Is rugby having an existential crisis?

With national unions and professional clubs collectively losing hundreds of millions, a reliance on the occasional profits of the Rugby World Cup is threatening the sport’s long-term sustainability.

Despite the global spectacle and significant revenues generated by the Rugby World Cup, the sport of rugby union is operating at a substantial loss.

A new report by Oliver & Ohlbaum Associates (O&O) reveals that a persistent financial deficit across national unions and professional clubs threatens the long-term sustainability of the game. In the 2023/24 financial year, the top 10 national unions alone posted a combined operating loss of approximately $137 million, while the Premiership Rugby and Top 14 clubs collectively lost around $100 million.

This sets up a critical paradox – a popular, professional sport with an audience in the hundreds of millions is a financially precarious enterprise, kept afloat by the occasional profits of its marquee international event and the deep pockets of a few dedicated owners.

A broken business model

The O&O report meticulously details a fundamental disconnect at the heart of the rugby ecosystem. The men’s Rugby World Cup stands as the sole engine of profit, generating significant revenues that World Rugby must then distribute to prop up the wider game. This “World Cup bubble” model is inherently unstable.

Beneath this peak, the club game – the very foundation for player development and the engine of weekly fan engagement – is revealed to be profoundly broken. While international rugby commands impressive per-match revenues of around $12 million, the most prominent club tournaments generate only $1 million to $2 million per match. This disparity highlights a significant gap between the sport’s high-profile, quadrennial events and the low-margin, year-round product.

The financial strain on clubs has a direct impact on the players themselves. The report shows that while players in other sports, such as football and cricket, are seeing their earnings rise, elite rugby players face stagnant wages and an ever-increasing workload due to a crowded calendar.

The highest-paid players in Premiership Rugby and Top 14 earn a meager $1 million annually, a stark contrast to the $26 million commanded by their counterparts in the English Premier League.

The report also highlights the struggling media rights landscape. Outside of the Rugby World Cup, growth in the value of media rights has slowed significantly in recent years. While some domestic deals, like the URC‘s, have seen increases (due in part to the inclusion of South African clubs), others like the EPCR are seeing a decline in value.

Furthermore, the global media appeal of these national and regional tournaments is very limited, typically representing no more than 5% of their total media income.