get your governance right and I don't think we have but closing off and making into an expansion league. I'm sure we'll come back to talk about that. Is a really good and and they've done some I think Simon who has done some really good things quite small things. He's brought in a salary of a cap collar so you get rid of free riders so you can't spend I think less than 90%. I've been arguing that for years and wouldn't they weren't having it.
Alex Cadwallader
Yeah.
Mark Evans
So because if you're going to close the league albeit you should genuinely want to expand it over time. You can't have a free rider. You can't have Red Bull spending three million when everybody else is spending at least five and a half. The fans hate it. It takes away all kinds of jeopardy and uncertainty of outcome. And closed leagues need every single team to be in with a chance of winning it.
James Cooper
So, franchise rugby or expansion league, call it what you like. Is that then a no-brainer? Bearing in mind that this country is is almost born on relegation and promotion. You're talking about the benefits of something being closed.
Mark Evans
No, football.
Prof Rob Wilson
Yeah.
Mark Evans
Is born six nations never had it. Yeah. The This has always staggered me, right? The the the antipathy shown by much of the rugby media and many rugby followers and yet the most successful rugby product by a country mile is a closed league.
James Cooper
That's a good point.
Alex Cadwallader
Envy of the world or Yeah. Yeah.
Mark Evans
So, I I think I I've always believed in closed leagues that can expand. Okay, I'll I'll give one and I'll shut up, but I'll promise. In 1997, two leagues started. One on this side of the Atlantic, the Premiership, the Prem. I hate that by the way. And on the other side, MLS, and they both started with 12 teams. and one a promotion relegation and the other was a closed expansion league. Flip it forward 30 years, one has 10 and the other has 32. I don't think that's a coincidence.
Prof Rob Wilson
And not only that, the franchises are growing and growing and every time you add a new one, you just put a X2, X3, X4. What was the last one? half billion dollars.
Mark Evans
I saw an article the this week saying that they the three Canadian franchise should get out, should sell and get out. They'll make a fortune and they've got I've never had how they work there. They're paying 53% income tax on the salary cap in some of the states are paying nothing. I I've I've never worked out how they do that, but but there we are. I haven't studied.
James Cooper
Has they've been crying out for this for a long time that
Mark Evans
Yeah, I think for 30 years, but that's just me.
James Cooper
No, but I mean you were doing things at Harlequins that that astonished people back back in the day without without blowing smoke.
Mark Evans
Wouldn't go that far,
James Cooper
but you you you expanded the stadium. You had more people watching. Um you you were more successful than your predecessors.
Mark Evans
Well, we did we did some good things. We did some terrible things, too. But, you know, it's light and shade, isn't it? Look, I'm I'm I've always been in favor of a closed league with managed expansion and the face. It's taken us 30 years to get there. I think it's a big step. It's it's one of my favorite phrases. It's a necessary but not sufficient step.
James Cooper
So where's it go? How do you run it successfully in this country? Bearing in mind we're we're maybe the the whole franchise system is alien to us in in some ways where we're learning or or
Mark Evans
it's not alien to cricket, is it?
James Cooper
No. 18 counties since the day dot.
Prof Rob Wilson
Yeah.
James Cooper
So So is the term franchise the thing that that's the problem?
Mark Evans
Yeah, I think so. I think it's a language thing.
Alex Cadwallader
Yeah. I think people often compare it to uh
Mark Evans
National game.
Alex Cadwallader
Yeah. National game. They compare it, but then they also compare it to the NFL and suddenly think as soon as we do that that's box tick uh box ticked. Um suddenly you're going to have people like the Jones family that became multi multi-billionaires just from owning the Dallas Cowboys. You know, they weren't major oil tycoons first. It's actually they, you know, timed it very well. Jerry Jones obviously, you know, commercially astute, but they've made their wealth from that. So, we're not suddenly going to be like the NFL. Um, but from my point of view, as I think I've always said, you know, we've got a product that broadly turns over 200 million pounds a year. Why don't we just for once not spend 230? Why don't we just spend 180 and make a bit of profit and then build from there? And then there's still the dream that um obviously you've got your club in Gloucester, but you know someone is passionate about Canterbury and wants a club there to put together a sensible business proposal, put their backing behind it, gets assessed, and then that can be added in due course. In the interim, you've got a product that is not haemorrhaging cash. You're not you're not relying on benefactors or sponsors putting money in. And ideally the governance improves because they can see the benefits all working together without the risk of actually I'm going to get relegated and I therefore don't want to you know give away my trade secrets to one of my competitors.
