Ollie Phillips: Scrapping relegation could help Premiership balance the books after CVC Capital Partners' investment

 
Ollie Phillips
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Bristol v Doncaster - Greene King IPA Championship
Bristol were promoted from the Championship to the Premiership last season (Source: Getty)

Debate about the possible scrapping of relegation from the Premiership is not new, but following the recent investment into the division it has been given new impetus.


Private equity firm CVC Capital Partners’ deal last month to inject £200m for around 27 per cent of Premiership Rugby is significant because it changes the league’s objectives.

CVC is investing because it is pursuing a financial return. It wants a commercially attractive organisation which can foster valuable assets.

That’s why the idea of getting rid of promotion to and relegation from the Premiership is so appealing to CVC – it would allow it to ring-fence its assets and make them more sustainable.

In the most recent accounts, from the 2016-17 season, Exeter Chiefs were the only club to make a profit. CVC must change that.


Rags to riches

I get the feeling that the move is inevitable eventually. There’s no smoke without fire and I’d be surprised if the possibility wasn’t discussed as part of negotiations with CVC.

Rugby Football Union chief Nigel Melville has pointed to the Premiership’s £30m per year Professional Game Agreement with the RFU, but CVC has the weight to sway the argument.

It’s understandable that the majority of shareholding clubs – the current 12 in the top flight and Championship leaders London Irish – would be keen but there are also plenty of reasons from a business perspective.

Rags to riches stories, like that of Exeter, are extremely rare and the danger of relegation makes it even harder for clubs to come up and stabilise.

Short-termism is encouraged because clubs have to splash the cash to make sure they avoid the drop.

Just look at Bristol, who have come up and signed marquee players like Charles Piutau and John Afoa to compete. Had they not had the threat of relegation looming they could have adopted a more long-term strategy.

Prosperous game

It could be argued that the lack of a trap door would encourage a more prosperous game to flourish: youngsters could be given opportunities more readily, making a World Cup win more likely and a more attractive style could be played because teams would be less scared by the consequences of defeat.

Of course, that could work the other way, with play becoming too open and dead rubbers meaning a lack of desire to compete.

Jeopardy is a key part of sport and any new plan would need to ensure the Premiership was still worth fighting for.

There is also the issue that many Championship clubs simply don’t want to be promoted because of the chasm between the divisions. London Irish are one of few who could bridge the gap.

Sustainable success

My preference would be not to abolish relegation entirely but to have it less frequently – perhaps every three to four years, with two up and two down – to keep the threat, but also allow clubs more time to settle and compete, both on the pitch and financially.

I believe this system would prevent unsustainable success, like that of London Welsh, and encourage a cyclical nature, like the four-year periods between World Cups.

Clubs could plan ahead, build a player programme and think more long-term. If the aim is to create stable, profitable clubs then it’s an idea worth considering.

Whatever does happen, with CVC onboard the Premiership is bracing itself for a fundamental change.

Ollie Phillips is a former England Sevens captain and now a director within the real estate and construction team at PwC. Follow Ollie on Twitter and on LinkedIn

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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