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It was recorded in the Times recently that the Bristol Bears, reportedly the wealthiest Rugby Union club in England, will not spend to the upper limit of the Gallagher Premier’s £6.4m salary cap next season after TNT Sports agreed a reduced deal for the rights to broadcast top flight matches, writes David Little, a partner in our Corporate and Commercial  department who increasingly handles Sports Law cases too.

Bristol have decided to ‘cut their cloth’ because the central funding they will receive from next season has dropped significantly, largely due to the fall in TV revenue.

Over in Rugby League Coventry Bears’ (no relation to Bristol Bears) founder and owner Alan Robinson has warned that central funding cuts in his sport could mean the end of professional rugby league in the Midlands – and that the whole of the sport needs to take a forensic look at itself.

A reduced Super League TV deal mean clubs at all levels will face reductions in their central distribution, with Championship London Broncos announcing that they will move to a part-time squad next year as a direct result.

But those in the third tier League One will be hit the hardest. Those clubs are working on the basis of cuts of almost 80 percent in some cases, although the final figures have yet to be confirmed by the RFL, and Robinson – a former Ireland international prop – says that could be the death knell for the Bears despite the best season in their history this year.

Coventry have beaten more established rivals Keighley, Hunslet and Rochdale to supplement an extensive community programme in the local area. The city will also host Rugby League World Cup matches next year, but could do so without a professional club if Robinson’s worst fears are realised.

The Bears could lose around £60,000 in funding next year – more than their entire playing budget but less than a salary for an individual Super League player.

Reported in the Mirror, Robinson said: “This sort of blow is catastrophic, there’s no way to sugar coat it or beat around the bush. I don’t want to be negative because I’m not that sort of person, but it’s extremely frustrating when this is happening to such a new club doing everything the right way.

“I’ve been very open about the fact that we heavily rely on central funding because that is our model – we are still establishing our business as a professional sports club. I know there are some people within the game that say that doesn’t constitute a professional club, but my argument to them would be how many other clubs have gone bust when owners stop pouring their money in?

“To me it’s about running your business accordingly, and such a large funding cut as this could mean the end of Coventry Bears, I want to be honest about that. How many new businesses could survive a loss in funding with such little time to establish itself? Other clubs have been around for decades. We are six years into the semi-pro game and we are a developing business not a millionaire’s plaything. There has to be room for true sustainability.”

Cutting one’s cloth accordingly will also be on the minds of those teams fighting promotion and relegation this month in the last games of the football season. The Premier League in particular has been notorious for its runaway spending in the past, but if Everton and Nottingham Forest, both docked points this season for breaching Premier League financial rules, can be fined, but still let their football do the talking, we might have turned the corner.

 

Contact our Corporate & Commercial and Sports Law Solicitor

David Little is a Partner at Bishop & Sewell in our expert Corporate & Commercial team. If you would like to contact him, please quote Ref CB467 on either on either 07968 027343 / 020 7631 4141 or email company@bishopandsewell.co.uk.

The above is accurate as at 14 May 2024. The information above may be subject to change.

The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.


Category: Blog, News | Date: 14th May 2024


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