James Cooper
Does that money saving though hit the players because I know I know no former player that talks about having less money rather than more.
Alex Cadwallader
I I would say having spoken to players and and been at clubs where, you know, you're paid late, um I'd rather have the comfort that my club's going to make it through the season, the whole league is is stable than suddenly turning up on a Tuesday and meeting someone like me who tells them very quickly that unfortunately um they're not getting paid at the end of the end of the month. So I think for them it's the longer term a longer term play but obviously you know players want to get paid as much they can as they as as they go forward. I think the real challenge is is if and it'll be interesting to get Mark's view is the you know how many other sports can our do we not allow our elite sportsmen not to maximize their earning capacity. So
Mark Evans
well football did till 1963.
Alex Cadwallader
Okay. I don't remember.
Mark Evans
Well I was four. It was a big It was a big story in my nursery. It was a big story. No, look, the argument you made is the long run in my argument is always about alignment. Okay. If you have to align the interests of all the different horrible word stakeholders, right? It you have to align the interests the players are a big big stakeholder. You have to also align the interests of the of the fans and and the owners. And here's something that govern us again tedious I know that we haven't got that I think now we've got a chance to to bring in. We haven't got a CBA
Prof Rob Wilson
collective bargaining agreement.
Mark Evans
Sorry. Yeah. Yeah. Sorry. Thank you. Sorry. Sorry. Sorry. Sorry. We haven't got a collective bargaining agreement whereby the players get a fixed for let's say 5 years they get a fixed percentage of the revenue. That's like the debate going on at Wimbledon.
James Cooper
So why doesn't that exist right now? just because it's not in interest to do that. Sorry for asking you.
Mark Evans
Yeah, it's a good question. It's it's it's the players union's never been quite strong enough to force the issue.
Alex Cadwallader
Yeah. And they've tried to put it together. I think uh you know one of our prominent props was the face of it I think coming out of co but actually when you speak to him actually there wasn't that much sign up from from some of the other players and I think the the RPA is still part funded by actually the clubs themselves um
Mark Evans
more by the union than the club but a little bit but but I mean that's true in every sport around the world I mean I mean that that that's how players associations or don't want to call them unions you know people feel more comfortable about it um that's how they're funded that that's not because therefore you say oh they're in hawk to the unions no they're not it's just that you actually it's the hard thing to get players to buy a subscription fee that's your problem
Alex Cadwallader
I think a lot of it comes from how how they all treated very differently during COVID you know some clubs looked after their players fantastically did all sorts others just said you know your salaries been cut you know consultation so on and so on so that does bring a little bit of you know I've just got to do what's best for me do I want to be the one that's trying to upset the apple cart because of the implications. So um but you know it's a boring word but you know governance structure you know those the key key things you need in in in any business to be successful especially in such a competitive one. Um but hopefully as Mark says they've got an opportunity and they are taking steps in the right direction.
Mark Evans
I I don't think it'll be the next thing that happens by the way. I think that I think there's a whole load of other smaller issues because the CBA is a
Prof Rob Wilson
big deal.
Mark Evans
Big deal.
Prof Rob Wilson
Yeah.
Mark Evans
And it'll take I mean I worked on one for a while and it takes forever. 85 issues. Um I think there's other things that can come in quicker and more easily that they all need to be self reinforcing each other. There's no magic bullet here. There's a there's a whole load of other and that salary color was one and that's a you know tick you know a commitment to expansion over time. You know I agree. I think that's a really good thing. It'll it'll do things like I think Worcester will come back now. I look around where I if I was looking for an expansion team to finance I got to Worcester.
James Cooper
So they do their season of the champ and then they to be the prem
Mark Evans
they they've got a they got a property asset. They've got real estate. They've got a fan base. They you you go in your head you go through all these things and say well where would this work? It's it's not a question of and this is the bit I think where you're right is this is a bit alien to English sports fans. You my view would be you look for the areas where the where it's got a genuine chance of working. In other words, what's the pot size of the market? What's the stadium situation? how how how much in terms of reason I mean I made a good point about local sponsors but it does help you know and and and above all how strong's football you cannot how strong football is if you go into a market where football and I know it sounds a bit weird but in certain parts of this country and Scotland actually to be fair um football's so strong you'd be no no not Thanks a lot. But may there be maybe a lot of people there, but no.
