news.bbc.co.uk/sport1/hi/rugby_l ... 137097.stm In financial difficulties by the look of it....

news.bbc.co.uk/sport1/hi/rugby_l ... 137097.stm In financial difficulties by the look of it....

Weren't Halifax and widnes rejected because of financial difficulties?

Double standards are evident IMO.

I often wonder at just how difficult it could be to run a rugby club as a business when right from day one you know what your overhead cost is going to be and you know what the bulk of your income is going to be - those are two advantages that the majority of start-up businesses don't have.

How difficult can it be to cut your cloth to £xxxxx amount per month and how stupid would you have to be to set a budget at £xxxxx + 1 and hope that the crowds and sponsors flock in ?

I take it you're a millionare MF?

you don;t have to be a millionaire to be a good businessman

No, but if someone gave me a limited amount of money per season to run a team of professional rugby players with and told me that we wouldn't be relegated for three seasons then my first seasons budget, taking into account all of the overheads, would very simply be contained within that limited amount of money, future income would not be presumed or spent and marketing of the team in the local area and amongst local potential sponsors would be a priority.

If you remember, this was how GH managed Leeds in the early days of SL - there are private individuals on here who were individual first team player sponsors for £1000 a season - you can't do it for anything like that price any more but that sort of income doesn't come in from day one or even season one, hence the franchise system.

You are correct, but still looking at it too simplistically.

The fact remains that when they were accepted for a licence the economy was completely different to what we are experiencing now.

Wales inparticular has been very hard hit by the recession, with a lot of what limited industy was left going to the dogs. This could have a very big effect on crowds that may have been there had this not happened, and more importantly corporate sponsorship.

Of course no reason why they can't get a correct budget together for next season though, knowing what they know now.

IF they do end up going under, Halifax/Widnes/Leigh etc are much better prepared to compete in SL then they were prior to the franchise system IMO.

Yes agreed. Apparently the RFL are seeking additional investors for the Crusaders... it makes you wonder what on earth the management team at Celtic have been playing at. Perhaps they were expecting bigger crowds ?

I think it was too early for them to join Superleague personally. You can't just magically make thousands of fans turn up every week, the quins have been going ages now and look at their attendances.. very worrying for the future of welsh rugby league..

Its a fairly simple problem though isn't it - fact is that they seemed to have budgeted on forecasted income and then not adjusted that budget when the economy slowed down fifteen months ago like most other businesses did.

These are difficult times but most businesses who are surviving are doing so on very constrained and constantly readjusted budgets and despite what Government figures say we saw this coming at least fifteen months ago - staff have been shed, and wages cut in many businesses in order to run with the income you have rather than the income you thought you MIGHT have.

There is nothing difficult about it, its simple economics.

Not really. Our business was thriving up until November 2008. Last year was our record year. We had orders coming into 2009 larger than we had at start of previous years. Suddenly in November 2008 new orders hit a brick wall.

We had to adjust with staff pay, and shortened working time etc. We still put a budget in last October for 2009 much higher than we are going to get near this year, but in October we had not experienced anything like what all companies have since December 2008.

We were lucky to have the flexibility for shortened time and adjust pay. I dont think the Crusaders have that same flexibility because of the nature of their business and contracts having to be fullfilled.

The RL are doing it the right way, by assisting them. I feel sorry for them, it must be an hard job to set that club up for a higher league whilst experiencing the recession this country has had, whilst getting it worse still in their particular region.

We hit the brick wall in April 08, I've been telling everyone ever since that that is when the recession started and last week the Office of Stats finally seemed to agree when they re-adjusted their downturn figures.

We adjusted our budgets by closing our Leeds office, drastic aciton but unavoidable, I now work from home which is great fun, wish I'd done it years ago



Its easy to be cautious with hindsight but I can't help but feel that if Gary Hetherington had been running the club then they wouldn't be in the situation they are now - I think they used the Maurice Lyndsey method of forecasting rather than the Hetherington one.

Exactly - when you're running a professional sports club your income tends to be both fixed (TV rights, shirt sponsorship etc) and variable (crowds, corporate bookings).

You budget your expenditure, which is by and large fixed (stadium running costs, wages), based on a reasonable estimate of your total income. If your variable income drops right off or turns out to be not as much as you were expecting, it's hard to then cut back on your expenditure which is mostly fixed. You're left with just trimming around the edges making cosmetic cuts while still trying to retain the staff and services which generate your revenue such as marketing.

I thought the owner(Is it Leighton Samuels) was supposed to be a multi millionaire or is it something I have imagined.If so I would have thought he would be able to fund any shortfall for a season at least.Apparently they budgeted for average home crowds of 4500,which they have only achieved 3 or 4 times out of 9 home games.
BTW how the heck do London survive on their attendances ?

Corportate Sponsorship. Something like I said above that Crusaders would struggle with at present due to the region they are based in, which is effected much worse than others by the recession.

Indeed. I'm a millionaire and I'm a terrible businessman.

The owner digging into his own pocket is all well and good and plenty of clubs have owners who do just that but its only sustainable for so long and it seems what the RFL are doing is helping them get something in place that is more sustainable for the long term.

They'll be giving a shedload of backhanders from the RFL.

There's no way they'll want another PSG on their hands, practically rendering the franchise scheme useless.

Unfortunately many "paper" multi millionaires are feeling the pinch now, they have commitments to banks etc and their investments are falling. The only good thing from their perspective is the fact that interest rates have tumbled.

The RFL also offered help to the Dragons during their first season in SL, accroding to an article on the BBC, and they've managed to push on since then. Hopefully the same can happen down in South Wales. As others have said, it will make the whole franchise system look foolish if they fold after 1 SL season.

Oh, and I've also read they're thinking about going on the road more next year, with both Wrexham and Llanelli mentioned. A good idea to get interest around the country, or stupidity in not establishing yourself at your core base? Any more than 3 games "away" and I'd say the latter.

Yes,but how many clubs would survive without benefators.It is certainly true the Leeds Tykes would not exist without one and it applies to quite a few clubs in the Union premiership.

Maybe they'd budgeted for Millennium magic to be only a few miles up the road, so no overnight stay. Then the RFL got involved.

Agreed Matt!

That is the point though and why Celtic - and other clubs who are over reliant on one investor - need support in order to try to ensure that the clubs finances don't mean they have to rely overly on one person investing money - they can only do this for so long.

London broncos went tits up a few years back, the RFL just let them off £3,000,000 & re-merge,
No way will the RFL let their welsh baby go under.