The survival of Newcastle Falcons as a professional rugby team will require more than just a one-off £4m bailout from the remaining nine Premiership clubs, according to a senior Falcons employee. Steve Diamond, their director of rugby, has confirmed Newcastle may have to negotiate a potential short-term loan to participate in next season’s Premiership, raising fresh doubts about the club’s longer-term viability.
Diamond has already been forced to put a freeze on player recruitment for next season following confirmation the Falcons have been discussing a possible central loan if they fail to secure fresh investment between now and mid-June. Their longtime backer Semore Kurdi has been actively seeking a buyer for the club since last year.
Despite some tentative interest there has so far been no deal, prompting speculation the English club game could lose another top-flight side after the financial demise of Wasps, Worcester and London Irish. Diamond insists there is “no panic” at Kingston Park but acknowledges the situation is “not ideal”.
“It’s public record that we are looking for new investment and I’m pretty sure that this is a fall-back position to maintain our status in the league if investment doesn’t come,” said Diamond. “Our owner has had a check and has asked whether the model works and whether he wants to continue. Every club is in that position, let’s be honest, unless they have a benefactor. Just look at the losses of the league.”
Newcastle, however, will need to have appropriate funding in place in order to meet the tests applied by the league’s recently created financial monitoring panel. Decisions on the suitability of a competing side are due to be finalised after the conclusion of the current campaign.
The bottom-placed Falcons did receive one snippet of positive news on Tuesday following confirmation that Ealing Trailfinders, along with Coventry, have failed to satisfy the minimum stadium criteria for promotion. Trailfinders top the Championship with 10 rounds to go, while Coventry are third. It means the Premiership’s basement dwellers can, for now, live to fight another day without prospect of a playoff but Diamond acknowledges Newcastle’s current operating model is not sustainable indefinitely.
“I informed the squad yesterday that we will not be recruiting new players immediately until there is some clarification of investment or a loan coming in or any other option that might be out there. [But] there comes a point, and we’re in that position now, where you ask whether you can keep a minimum standard if you keep cutting and cutting and cutting.
“There’s no point solving the problem for a year, as this time in 12 months we’ll be in the same boat. In a case of desperation the Premiership clubs, with Premiership Rugby assisting, would probably keep us going for a year. [But] it needs to be a 10-15 year plan. You want an investor that’s not just going to put a couple of million quid in to get us through next year. I think we need to look bigger than that. There has been some interest but, as of yet, nothing concrete.
The situation underlines the precarious finances of English club rugby, as spelled out in an independent financial industry report in September. The loss of Newcastle would leave a gaping hole in the rugby union map from the Rugby Football Union’s perspective, with Sale Sharks the only other Premiership club north of Leicester. “Geographically it’s enormous,” said Diamond. “It’s not just the north-east, it’s from Cumbria across the top of England. There needs to be an investment plan where we’re looking at the whole regeneration area.”
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Diamond accepts it would be “difficult” for the RFU to get directly involved but also believes a nine-team Premiership would be a virtual non-starter for a variety of reasons. “Nine doesn’t work, I don’t think, or is difficult to work. It’ll probably never be nine because somebody out of the Championship would be forced to come up. And you are then in the same dilemma, aren’t you?
“I think the Championship’s a good stepping stone competition. But if you come up to the Premiership and you are spending £1m on your team, you are going to get beaten 100-0 every week. If you spend £4m you’re going to end up with my team, which gets beat every week. So you are now losing £4-5m quid every year. If you want to go to where, say, Sale are, you are going to have to spend £8m quid. So you are now going to lose £8-9m quid in year one.
“Then you have to do your stadium, your coaching staff, you need five physios for a 50-man squad, you need doctors, you need strength and conditioners, you need an academy, it goes on and on. And you don’t want to come up for one year so you come up for three years. You are now £30m. That’s the reality of it.
“People in my experience, like Simon Orange and Ged Mason at Sale, Semore Kurdi here, the other owners in the Premiership, never get the credit they deserve. They’ve already had that pain over the last 25 years. When I hear all the tittle-tattle from the Championship clubs saying it’s unfair, we’ve not had the same funding – you’ve not had the same pain, lads. You’ve not had the same pain.”