Alex Cadwallader
So, do you think long-term Manchester and Newcastle can turn into
Mark Evans
I think Newcastle easier than Manchester because it's only one football team. Yeah. And and the thing with Manchester, you got rugby league, you got Wigan and Warrington and St. Helens. I think the Northwest is the the most difficult market for rugby union of all the of all the regions.
Prof Rob Wilson
I agree. Just if we take a step back, right, we're in a we're at UCFB. Without being too academic about this, what I'm hearing is the nature of applied workings, theory and practice. Mark's already mentioned it. uncertainty of outcome, open closed league systems, jeopardy, all the the ingredients that you need to run a successful sustainable organization. Whether that's a high street business, whether it's a airline, whether it's a professional sport organization, you need to create demand. And you can only create demand if you've got a scarcity of products. So the Northwest is hyper saturated. Football, rugby league, netball is pretty big in Manchester. Um if you look take lessons from rugby league, hugely concentrated and powerful um M62 corridor from east to west. One of the only types of sport that we have actually that goes horizontally across the country. And when we look at what happened with Rugby League, we've got some key lessons in there. So they open a franchise in Cardiff, failed. They open a franchise in London twice, failed. they open a franchise in the south of France has been moderately okay. So the expansion policy the ingredients you need for that are exactly as Mark and Alex have just described. What are the where's there a lack of competition but where there is an opportunity to gather that support. So maybe I'm a little bit boring. I look at motorway corridors right there's a heartland isn't there for rugby union across the M4 from London across to Gloucester. You could probably creep into Wales and go towards Cardiff if you want because there's a bit of disarray, isn't there, in Welsh rugby and then you probably pop down the M5 corridor to pick up Exeter. You might even go into Cornwall.
Mark Evans
No, I think I think there's room for one more in the far southwest.
Prof Rob Wilson
Yeah, agree.
Mark Evans
I really whether it's Plymouth or somewhere in Cornwall. Yeah, I there's definitely enough people.
Prof Rob Wilson
There's a huge amount of support. There's a lack of professional football. there's a lack of rugby league and you have communities that are interested in sport and want to follow organizations when we look at the US model it's a hyper commodified and commercialized system the big key difference for me if we put aside open closed league systems we put aside salary caps draft systems academy structures all the things that are nuanced in western Europe and in the states the one big difference you get in any franchise-based competition is the winner doesn't take it all. And each of the owners understand that I only exist if I can play against you. You only exist if you can play against him and you only exist because you can play against him. And collectively, we will organize our competition so we play each other. We'll create a collective bargaining agreement and a distribution system where if you lose a lot of games this year, we'll help you out. will prop you up because you being competitive is really important to our product. And I think that's the unique opportunity that faces professional rugby in England right now is we've lost some historic clubs. We've decided or the union has decided um and the prem has decided to close the system but has this expansion idea. So now it has a responsibility to ensure that those clubs run sustainably and that they understand that it's important for each of those clubs within the 10 to be competitive because that will nudge up the value nudge up the TV because uncertainty of outcome increases. We don't know who's going to win. I mean when Northampton won the playoff we hadn't expected it. So there was you know it was hitting the back pages. was hitting mainstream news because it wasn't an expected outcome necessarily. And I think those are some of the conditions you need to really produce a product that is going to be commercially sustained.
James Cooper
The report takes it kind of one step further by even talking about drafts for academy players in a centralized academy system for for the expansion. And that's would that work?
Prof Rob Wilson
Well, it in theory, but the social capital, the cultural value, the the way that we are wedded as a society to even talk about an open and closed league system, Mark referred to it, is almost that's the dirty word is you're not going to have promotion relegation. What do you mean just have promotion relegation with everything?
Alex Cadwallader
If you just look at the reaction that messes Neville and Carragher created with the European Super League, um, and you know, they're going to burn down Anfield. the fans won't have it. So on and so on. So um most rugby fans are sports fans. So I agree with Mark. It's almost this message almost embedded on you uh really imprinted on you that you know it's a close shop is is not good. You know you want to have the dream that your local town can come all the way and be champions of Europe. But in reality nowadays that isn't the case. You know, I've done a a few um you know, podcasts uh looking at the Welsh game and you know, you can't have a more passionate um audience and um you know, a great product on its day. But unfortunately, we've moved on a long way from Ebbw Vale beating the All Blacks or Swansea beating the All Blacks and comparing their their metrics to La Rochelle. It's chalk and cheese and you can't you know, you can't do the same thing. So,
Mark Evans
It's just too small a market.
