PRL's Pot of Gold?

On Wednesday Premiership Rugby (PRL) announced a stonking new TV deal worth “up to” £152m with new players in the Rugby market BT.  You’d have thought this whopping TV deal would have been welcomed with open arms, especially in a double-dip recession, but no!  European Rugby Cup (ERC) immediately pooh-poohed the deal claiming that PRL had broken IRB rules, they don’t say what, and an ERC mandate, they don’t say how.  This is because as well as selling domestic league games PRL sold the rights to their clubs home games in some, as yet unknown, European competition(s).  4 hours later ERC & Sky announced a renewed deal for the Heineken Cup and Amlin Cup for 4 years beyond the current contract which ends in 2014.

PRL gave their notice to quit ERC on June 1^st, as did LNR (League National de Rugby) their equivalent in France, effective from June 2014.  You may have spotted a rather obvious problem with ERC’s plan at this point.  That is that ERC won’t exist past 2014, at least in current form and certainly not with English and French clubs, and even if it were to be saved at this moment in time it has no right to sell English club games beyond 2014.

Now ERC claim that PRL had no right to sell the package they did either; that is simply not true.  PRL have sold the rights to their own games in any future tournament, something they are completely within their rights to do.  After all the SANZAR nations sell their rights individually to domestic TV so the IRB clearly have no problem with this arraignment.

If reports are to be believed PRL’s deal is split into two parts: an £100m domestic deal and an £50m European deal.  ERC haven’t released the amount of their new Sky contract but last year PRL received £8m from ERC as their share of the collective spoils.  English clubs receive 24.5% of the ERC pot (alongside the French, the Irish, Welsh and Scots get 14% each whilst the Italians get 9%) which by my maths makes the overall total £32.65m.  That total includes the sponsorships paid by Heineken, Amlin, FedEx, Addidas, Land Rover and the TV rights to France, Italy, Ireland plus the TV rights to the Ulster, the Welsh regions and the Scottish regions in the UK.  This deal is, reportedly, worth £17m more for significantly less.  The French rights would be worth a similar amount to the English rights, with the sundry other deals also to be added on top it is hardly optimistic to state the total value would top £100m.   That is a 200% increase in revenues.

So why are ERC so exercised over PRL’s deal?  Obviously PRL have to some extent gone behind the backs of their European partners, but more than that ERC, or rather the constituent unions, are worried that the clubs are becoming too powerful and their own influence might be on the wane.

Will ERC really be able to turn their collective noses up to over £100m?  I doubt it, the Welsh game is in disarray domestically and is desperate for the cash, similarly the Scots, Irish and Italians heavily subsidise their domestic games with revenues from internationals.  The cash will surely be enough to buy the structural changes that PRL and LNR have been so desperate to achieve.