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How Global Financial Crisis is Affecting Rugby Football in Europe

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In recent times, the implications of the Crisis on sports, rugby included, has began to show. Teams have started to feel the pinch and many have started taking measures to brace for the looming tough times ahead.

While every rugby team aims to crown their season with some sort of silverware to mark their success, more and more teams are becoming wary when it comes to signing new players. This is due to the high transfer fees demanded for players.

Continental Glory

As a result of this, club coaches are making do with what they have, even at the expense of continental glory. Rugby clubs in Europe seem to be more concerned with maintaining their top flight status in their domestic rugby leagues and less concerned with concurring the continent. And can you blame them? To win a continental trophy like the Heineken Cup requires a team to have depth in the squad. To attain this depth, a team needs to have a few big name signings on their team sheet.

€700 000 Spending

To have such players a club has to splash out about €700 000. But with the cash crunch starting to bite hard on the sport in Europe, few clubs if any are willing to spend such an amount on one player.

Negative BalanceSheet

The situation is the same across the board. Big clubs are also crying out for cash injection; with many barely been able to remain liquid. Many have reported negative results in their end year results.

Financial Plea

In the UK, Wasps reported a £2.8million loss; while Bath and Newcastle were lucky that their benefactors were willing to dip into their pockets to assist them. Others like Bristol are finding it difficult to even meet their players wage demands and have resulted to making public plea for funding.

Salary Caps

If will be interesting to see what will happen at the start of the next season if the current situation prevails. According to the games Chief Executive in the UK – Mark McCafferty, there are two ways of dealing with the crisis. One is to drop from the top flight rugby. This will leave a total of 10 teams which will share the revenues generated. The revenues are set to grow in 2010 when the new broadcasting deal commences. Should this happen, then there will be no need of reducing the salary cap.

Conversely, however, the salary cap is not likely to be raised as that would not reflect a true picture. In addition raising the cap would only do more harm to clubs with less liquidity. News that Italians will be bidding to have 4 teams representing them in the Magners League during the 2010/11 season is no doubt good news to the Celts. The three nations Scotland, Ireland and Wales seem to have little option but to let the Italians in given the size of the Italian market and the revenue potential it holds. France clubs will be faced with an interesting challenge given the fact are less restricted when it comes to spending. Clubs like Toulouse and Stade Francais, however, will definitely be shy to splash their money during the new season.

More news can be found at ScoresPro.com rugby sports news section.

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