Alex Cadwallader
It is. It is. And I know one of the question I was put to you Mark, you know, if you had a blank bit of paper, would you go so far as to say actually why don't we just have rugby as opposed to rugby league and rugby union? Um because for me the games are relatively I'm a fan of both.
Mark Evans
I like both and I've worked in both and you know I was an owner part small percentage at Melbourne Storm. Um you know and still am. Uh, I think the cultural resistance to that will would make deal with the franchise. Well, look, I still grief for 1895. Okay. I'm one of the few people in the world, I think, who still looks on it with a, you know, when the centenary the bicentenary
comes around if I won't be alive. But I would grieve because I'm a real nerd on the history of the game. That was one of the big thing. The two things that condemned rugby union to a rugby sorry to a minority position in this country was one the the refusal in this 1880s to have a national cup competition and the 1895 split. Those were the two things and we've never war recovered from it. But I do think it's interesting go back to the NRL to look at what the other rugby code has done in a market not dissimilar in size to England. the rugby league market in in in Australia it's about 13 million people. It's it's New South Wales and Queensland basically and there's bits of other sports obviously but it's not far off what the rugby market is in in this country is about 10 million and you look at some of the things they've got and this is why I keep coming back to this point about going for a closed expansion league. What I hope it will do is make it is to basically empower the executive and the league and that the clubs bit like what I was saying that they step out and they they've struggled with this for 30 years. What matters is what's good for the collective not what's good for individual one or two clubs. And I would still argue, I'll be very unpopular for this I'm sure we still got we've still got a largely shareholder board, which effectively means the clubs and CBC. Yeah. And I'm sorry you're conflicted. You you you just are. When push comes to shove, it's almost impossible to separate what's good for your club that you own, stroke, work for, represent, and what's good for the league.
James Cooper
So, how do you change that mindset? Is it you change?
Mark Evans
No, you changed the Yeah. No, not at all. Well, Australian Rugby League did it in about 2008 where they got so fed up with the clubs almost destroying value in their fierce determination to win over their local rivals. The clubs went to the Austra said, "Look, we accept it. We've got it horribly wrong. Look, you do it. Elect a commission. They run the game. You do the CBA. you do the broadcast deal, you do and we'll just And now that's not to say a club still haven't got some power. Of course they do. They've got significant power. But the the balance has changed sign and it's no coincidence that 20 years on from that fundamental governance change, they've exploded. They've just exploded. They've got other things working in their favor too, of course, but that's quite a big bit of it. And I'm hopeful that now we've crossed the Rubicon of closing the league off, we might start to address some of the other things.
James Cooper
So when we look at rebrands, the second tier of rugby is being rebranded as the champ. Where does that leave the champ in terms of closed leagues and expansion leagues?
Prof Rob Wilson
Mark's just looked across here at me. I won't try.
James Cooper
I gave him a bag of sick, didn't that, which you then handed on
Prof Rob Wilson
because it's contentious, right? Because of all things we've just talked about around cultural capital and how we want to follow our teams. So without being too controversial stroke provocative some of these some of the teams that will operate in the Prem will need to have uh larger shares of the talent pool market. So I think a lot of the clubs in the champ will become the training ground for some of those elite players and I don't think we should shy away from that. You know we see it in so many other sports where academy structures will produce high quality talent. there's an opportunity to bring those into first team and then you can then progress those through. If you look at cricket when we do the cricket podcast we'll talk about player performance index and how players are developed in smaller counties and then they'll graduate up and then ultimately play for England. Now there's a funding mechanism that supports that by the way. So I think that's ultimately the champ will become the the training ground for the elite talent that will participate in the Prem and will feed England, Wales, Scotland, uh uh Ireland national teams if necessary and if if able, but that won't detract from the standard of competition in the Champ. It will reduce some of the operating costs actually because they won't have to build bigger stadia. They won't have to buy land to improve the infrastructure of the stadium and that type of thing. Now, you might rightly say to me, well, that's not very ambitious for clubs in the champ. But I think we have to be realistic about the value of rugby union and what it can potentially generate as a national.
James Cooper
But you're right, those fans are the teams knocking on the door. So, we've been knocking for ages. We kind of continue knocking.
