How Global Financial Crisis is Affecting Rugby Football in Europe

success, more and more teams are becoming wary when it comes to signing new players. This is due to the high transfer fees demanded for players.

Continental Glory
As a result of this, club coaches are making do with what they have, even at the expense of continental glory. Rugby clubs in Europe seem to be more concerned with maintaining their top flight status in their domestic rugby leagues and less concerned with concurring the continent. And can you blame them? To win a continental trophy like the Heineken Cup requires a team to have depth in the squad. To attain this depth, a team needs to have a few big name signings on their team sheet.

Euro 700 000 Spending
To have such players a club has to splash out about Euro 700 000. But with the cash crunch starting to bite hard on the sport in Europe, few clubs if any are willing to spend such an amount on one player.

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The situation is the same across the board. Big clubs are also crying out for cash injection; with many barely been able to remain liquid. Many have reported negative results in their end year results.

Financial Plea
In the UK, Wasps reported a 2.8 million loss; while Bath and Newcastle were lucky that their benefactors were willing to dip into their pockets to assist them. Others like Bristol are finding it difficult to even meet their players wage demands and have resulted to making public plea for funding.

Salary Caps
If will be interesting to see what will happen at the start of the next season if the current situation prevails. According to the games Chief Executive in the UK – Mark McCafferty, there are two ways of dealing with the crisis. One is to drop from the top flight rugby. This will leave a total of 10 teams which will share the revenues generated. The revenues are set to grow in 2010 when the new broadcasting deal commences. Should this happen, then there will be no need of reducing the salary cap.