10 September 2013

Is the Heineken keg nearly empty?

The first signs of real trouble appeared almost a year ago to the day, when Premiership Rugby announced they had signed a deal with BT Sport for €178 million (£152m). A deal between BT Sport and Premiership Rugby is in itself not an extraordinary development. But it includes the transmission rights of cross-border matches from 2014. Cross-border matches are what the Heineken Cup is all about.

This dispute, like any other dispute in sport, is about money. The English in particular and French have never been very happy about how the Heineken monies have been doled out. The English and French supply six teams to the tournament and each receive 24% of the pot. The Celtic nations and Italy receive the remaining 52% of the money, which is doled out between the four Unions.

That’s a pretty good deal seeing as the Pro 12 Nations are only guaranteed ten teams into the tournament (Ireland 3, Wales 3, Scotland 2 and Italy 2). The remaining two spots go to the tournament winners and the Amlin Challenge winners.

So in essence the Anglo/French block gets 48% to share between twelve teams and the Pro 12 block get 52% to share between them. If an English or French team win the Heineken or Amlin it means more teams to share in an already smaller pot.

If you look at the Anglo-French proposals for a revamped European Cup, it would include just twenty teams. England and France continue to supply six teams with the Pro 12 supplying a further six, through qualification as in the Aviva and Top 14, and the remaining two spots taken by the previous year’s winner and runner-up.

The financial remuneration would be a very simple three-way split between the Premiership Rugby, Top 14 and the Pro 12. So that would increase the take for England and France from 24% to over 33%. Quite a sizable increase in revenues.

The Argument the Anglo/French make is they believe they bring more value to the tournament. That sounds pretty arrogant but without them it would just be another Pro 12 Tournament. Hardly something that would set the pulse racing.

Also, without a Heineken the Aviva Premiership would probably increase the league from twelve to fourteen teams. The French already have fourteen teams and have to start their championship in August. They are already five games into their league, which included mid-week games last week, yes three rugby games in eight days.

With no Heineken the free weekends would be welcomed in both England and France. England could expand their Aviva Premiership and release their players to play an extra Autumn International each year. That would be worth a substantial chunk of change to the premiership clubs. The French would not have to start their season in August and would avoid mid-week games.

There is even the talk of a World Club Championship with the winners of each national tournament, including the Super Rugby champions playing off over a couple of weeks.

What also rankles with the English and French is their teams have to qualify by finishing in one of the top six spots in the Aviva Premiership and Top 14, leagues that have relegation. While the Pro 12 teams are guaranteed participation from a league with no relegation. Scotland and Italy get both teams in, while Ireland and Wales get three from four teams with a possibility of more teams based on the outcome of the Heineken and Amlin.

The argument about relegation is relevant. The English and French argue because their leagues have relegation they are extremely competitive throughout. To compete in their domestic leagues and Heineken requires bigger squads, which costs more money.

So it’s a proper mess to say the least.

But is it a real mess or are the English and French just sabre rattling?

Well this could be the real deal. Remember back in 1998/’99 England withdrew from the European Cup as it was back then. The tournament was in its fourth year and Bath had won the tournament the previous year. At that stage the European Cup was tethering on the brink of implosion. Had the French joined the English back then it would have surely been the end of the European Cup.

At that time it was the Irish international and Lion, Tom Kiernan, who convinced the French to say on board. Tom was the visionary and the driving force behind the beginning of the European Cup. Without him the tournament may never have happened or survived.

Thankfully, without the French joining them, the English came back to the table the following year, Northampton won the cup and the rest is history. But it does prove the English will act if push comes to shove. As for the French it is harder to say.

It is also worth remembering that, apart form Toulouse, it took a long time for the remainder of the French clubs to embrace the Heineken Cup. We have all seen French club teams travel away from home with the 2nd XV. Especially when they are no longer going to qualify for the quarter-finals or are having a bad run in the Top 14. Although that has changed for the better in recent years with teams like Biarritz, Clermont, Stade Francais and Toulon really going after the tournament.

Money is not a huge problem for the French. With some teams running on budgets in excess of €30m the Top 14 is the richest rugby club competition in the World. But the financials are different for the English. Budgets are much tighter and the salary cap of £4.5m means limited squads and a talent drain to the Top 14. Also, their international players are not centrally contracted by the Union as they are in the Pro 12 nations. That puts a huge financial burden in the English clubs.

The announcement this week, that there will be a new Anglo/French European competition from next year, is definitely an aggressive move. The fact the announcement was made by Premiership Rugby is even more telling. In terms of calling the shots, at the moment the English are probably driving the bus, but the French are definitely on board.

As part of their statement, Premiership Rugby has quoted the French clubs as asking “Premiership Rugby to take immediate action to put in place a competition for 2014/15 to include the French and English clubs but which will also be open to teams from other countries.”

This is enticing the Celtic nations to blink and break ranks. A divide and conquer tactic if you will.

But despite the English being the most vocal at the moment, ultimately the French will decide how this plays out. If the French are really committed to restructuring the Heineken Cup and entering a new European competition if they don’t get their way, it could spell the end of the Heineken Cup as we know it.

This one is set to run and while the Pro 12 refuses to budge as a block, the BT Sport money Premiership rugby is waving may cause a break for the border!