Tuesday 21 November 2017

Despite our World Cup joy, French rugby outjumps Irish in financial line-out

The economics of rugby will favour the French when the World Cup ends

'Johnny Sexton, who is ranked in the top five of the world's best-paid rugby players, signed with Leinster for an estimated €650,000 a year, but only after protracted negotiations'
'Johnny Sexton, who is ranked in the top five of the world's best-paid rugby players, signed with Leinster for an estimated €650,000 a year, but only after protracted negotiations'

Simon Rowe

We may have pulverised Pape and Co in the Millennium Stadium last weekend, but Irish rugby squad members know their French rivals are in a different league when it comes to one aspect of the game - the money stakes.

Seven of the nine highest-paid rugby players in the world now play in the French league. With pay packets dwarfing what Irish clubs, such as Leinster and Munster, can offer, cash-rich French clubs are mauling their rivals both off and on the pitch by luring the world's elite players to France's Top 14, the world's richest rugby union league.

Backed by multi-millionaire owners, such as Toulon tycoon Mourad Boudjellal and Paris-based Racing Metro 92's Jacky Lorenzetti, one of country's richest men, the French league is luxuriating in the wealth of benefactors and a €60m TV rights deal.

With such riches on offer, it's no surprise that Irish rugby legends Johnny Sexton and, assuming he recovers from injury, Paul O'Connell have had their heads turned by French clubs.

Uncertainty over the future of some of Ireland's frontline players has been a concern for some time as French clubs outmuscle rivals with their financial might.

Toulon, the French league's biggest spender, has upped its expenditure from €18m a year to a whopping €35m, with players' wages accounting for around €10m of this outlay.

Many of its 41-strong squad - who on average earn a salary of €243,000, not including earnings from sponsorship, endorsements and image rights - are senior internationals, many of whom are currently playing for their national teams at the World Cup.

Pay records are being smashed throughout the sport and Irish rugby is battling to keep up.

History will be made in world rugby next month when New Zealand star Dan Carter - who replaces Johnny Sexton - is unveiled as the first player to break the €1m-a-year barrier when he arrives at Racing 92.

Although all French clubs must operate a €10m salary cap, clever accountants can find ways of getting around it. Carter's €1.3m salary, for example, will be around €500,000 in wages but the All-Black fly-half will receive a similar sum for his image rights including an estimated €300,000 from the operating company of Arena 92, Racing Metro's new home from 2016.

Corporate scrums in the boardroom are not uncommon as rival teams fight to secure the best players.

Johnny Sexton, who is ranked in the top five of the world's best-paid rugby players, signed with Leinster for an estimated €650,000 a year, but only after protracted negotiations.

His signature was finally secured after the intervention of billionaire Denis O'Brien, who stepped in and pledged to top-up the outhalf's IRFU wages. Without such a benefactor, it is likely that Sexton would be back playing in Paris.

The French connection looms large over contract negotiations involving Irish stars.

Sexton's Leinster team-mate Jamie Heaslip spurned Toulon's advances but only after Bank of Ireland came on board with a deal to bring his total pay package to €600,000. Heaslip is now a brand ambassador for the bank. Ireland flanker Sean O'Brien also resisted a big money move.

But Ireland legend Paul O'Connell couldn't resist the lure of the Gallic giants. He has agreed a €600,000-per-season deal in a two-year move to Toulon.

The reason France is proving such a draw for our top players is simple economics: a player at the elite end of the sport who earns €300,000 a year can expect to earn another €200,000 on top of that if he joins a top French club.

An added attraction is that if a player sees out four or five years at a club in France, when he retires, he is entitled to having a percentage of his salary paid for the following two years. The French call this chomage.

In contrast, the IRFU controls the purse strings for the Irish provinces, who must work with more modest salary budgets.

However, like everything in sport nowadays, TV rights deals are what drive rugby's growth and drive the pay gap between Irish and French players.

France's top tier of 14 professional teams share the spoils of a €60m French TV rights deal, whereas English rugby's top flight must share a smaller windfall of €38m per year (€152m over four years) among 12 teams from a Premiership Rugby deal with BT Sport. And the four Irish provinces must share the spoils of a €10m-a-year deal secured by RaboDirect Pro 12 unions.

But one of the biggest pay gaps in sport is between football and rugby. Football is king and rugby has some catching up to do.

The English Premier League's latest deal with Sky and BT, for instance, is worth an eye-watering €2.3bn (£1.71bn), which is shared among 20 teams. And football stars such as Lionel Messi and Cristiano Ronaldo earn about €120m per year between them.

On this comparison, Ireland's highest-paid rugby player, Johnny Sexton, would need to keep playing for 60 years to make what Ronaldo does in just 12 months.

But the good news for Ireland's top players is that a new survey reveals how the salaries of Rugby World Cup stars compare favourably with City financiers.

According to experts at Emolument.com, a salary-benchmarking website, the world's top rugby players still have the edge over most bankers, with hedge fund traders earning just €172,000 and asset-management directors earning €160,000.

In fact, even top tennis players crush their banking counterparts in the salary stakes.

The highest-paid tennis player in 2014, Roger Federer, earned £36m, while the highest-paid banker, Goldman Sachs chief Lloyd Blankfein, earned £14.8m, which would only rank him fifth in a highest-paid tennis players' list, between Maria Sharapova and Li Na.

Alice Leguay, a salary-benchmarking analyst at Emolument.com said that although rugby stars may not be the world's biggest earners, they win the popularity poll hands down.

"Bankers are in the spotlight nearly as much as sports stars and both often incur negative coverage, with doping and tax evasion for some and greed and tax evasion for others," she said.

"But the public has a soft spot for high-earning athletes whose gruelling training and exacting skills have earned them their good fortune, while bankers are seen as undeserving of their high pay."

Sunday Indo Business

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