ENGLAND’S TOP PROFESSIONAL rugby union clubs saw their combined debt grow last season while none of the 10 sides made a profit for a third year running, an independent study revealed Wednesday.

The report by business-restructuring specialists Leonard Curtis comes amid talk the clubs — including Bath, Leicester and Saracens — from the English Premiership, renamed as Prem this season, could soon switch to a franchise model to strengthen their finances.

“The current model is proven. It is a loss-making one,” said Alex Cadwallader, a Leonard Curtis director and former England rugby junior international.

“The clubs collectively have been loss-making every year in the last 10 years once the exceptional items such as ground sales… are removed. The amount of debt continues to grow,” he added.

The report noted that “despite some encouraging signs of growth in matchday and commercial income”, total debt stood at £342.5 million (€388m) across the 10 teams in season 2023/24.

The ten clubs made a combined loss of £34m (€38.5m), also an increase on the previous season.

Then Premiership clubs Wasps, London Irish and Worcester all went bankrupt in the 2022/23 season.

“The franchise debate is ultimately a financial sustainability debate,” said the report’s co-author Rob Wilson.

“If the sport wants to attract serious capital… it must demonstrate a credible long-run route to stable cashflow and return on investment,” Wilson added.

Leonard Curtis said through a franchise licensing system, clubs could save between £1.1 million and £1.9 million annually on a typical turnover of £20 million, which six of the ten Prem clubs achieved last season.

However it warned club finances would stabilise only in combination with other factors, including independent financial regulation and disciplined cost controls focused on player salaries.

In April, the chief executive of England’s governing Rugby Football Union (RFU), Bill Sweeney, said a franchise-style Prem, with clubs awarded licenses to play on the basis of finances, fanbase and facilities as well as results on the pitch, was a possibility.

A franchise system may see an end to promotion and relegation.

“There’s always a risk in a European team sport of saying we’re going to get rid of promotion and relegation, because that’s our model,” Dan Plumley, an expert on sports finance, told AFP at the launch of Wednesday’s report in London.

“But financially, if you look at rugby union at the minute, if they were to go down that road, you might need to close it off for a few years to stabilise the whole sport and the women’s game.”

This was because some second-tier sides are not ready financially to make the jump to the Prem, Plumley noted.

France’s Top 14, with several clubs bankrolled by wealthy owners, has a higher salary cap than the Prem and has outpaced its English counterpart commercially to become Europe’s leading domestic rugby tournament.

Broadcaster Canal+ is paying nearly three times as much for the French league’s rights compared to the amount earned by Prem Rugby.

The RFU has tried to stop leading players leaving the domestic game by saying only those at domestic clubs will be considered for England selection.

But several players have still opted to either end or put their England careers on hold by signing for French teams, with Saracens and England No 8 Tom Willis set to leave the London club at the end of the season to join Bordeaux-Begles.

“The competition in France is moving forward and disruptors with new models are circling,” said Cadwallader in a reference to the proposed world club franchise, or breakaway, R360 competition.