Most of the world’s professional rugby clubs are not financially independent. They rely on wealthy presidents to tip in cash, or are propped up by their national governing body.
In the case of the All-Ireland League clubs, many rely on the sale of international match tickets for income. Many clubs would be insolvent without this revenue. None of these business models are sustainable.
Whether it’s Super Rugby, Top 14, the English Premiership or Pro14, attendances at the vast majority of club games are below 20,000 spectators. Many are below 10,000. While rugby has attracted new supporters, it is clear that the majority of people who are coming to professional club games are drawn from the rugby community.
In the late 1990s clubs at all levels, from AIL up, commenced player payments. They started paying out more than they earned. That is not a sustainable business model.
In an all too common story, ego-driven administrators overspent on player contracts and stripped clubs of their assets. Assets that were accumulated through a century of selfless work by amateur volunteers.
To support the provincial teams, a semi-professional Division 1A and 1B is required
In Ireland, the AIL clubs are struggling yet coaches are well-paid. While the payment of players is officially banned, it still goes on. Under the table payments or pay from a “third party” happens. I had this reconfirmed to me this week from sources within the AIL.
Some sunlight needs to shine in the dark places of the AIL and a new strategy is required. To support the provincial teams, a semi-professional Division 1A and 1B is required. Players could be paid a sustainable amount of money if they win. This model is working in the Shute Shield in Sydney.
To be in this semi-professional league, clubs must prove they are financially sustainable.
In France, all clubs in the Top 14 and Pro D2 are audited. This is a process the IRFU could undertake to support the AIL.
If the books don’t stack up, clubs are relegated to a division they can afford. It’s amazing how quickly the clubs become accountable.
The processes regarding the revenue created by and the distribution of international tickets within the AIL needs to be reviewed. I know the IRFU is an organisation of high integrity. It needs to urgently review these processes as there are strong rumours regarding the illicit sales of international tickets.
AIL Divisions 2A, B and C need to return to amateur status. If the independent auditing of a Division 2 club confirms that they are financially capable and ambitious they can then compete for promotion.
This process works extremely well in France.
The exception is when clubs then contract foreign talent, for short term success and stop resourcing their local talent. This creates a downward spiral.
The cost of bringing in overseas talent forces the club to stop resourcing its academy. Then the club has to keep buying overseas talent because its academy has stopped producing players.
World Rugby must assist the fight against this short-term thinking, by enforcing that foreign players live for eight years in another country before they can represent that country at the international level.
Leinster have created one of, if not the best, talent production systems in the world
Currently, at the end of a three-year contract a player can change his rugby nationality. This is a farcical situation. Eight years is a strong commitment but three years is a holiday.
It is obvious watching this year's Six Nations that South Africans, New Zealanders, Australians and South Pacific Islanders have been parachuted into national teams, making a mockery of national representation.
But all is not lost.
Examples of clubs that are sustainable and successful will be on display at the Aviva on Sunday. Toulouse and Leinster are at the top of their respective domestic competitions, both draw large home support and both have invested deeply in their academy systems to produce players for their professional teams.
Toulouse are now in the third year of a five-year plan. Their aim is to return to playing their unique “Toulousain” game, based on footwork, post contact skills and support.
To enable this, the club is reducing the number of contracted foreign players and increasing the number of skilled players produced by their academy.
Leinster commenced their long-term development of local players 20 years ago. In that time they have created one of, if not the best, talent production systems in the world.
Both clubs have sustainable business models that should be emulated by others.
A weak link in Irish sustainability is the lack of resource supplied from the four major provinces down to their AIL clubs. Resources do not always take the form of money.
The New Zealand and Canterbury centre Ryan Crotty, told me that he and his fellow national players regularly return to their local clubs to cook BBQs, help coach the under 15s or whatever was needed.
In Australia, the Wallabies have the opportunity to play a few games for their clubs each season.
The local community turn out in their thousands to see their local boys. Clubs make money, children are inspired and the players love coming home.
Just one AIL round with the top Irish rugby professional available for their AIL club would energise the local rugby communities.
The provincial teams must support their AIL communities because it is these communities that attend the professional clubs’ matches. The AIL clubs are the bums on seats for the provincial teams.
To help themselves, the AIL clubs must rethink their raison d’etre – their reason for being.
Short-term thinking got clubs into this mess. Long-term strategies are required to solve it.