Following a virtual board meeting on Wednesday of the governing body running the game in England, CEO Bill Sweeney issued a letter outlining how they hope to tackle the crisis that led to the termination of the 2019/20 season last Friday for all levels of the game below the Gallagher Premiership.
“I am writing to advise you of the actions that have been agreed to offer a support package directly funded from the RFU worth £7m to provide support for community clubs in England,” he said.
“The package includes monies ring-fenced and diverted for the community game as well as additional funding. These measures include:
An early release of £800,000 cash due to clubs through the ticketing fund;
Early release of final funding payments (£600,000) to constituent bodies and suspension of the activity plans against which this was allocated, enabling them to utilise this to provide “immediate support grants” to clubs most in need. In addition, £400,000 will be made available to constituent bodies who elect to match fund from their own reserves.
A suspension of the quarterly loan repayments for clubs with outstanding loans due in April (£335,000);
The creation of a £5m support loans programme, offering loans of between circa £2k and circa £10k to clubs, with deferred re-payments for six months and repayable over three years.
“We will be providing more details on this financial package in the coming week. We will also be issuing regular club recovery updates with practical advice on how government grants can be accessed as well as other business management advice.
“We welcome government interventions which will provide business rate holidays and grants for clubs.
“The RFU will continue to provide a free helpline to assist clubs with legal and tax-related matters: https://www.englandrugby.com/participation/running-your-club/legal-and-administration.
“No one can predict every possible outcome of the Covid-19 outbreak particularly with regard to the duration of this crisis and we are managing in the unknown.
“We have modelled three potential scenarios and are working on an assumption based on a medium-term impact with a view to a return to rugby in the autumn.
“We will continue to monitor against this assumption and review and revise planning where necessary.
“The RFU had budgeted for a loss-making year within a four-year cycle due to the costs of the 2019 RWC campaign and hosting only two home Six Nations games. The loss will now be considerably more as we face challenges similar to businesses across the country.
“The RFU’s biggest asset is also a major cost and the closure of Twickenham Stadium has a significant impact on the revenues we can generate to re-invest back into the game. In that sense, we are like every other club in the union when we do not stage matches and events we do not generate revenue.
“Based on our planning assumption we estimate RFU revenue losses over the next 18 months to be approximately £45m/£50m and have a firm plan in place to mitigate this. The RFU executive team will be taking a cut in remuneration in excess of 25 per cent. In addition, combined board fees will be reduced by 75 per cent.”