Alex Cadwallader
Yeah. And they can keep knocking. But unfortunately, you know, we've got to be realistic that, you know, can these clubs compete at the highest level in terms of the funding that are acquired and there's going to be a massive revenue gap for them because they're not going to have the same amount of money coming through the door. They're not going to have the infrastructure and then how does that impact upon the product. Um and even when you speak to um the the board at the championship, one of their concerns is you know we can't really get a great sort of commercial rights offering because some of the facilities don't look great on screen. Um and you know it's the same with Bernie Eckleson with with Formula 1. It was he massively focused on what does my product look like uh when it's being beamed around the world. So, you know, there aren't that many great um stadiums uh dotted around in the championship that will look great on on on your screen. So, I think they've got a a great role to play. I love playing in the championship. Um you semi-professionally traveling around and the local community can still get behind those clubs. Um, but there's nothing wrong with the owners of those clubs, you know, just accepting what that club is. And it isn't necessarily going to be the next La Rochelle or Bordeaux because being blunt, comparing Doncaster to Bordeaux. They're very different um towns and and cities.
James Cooper
Now, Mark, does it naturally sit at 12 teams ultimately or even 14?
Mark Evans
No, I don't think it naturally sits at 12. No. Um, I think probably 14. Uh 16 is quite an interesting number. You can do some interesting things.
James Cooper
You made 11 work in super rugby.
Mark Evans
We did. Yeah. Not very well. But yeah. Um but you can I mean that's the thing. You can make any number work. That's not the point. I mean the the the again the NRL's been working with 16 teams now 17 soon to be 18 19 20 for years. But not when this is another shibilith uh great word good words. Um not you have to play everyone home and away. NRL don't. NRL don't, you know this this idea that because football does it somehow you have to copy that will you you you could 16 could do you could do some interesting stuff you could play everybody once and certain team and local derbies twice bit like do that to a degree so I don't get hung up on the number of teams I get hung up on the the let's not bring in another team and then wonder how we're going to fund or how they're going to fund it. That's that's the key. That's if I if there's any lesson to be learned of the last 30 years is don't expand in hope. I mean that I think has been rugby leagues problem, right? And I'm I've been a big supporter of York Knights expand into York. Why? Well, there's 150,000 people in York. It's got a bit of a rugby league heritage. Football's not massively strong with all due respect to that great game they played at the last. They got a wonderful stadium. It's a absolute cracker of a stadium. They got a really good stadium deal, right? And that gives you an audience with all you're never going to get a big enough audience. I'm going to upset my mate Nick Easter now out of China, right? It's it's a tiny little It's not It's barely a town, right? What they've done is absolutely sensational. You're not going to get it out of Antill. There are a whole load of clubs in the current champ who just want to have a decent side and play at the highest possible level that they can and there's nothing wrong with that. Right. But the idea that somehow somebody comes along and puts in a couple of million and they win it, they should get promoted is ludicrous. Absolutely ludicrous. That's not viable. That's not that that's not what we're after. You look at the people are very critical of the first 30 years. But one thing I would point to and I have to a degree but you look at the millions that have gone into stadia in rugby union in this country in the last 30 years. We had a situation whereby the only grounds of any size were in the west country in the Midlands the north and the southeast where it was not a spectator game. It was a players game. You know you'd go to watch Harlequins in the in the 80s they were great side. They had about 600 people watching. Didn't matter. Didn't matter. Look at the stadium now. Look at what Saracens
a build in Barnet. Look Exeter look at Exeter. You know they you say, "Oh, they were lucky. They had a they had a sit." Well, okay. Well, luck plays a part, too. Yeah. They had a ground in the middle of the of the of the city that they were able to sold, but they did really good things with it.
Prof Rob Wilson
And when they built the new one, they didn't build the whole stadium at the same time. Temporary stands. And as they got better and brought more money in, they made
Mark Evans
Stooped in four phases. That's just as important as your team. In fact, I would argue probably it's more important. But you've also got to have a market. You've got to have it's the same as broadcast. You got to have an audience. If you haven't got a real audience that isn't already captured by another code or another sport or another team, it doesn't matter how well you run it. it it's it's not going to work and hoping so won't make it so and and but I know people think that's oh that's lack of ambition no it's not it's just being realistic
James Cooper
it's experience though isn't it
Mark Evans
Just being realistic anyone could do those numbers
Alex Cadwallader
The bit I always find quite interesting is the approach you take and if you know we're not talking about Welsh rugby but you from afar you see how they've tried to restructure there and it's almost okay well we're really focused almost on the performance of the Welsh team and those two teams therefore to make those competitive and obviously they initially said well we think it's two teams but you know push back was so great let's go for three and they've actually now just put their hands up and say well we'll leave it as it is at the moment but it's a different way of looking at it saying as opposed to not necessarily financial stability but actually to have a product that the wealth public want to go and watch and engage is we have to condense to have two strong regional teams and then a strong national team.
