The future of European rugby

Tony Copsey, director at Copsey Consultancy, shares his insight into the current dispute in European rugby.

Every five years or so there is a massive punch-up in European rugby to sort out territory, but these battles tend to produce beneficial results and periods of peace. The current confrontation has put clubs in opposition to the unions, which are clinging to their interests in the Heineken Cup. There has been discontent in England and France going back to June 2012 over how the European rugby competitions should be organised.

The disquiet from the English and French centres around the issues of qualification, structure, revenue splits, governance and the commercial ambition of the tournament. European Rugby Cup (ERC) is the governing body and organiser of the Heineken Cup and Amlin Challenge Cup tournaments. The ERC board is dominated by representatives from Six Nations’ national governing bodies, who outnumber the independent representatives from the French Top 14 clubs, Premiership Rugby and Regional Rugby Wales.

The current system is that only the top six clubs in England and France get a place in the Heineken Cup, whereas at least ten Pro12 outfits – including both Scottish teams, both Italian teams and a minimum of three sides each from Wales and Ireland – have automatic entry into the competition.

Of the £44 m generated by the 2012–2013 Heineken Cup, 52% went to Pro12 clubs, while 48% was shared by England and France, who want a three-way split of revenue between the Aviva Premiership, Ligue Nationale de Rugby and Pro12.

There are various interested parties including clubs/regions, leagues, respective unions, ERC, the International Rugby Board and TV companies (BT and BSkyB). BT paid £152 m for rights to broadcast English club rugby including their participation in a European tournament. ERC meanwhile have signed a four-year extension to its TV deal with Sky Sports.

The English and French clubs insist that the proposed Rugby Champions Cup should be run by the clubs, not the unions, which would go against the grain of the current European Rugby Cup structure. England and France are proposing a 20-club tournament run by the clubs rather than the unions. In addition, they would set up a second-tier competition of 20 teams, to replace the existing Amlin Challenge Cup, as well as a “development” competition, which could include sides from Spain, Portugal and Russia.

This row highlights the disconnect in governance in rugby – clubs should control their own destiny.

Because it is merit-based, the European Champions Cup, I believe, could deliver a higher calibre of rugby, and, assuming it ultimately includes all of the best clubs from the Six Nations, it would be a huge commercial force.

It would seem that in this negotiation between the authorities in European rugby agreement has been found around structure, qualification and revenue split but not governance. And there lies the problem. The unions oppose the move, and in Ireland and Scotland the clubs are directly controlled by the union. The clubs in France have indicated that they will play in the Heineken Cup, now that issues around qualification and revenue splits have been resolved.

The English Premiership has reaffirmed their stance that they are out and will not consider playing in a European rugby competition until issues such as governance are resolved. The Welsh regions have backed the idea of the revamped European competition proposed by the English and also support the view on governance. But what will they now do?

The Welsh regions could replace any lost revenue from the current European competition if they enter the English Champions Cup, but any talk of an Anglo–Welsh league would be extremely difficult, given the agreements around the Pro12 and the threat of being disciplined by the WRU if they rebelled.

This row highlights the disconnect regarding governance in rugby. I believe that clubs should control their own destiny without interference from the unions, which have an important but separate role around national teams and development.

It may take a while to happen, but I do expect that this spat will eventually be settled and that a new elite European competition with a revised format will emerge. In doing so, it will be a stronger proposition for sponsors and a more valuable television property.

The English have taken a hard line but I expect others to follow, starting with the Welsh. This sort of confrontation may not be an ideal way of doing business, but it certainly gets things done.