News   |    March 31st, 2022

TOUGH FOR TIGERS

Behind every great sports team is a well thought through and detailed business strategy. Curated for the purpose of ensuring our beloved teams can keep playing, through financial, operational, marketing and commercial means, a sound business structure is the foundation to a successful club.

Around a century ago athletes would play for the love of the game in an amateur capacity, whether it be football, rugby or cricket. Money and commercialism was not at the forefront of the thinking of athletes. As times evolve, opportunities are created, and in the modern-day clubs are fuelled by continuous funding, sponsorship and endless other business activities. In order to control this level of competition between teams both on and off the field we now have what’s known as financial fair play. Essentially, this includes strategies such as capping players wages in order to prevent the larger and more financially prevalent teams taking the best players from smaller teams and paying them more as an incentive. 

Unfortunately, sometimes teams may find ways around this in order to maintain incentives for their players. The latest to fall foul of the financial regulatory boards are Rugby Union side Leicester Tigers. They have been fined £310, 000 for breaching the salary cap. Premiership Rugby has been monitoring their payments from the last four seasons, discovering that in each of these campaigns Leicester Tigers, alongside club commercial partners, made arrangements with a third-party company to deposit payments into the accounts of players’ image rights companies in order to circumvent the salary cap. Those payments have been added to the original salary agreed with players, thus tipping them over the salary cap.

The biggest breach came in 2016-17, when the Tigers were found to have made additional payments totalling £147,750 to players over the £6m salary cap that was in place that season. The club has also been fined an additional £17,900 for its failure to disclose information about these payments to Premiership Rugby, which includes the 2020-21 season, when the salary cap was not breached but some payments were undeclared.

Further to the fine, Tigers have received a 35 points deduction. Andrew Rogers, its salary cap director, said: “Leicester Tigers have cooperated with my investigation and accepted the findings, which allows us to apply the sanctions detailed in the regulations. While we are satisfied that the arrangements which resulted in the overspend have been brought to an end, we will continue to assess all spending as part of our ongoing monitoring process at every club.”

Ultimately this is a positive step forward in rugby and all sports, as it provides an example of how to improve the methods of regulating clubs for the benefit of financial fair play, and more so fair play on the field. 

As a sports fan, you want every team to compete equally and be provided the same opportunities and that must be the driving force behind regulation in this area.

Image – Leicester Mercury

Alfie Bobbins - Integral Sports Management.

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