James Cooper
I don't want to open a can of worms, but anytime
Mark Evans
it'll take hours
James Cooper
I know anytime anyone mentions Welsh rugby, you almost curl up in a ball.
Mark Evans
I do. I do. I'm sorry about that. Yeah. Um it's just so difficult and uh honestly I it's so complicated and I would take hours and hours and hours, but we haven't got that.
James Cooper
We haven't got that.
Mark Evans
So I'm not going to go there.
James Cooper
But what I will do by I'll finish with a quote by James Haskell who said that franchise rugby or expansion league isn't going to be a silver bullet for rugby union. He said no. It's going to be a system designed to change
Mark Evans
Key step.
James Cooper
Um so my first question was how do you make rugby union sustainable in this country? Is that the answer to making it more sustainable rather than properly sustainable? Because you you kind of rallied against it needing to wash its face because it's rugby union.
Mark Evans
I I'm not I'm not saying I I I suppose what I'm saying is to just to measure it by a narrow load of metrics is not helpful and that but I do agree that the structures and the governance and the lack of alignment we've still got you know is a problem. This step mitigates that and offers opportunities to mitigate further. That's one.
Alex Cadwallader
Yeah. And to quote Rory McIlroy which I would normally
Mark Evans
Oh, no.
Alex Cadwallader
I think
Prof Rob Wilson
big Ulster fan.
Alex Cadwallader
Yeah, he is big, wasn't he?
Mark Evans
Yes.
Alex Cadwallader
Yeah. Um, he said, "You don't rise to the level of your goals, you fall to the level of your structures”, and it comes back to what we've said.
Mark Evans
Never heard that one. Did he say that?
Alex Cadwallader
He did. Yeah, I'm sure he quoted someone else, but he was going to say it. Yeah, I might to be fair, I quite liked it for, you know, I was writing a business plan in my day job early in the week and uh I saw that, but but it's true. It's what we've said. You know, it's all great having these lofty ambitions, but unless you've got good structures and processes in place. I know it's boring. No one likes it. Everyone just wants to have this passionate leader or passionate benefactor that's going to go and sign Anton Dupont and um Ardie Savea and suddenly, you know, everyone's going to be tuning in on a Thursday night to watch Rugby Union here. You know, that doesn't work. Unfortunately, we've tried that.
James Cooper
What do you think, Rob?
Prof Rob Wilson
I think that's why we called the podcast Sport, Structured, isn't it? it. The fundamentals are absolutely critical in building sustainable long-term viable businesses and for us as fans hugely interesting competitive matches of of rugby union in this sense.
James Cooper
I want to bring it back finally to you. Um you've done everything when it comes to rugby union and and bit rugby league as well. What did you enjoy most player, coach, CEO, investor, fan?
Mark Evans
It's It's hard to beat playing. It is. I even though I wasn't a particularly good player, I played at a reasonable level, but 100 games Saracens. Yeah. Yeah. But we weren't nearly as good in those days. We But um it is hard to play playing. I No, I honestly I I loved it all. I I mean I'm I'm still as besotted with it as I was when my dad took me to Cardiff at six years old and I watched Gareth Edwards and Barry John and Gerald Davis and thought all club teams were like this. Um no I just I find I'm very passionate about it. I find the game it drives me mad that it doesn't grow quicker because I think it's got all the it's gladiatorial It's you got to be brave. It's got collision. I love my collision sports. All right, they're my favorite. I like American football. I like rugby league. I like rugby union. Can't quite get next to Ice Hockey. Uh, but I like it's got all this great stuff in it. The people are really on the whole very very decent, hardworking people. And it drives me mad that we're not we the game is not bigger than it is. Albeit I do recognize I've seen massive growth in my in my time.
James Cooper
Will you come back for part two later on the year? Because we could do we could do hours.
Mark Evans
Be a pleasure.
James Cooper
Thank you for your passion. You're insight. Thanks for being here. Alex, Rob, gentlemen, thank you. Thank you. And that's it for another episode of the Sport, Structured Podcast with Leonard Curtis. Hopefully we proved we do things a little 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.
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.
