Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


Memorandum submitted by Moseley Football Club


  1.1  This is a response to Press Notice No. 16 of Session 1998-99 dated 11 May 1999.

  1.2  Moseley FC is a member of the Rugby Football Union ("RFU") and currently competes in the Allied Dunbar Premiership—Division 2. Accordingly it is a member of English Second Division Rugby ("ESDR").

  1.3  Moseley formed in 1873 is the premier Rugby Union club in Birmingham. It currently organises recreational sport (amateur rugby) for children from seven years old up to 16 years old, for children in the Birmingham area. The 1st XV Squad, however are semi-professional, rewarded through:

    —  bursaries;

    —  appearance money; and

    —  win bonuses.


    —  Financial affairs;

    —  Relationship between Rugby Union and Rugby League;

    —  Modernisation of Grounds and Facilities;

    —  Promotion of rugby; and

    —  Other issues of interest.


  Moseley has experienced a very difficult period in its financial affairs as it has tried to come to terms with the changes in Rugby Union football since the sport went professional in August 1995. These financial difficulties were mainly as a result of the club attempting to maintain its status as one of the premier rugby clubs in England by gaining promotion to Premier League 1. These efforts resulted in the club being placed in administration in January 1998. As a consequence of this action it had to forfeit ownership of its ground and is currently in negotiation with Birmingham University and the City Council for a new playing site.

  The club was purchased from the administrator in May 1998. Losses continued through the 1998-99 season and the club remained in business through the generosity of its Directors. It is now planning to continue its activities through the 1999-2000 season in a breakeven position based on its financial experiences in 1998-99 with a degree of confidence. One of the consequences of its financial position is that it no longer plans to employ any full time professionals.

  3.1  It is generally accepted that professional Rugby Union at club level is not sustainable at present levels without the support of one or more of the following:

    —  The allocation of nationally negotiated sponsorship monies;

    —  Deep pocketed investors who seek to secure a franchise for the future professional game;

    —  Individual emotional investors; and

    —  Other sponsors.

  3.2  Moseley has since the advent of professional rugby in 1995 made a cumulative operating loss of in excess of £1.5 million.

  3.3  The principal reason for the unsatisfactory present state of affairs arises from a number of factors, including:

    (a)  The desire of individual clubs to survive at elite level until there is a more realistic structure for club rugby.

    (b)  Player aspirations to maximise earnings given their short playing life.

    (c)  Administrative and financial chaos within and between the governing bodies in the United Kingdom.

    (d)  With few exceptions, unattractive outmoded grounds and stadia.

  3.4  A culture is developing in Rugby Union where the only Clubs that can survive as professional clubs are those financed by multi-millionaires many of whom were persuaded that they could obtain a return on their investment. Their failure to achieve any return to date and their increasing awareness that a return on their investment is unlikely has been a major cause of the conflicts between the owners and the governing body in recent years. There is now a realisation that to have any chance of success there will have to be a major financial restructuring.

  It is doubtful if the recent decision of English clubs to participate in European Competitions will solve the underlying financial problems.

  3.5  The initial investors in rugby clubs were individuals whose previous experience had been in soccer clubs. They completely overestimated the income potential of Rugby Union and the size of its spectator base. The consequence was that player contracts were set at a totally unrealistic level. Serious arguments arose over club and RFU contracts which in effect meant that international players were to all intents and purposes being paid twice. It is now evident that salary levels of all players will have to be reduced and that the vast majority of clubs will only be able to employ part time players.

  3.6  Rugby only attracts substantial numbers of spectators for international matches. Therefore the RFU is able to negotiate major sponsorship contracts from TV sponsorship for its international matches. In 1996 the RFU entered into a contract with SKY TV for the sponsorship of its home internationals. The other three home unions took exception to this action preferring to enter into a TV contract with the BBC. Although this contract was considerably less attractive than the SKY deal. The arguments that followed culminated in the RFU being threatened with expulsion from the Five Nations Championship. This was only resolved when the RFU agreed to compensate the other three unions. Compensation was to be agreed through arbitration which is still proceeding.

  3.7  One of the major impediments of rugby clubs achieving financial stability is the poor quality of their grounds and facilities. The largest club rugby ground in England is Leicester with a capacity of 17,000, followed by Harlequins with 10,000. The remaining grounds in Premier 1 and 2 do not have seating capacity in excess of 2,000. Unfortunately Rugby Football does not have the benefit of an organisation such as the Football League Trust which has financed a major proportion of the costs of rebuilding of Football League grounds. Rugby union football is currently coming to terms with its status as a professional sport and does not seem prepared to finance major capital development schemes at the expense of financing its playing activities.


  No problems currently exist between Rugby Union and Rugby League. Free movement is allowed between both codes subject only to the restriction in place through registration of players and contractual commitments.


  5.1  Currently no rugby grounds come under a licensing authority as defined by the Taylor Report following Hillsborough. The majority of rugby grounds do not warrant such treatment. The poor standard of rugby grounds in general is a major obstacle to establishing rugby as a professional sport. There is currently insufficient financial resources in clubs to invest the level of capital investment necessary to improve the current situation. Few clubs are prepared to put their playing performance at risk in order to improve their facilities. While this is a misguided attitude it is not difficult to appreciate the reasons for this view.

  5.2  Currently the deficiency in ground facilities is being overcome by some clubs by making arrangements to play on football league grounds. This policy while expedient is self defeating. If rugby clubs manage to successfully market themselves and attract a bigger following it will inevitably lead to conflict between the parties over priority of use.

  5.3  What is required if Rugby Union football is to succeed as a professional sport is financial assistance to develop a national network of small (say 8,000 capacity) modern facilities for multi-sporting occasions including rugby.


  6.1  It is of considerable concern the recent announcements that the Government will no longer support team sports after the age of 16 years old, preferring to encourage the more individually based sports. This policy combined with the selling off of school sports fields will have serious long term effects. It is our opinion that competitive team sports is a fundamental element of any education system and should be designated a core subject in the annual school curriculum.

  6.2  Far greater use should be made by schools and community organisations of club facilities including coaching. Club coaches should be encouraged to visit local schools and community projects in their area to supplement existing facilities.

  6.3  Very many clubs already organise rugby for 7 to 18 year olds, usually on Sunday mornings to encourage people to play rugby. There is tremendous demand for these initiatives especially where schools are failing to satisfy the demand.

  6.4  The current RFU policy of employing Youth Development Officers jointly with Constituent Bodies should be reviewed and consideration given to fund these developments through the establishment of professionally staffed academies located at the premier clubs.

  6.5  There needs to be far greater involvement of clubs at every level in rugby. However this would only be possible if adequate financial support was made available.

  6.6  A policy needs to be established which sets out concise and clear relationships between the various levels in Rugby Union football which ensures that there is an equitable division of both finance and playing resource at all levels of the game.


  7.1  To deal with the financial constraints and establish a viable professional club game proposals have been made for a franchised system of elite clubs, similar to that established in American Football. The traditions that exist in Rugby Union would suggest that this would be "a bridge too far" and allow Rugby Union to become a hostage to fortune of rich business men.

  I hope that these comments will make a worthwhile contribution to your deliberations, representatives of the club would be available to attend your Committee sessions if that was considered appropriate.

June 1999

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