17 January 2014

Canal+ deal dramatically distorts the rugby market

While the Heineken Cup is reaching the final round of the pool stages most people have averted their interest from the chaos surrounding the future of the competition. At this point it seems as if everybody has reached the point of fatigue on the subject. The weekly developments have become akin to a bad soap opera, the complete opposite to what is happening on the field of play.

At the same time, and almost below the radar, the Ligue Nationale de Rugby (LNR) who represent the Top 14 clubs, have signed a new television deal with Canal+. The five year deal, worth €355 million, more than doubles the previous agreement.

The Top 14 clubs have already been dominating the rugby market worldwide, with some of the top French clubs working with budgets around €30 million per annum. The budgets are many multiples of the club budgets in England, Ireland, Wales and Italy. The southern hemisphere market is also unable to compete with the French budgets. It is only the Japanese rugby market that can rival the French clubs in any meaningful way.

The inflationary bubble that the French market creates in the game sucks the best players from Europe and around the globe into the French game. The increased buying power the Top 14 clubs now have under the new Canal+ deal will just exacerbate that situation.

This buying power of the Top 14 clubs may be good for French club rugby but it will prove to be destructive to the professional game in most other parts of the world.

Ironically, countries without a professional domestic game already benefit from the French buying power. Argentina, arguably built its greatest Puma team in their history by having their top players play professionally overseas.

The Argentinian Squad that won the bronze medal at RWC 2007 were predominantly playing their rugby in France. Other countries like the Pacific Island Nations, Georgia, USA or Canada also benefit by players moving to France to earn their living as professional rugby players.

But European countries and the Tri-Nations that support a domestic professional game have also seen their players migrate to France. Recently the Welsh game has begun to lose players at an alarming rate. In Europe that migration automatically weakens the Rabo Direct Pro 12 and Aviva Premiership tournaments. These tournaments without their top domestic players become a weaker product in the rugby market.

For the Tri-Nations countries, along with players leaving their domestic game, it causes players to retire prematurely from the international game. Both New Zealand and Australia refuse to select players who ply their trade overseas. South Africa used to follow that policy but have abandoned it in recent years.

One could argue that not selecting overseas players is a self-imposed hardship by New Zealand and Australia. But the length of the European season complicates player availability for the Rugby Championship, which overlaps the early part of the season in Europe. The Top 14 season is even more problematic for the Tri-Nations teams as it begins in August and that is right in the middle of the Rugby Championship.

The French Federation has made moves to attempt to limit the number of overseas players each Top 14 team can employ. The logic being, the more overseas players that play in the Top 14 the fewer French players get to play at the top of the game in France. That directly impacts the quality of players available to the national team.

At this point in some Top 14 clubs, overseas players make up to 50% of their squad. But the plan to reduce the number of overseas players in the Top 14 over the next five years has already been scaled back. It is unlikely the overseas influence in the French game will significantly diminish any time soon, especially with the increased revenues flowing into the game from the Canal+ deal.

The inflationary bubble that is the French rugby market is set to get even bigger. The increased money in the market will drive player salaries even higher than they currently are. Although at the same time there is no guarantee that the quality of the rugby product on display will improve accordingly.

This Canal+ deal may be good for the Top 14 tournament but it is certainly not good for the professional rugby market outside France.