What Responsibilities Do Governing Bodies Have To Clubs In A Financial Crisis?

It is an issue that fires up a lot of fans and one I think is pretty clear cut. What happens when a clubs finds itself in a perilous financial situation and is fighting for its life. Should a governing body step in and take control of the situation, or should they stand back and let things play out, even if that means the death of the club in question.

Between the NRL and Super League we have seen man different approaches going from one end of the scale to the other.

Letting a club die, giving them funding, taking them over, mergers, administration….there are many different things that can happen when a club is on the verge of being broke.

In England we saw the Wakefield Wildcats shut down one weekend, and then restarted with the same name, players, coaches and team colours the next week. In Australia we have seen the South Sydney Rabbitohs kicked out of the competition and having to force their way back through legal means. It seems like nothing is off the table.

Rugby League is a big business and governing bodies that control various competition have contracts they have to honour. Contracts with sponsors and broadcasters are pay the games bills, and at the end of the day these contracts will not be very valuable if a company doesn’t feel like it is guaranteed to get what it payed for over the life of a contract.

For that reason, I like to see governing bodies being proactive when a club finds itself in trouble. In fact, I like to see a governing body step in at the first sign a club might be in trouble and try to help them out of it the best way they can.

The Salford Reds have been a club that has struggled for as long as I can remember. For at least a decade the club held on to the great hope that a new stadium would be their financial savior  After many false starts and a number of different plans being paraded to the media, Salford eventually got themselves a new stadium.

Then, they pretty much announced that they were on the brink of collapse.

Over the last few years Super League has seen the Wrexham Crusaders, Wakefield Wildcats, Bradford Bulls, Castleford Tigers, Hull FC, Hull KR, St Helens, London Broncos and Salford Reds all report some financial concerns ranging from all out death to losing hundreds of thousands of pounds. I didn’t even mention the Widnes Vikings that went into administration not too long ago while they were still a Championship One club!

The financial model Super League is run under is completely broken. Most of the competition would die off with the slightest push. When clubs like St Helens and Hull FC start saying something needs to change, you know the problem is real.

In the NRL the Gold Coast Titans found themselves under a gigantic financial burden with their “center of excellence” and various court cases threatening to bring the club down. The NRL waited for the club to try and work things out, and when they couldn’t, they stepped in and basically took control of the clubs for a while. They made deals to ensure the survival of the club, but they also made sure some of the people that steered the club into the financial problems were moved on.

To me, that is the way things should be done. When I hear a club is in trouble, I would hope the people running the competition are there at the club and trying to get everything sorted out.

Luckily for the NRL, it now has the money to do enough to ensure a club won’t fold again. Super League clubs do not have that luxury. Even the more financially sound clubs rely on the generosity of rich backers. Without them, they are simply not viable as a stand alone entity.

The Rugby Football League can’t afford to stand back and let clubs die. They should be giving the Salford Reds all the help they need and make sure they survive well into the future. Having said that, it is clear that the financial model in play in Super League needs to be fixed. The salary cap needs lowered by around 40%. If that happened, every club would be viable.

Would the competition lose players? Yes. The thing is, it is going to lose players anyway because there is more money elsewhere and it comes with a promise of financial security.

A proactive administration is what the game needs. The Rugby Football League needs to step up.

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