The Rugby Football Union is braced to lose as much as £50m over the next 18 months due to the impact of the coronavirus crisis, with head coach Eddie Jones set to be asked to follow chief executive Bill Sweeney into taking in excess of a 25 per cent pay cut.
England boss Jones is the highest-paid head coach in the international game, with the Australian understood to be on a deal worth £750,000 a year that runs through to next summer.
But the RFU are currently discussing drastic measures to minimise the impact of the coronavirus outbreak – which has seen all rugby union below the Premiership cancelled in England – that comes on top of the 2019 Rugby World Cup costs, meaning that the governing body expect to lose between £40m and £50m by the start of the 2021/22 campaign.
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As a result, chief executive Bill Sweeney has agreed to a pay cut “in excess of 25 per cent” along with the rest of the executive team, and further talks are planned over following suit with the entire coaching team.
“The RFU had budgeted for a loss making year within a four year cycle due to the costs of the 2019 Rugby World Cup campaign and hosting only two home Six Nations games,” Sweeney said in a statement. “The loss will now be considerably more as we face challenges similar to businesses across the country.
“The RFU’s biggest asset is also a major cost and the closure of Twickenham Stadium has a significant impact on the revenues we can generate to re-invest back into the game. In that sense we are like every other club in the Union, when we do not stage matches and events we do not generate revenue.
“Based on our planning assumption we estimate RFU revenue losses over the next 18 months to be approximately £45m-£50m and have a firm plan in place to mitigate this. The RFU executive team will be taking a cut in remuneration in excess of 25 per cent. In addition, combined board fees will be reduced by 75 per cent.
Sweeney is believed to be on a salary in excess of £500,000 a year before bonuses, which puts him among the best-paid sporting executives in the world, meaning a pay cut of around £50,000 if spread out over the next three months. The former British Olympic Association chief executive’s predecessor, Steve Brown, earned £600,000 a year while in the position, while Ian Ritchie took home a record £710,000 during his five-year stint in charge of the governing body.
Sweeney also announced a £7m loan package for community clubs to help them through the financial difficulties that will come due to the outbreak of Covid-19, with £1.4m of future payments released for immediate use and £5m allocated for supportive loans of between £2,000 and £10,000, with deferred re-payments for six months that will need to be fully reimbursed within three years.
Quarterly loan repayments of £335,000 have also been suspended until August for any club with an outstanding debt, while an additional £400,000 will be made available to Constituent Bodies who match the fund from their own reserves, providing they have the money available.
The funding programme will be made available for clubs in the National One league and below, but does not include the Premiership or Championship sides.
The RFU will next month provide clarification on what will happen with relegation and promotion across the country after leagues were scrapped last week, with uncertainty over who will replace Saracens in the Premiership following their automatic relegation this season. Newcastle Falcons led the second-tier Championship by 15 points at the time it was abandoned, but Ealing Trailfinders have already taken legal advice over a possible challenge should Newcastle be granted automatic promotion as they had not mathematically won the league.
“Significant progress has been made on the process for considering the implications of ending the season early,” Sweeney added. “We will ensure a fair and balanced outcome for the game and are now committed to update on this by the middle of April.”
The RFU is also in negotiations with the National Health Service over opening Twickenham Stadium to “in provide volunteers as well as support for the NHS including accommodation, parking and meal provisioning”.e