RFU to make a quarter of staff redundant with predicted £107m revenue shortfall

The Rugby Football Union plans to make 139 people, a quarter of its staff, redundant in the face of a predicted £107million shortfall in revenue.

The savage scale of the cuts reflects how even the sport’s richest union has been brought to its knees by the coronavirus crisis, with chief executive Bill Sweeney predicting revenue dropping by a fifth in the long term. A consultation process for the redundancies among the RFU’s 580 members of staff has begun and the results will be announced by the end of August. No area, including England elite men’s group headed by Eddie Jones or the women’s game, will be ringfenced from the cutbacks.

The RFU had already furloughed 60 per cent of its staff and implemented wide-ranging pay cuts, which have extended to Sweeney and Jones. However Sweeney made clear that these measures alone will not safeguard the RFU’s long-term future and wholesale restructuring was required.

“Unfortunately, this is not enough to run a sustainable operation and safeguard our future,” Sweeney said. “We need to maintain our organisation for the long term, this is not a short-term cost reduction exercise, the RFU will still stand, but the impact of Covid-19 will continue to affect us for many years to come. As you will be aware, the long-term financial challenges are significant for the whole economy. We, like many rugby clubs, rely on revenue from matches and events at Twickenham Stadium and we re-invest this revenue back into the game.

“Our detailed scenario modelling shows there may be a short-term impact of £107 million in lost revenues and we also know there will be a much longer-term effect. We are projecting a 4-5 year recovery with cumulative revenue reductions of around 20 per cent. We are having to make difficult decisions on what we can continue to invest in as well as what is the right size and shape of our business for the future. To ensure we have a sustainable RFU we have announced to colleagues that it is proposed that the total number of roles across the organisation will reduce by 139.”

In the consultation process, Sweeney has promised to prioritise three key areas: the community game, the performance arena (including the elite men’s and women’s teams) and introducing rugby union at junior level with a particularly emphasis on increasing diversity.

In the last round of cuts in 2018, the RFU made 64 positions redundant after posting an operating loss of £24.4million. Although the English union returned to profitability in 2019 but was already on course to make a loss this year even before the coronavirus pandemic struck.

That is likely to lead to further cuts. As Telegraph Sport reported last month, Premiership clubs are bracing themselves for a steep decline in the central funding it receives from the RFU through the Professional Game Agreement. The first four years of the deal, agreed in 2016, guaranteed an annual payment of £29million, but the remaining four years are now tied to the RFU’s revenues.

The agreement over match fees for England players, which currently amount to £25,000 a game, has also come to an end. Negotiation are ongoing but another sharp decline is expected.