PARIS (Reuters) - After years of overspending where domestic and European success was bought via cherry-picked foreign superstars, the French Top 14 is stabilising as increased TV revenue has begun to level the playing field for those clubs not backed by a millionaire owner.
French clubs have won eight European Cups with another 13 runners up spots since the competition was created in the 1995-96 season and, able to offer wages unmatched anywhere else, attracted world class players.
Arguably the two biggest names in the game over the last decade were tempted in as New Zealand’s Dan Carter joined Perpignan in 2008 and England’s Jonny Wilkinson signed for Toulon in 2009.
Dozens more foreign internationals followed, with Toulon leading the way. The likes of Bryan Habana, Drew Mitchell, Leigh Halfpenny and Steffon Armitage became known as the club’s galacticos, and repaid the investment as they were European champions three years in a row from 2013.
Yet those salaries and large squads came at a heavy financial cost and by 2014 about a third of the French elite clubs had an operating deficit.
Last year, Paris clubs Stade Francais and Racing 92 planned a merger after Stade president Thomas Savare said he did not have the cash to keep the club afloat, though the project was cancelled after his players went on strike.
“With the exception of two or three clubs no ambitious team... can survive without a private or public benefactor,” Savare, who passed the baton to Swiss entrepreneur Hans-Peter Wild, said after the failed merger.
“French rugby is living beyond its means,” he added. “Everyone has to realise it. We’re on an intravenous drip.”
French clubs have traditionally paid big wages to top talent.
Carter, now at Racing 92, headed a list published by L’Equipe of the top 10 earners of the Top 14, with a reported 850,000 euro (754,294.83 pounds) annual salary, while Wilkinson was on a reported 780,000-euro salary in 2009.
A list published by SA Rugby magazine in early 2017 put seven Top 14 players in the top 10 earners in the world.
Yet the vast majority of professional rugby players still earn a fraction of that enjoyed by their soccer counterparts, with only a tiny handful on contracts that might earn them a million euros or more over a two or three year contract.
Emmanuel Eschalier, the LNR’s (French National Rugby League) chief executive officer, believes that the finances of France’s top clubs are more stable than it might appear.
“We need to take a step back and appreciate the situation,” Eschalier told Reuters. “In 10 years the average budget rose from nine to 24 million (euros) and all kinds of revenues have increased.
“The stadiums have been renovated and new ones have been built.”
He acknowledges that entrepreneurs are key to the league’s business model, but believes those such as Racing 92’s Jacky Lorenzetti and Toulon’s Mourad Boudjellal know what they are doing financially and is confident the system is viable.
“French rugby does not depend on the presence of powerful investors. They are more investors than sugar daddies. They come with a project,” he said.
“The cumulated operating deficit has been reduced by 40 percent in the last four years, and is at its lowest point since 2010.”
2010 is significant as that was when the Top 14 enforced a salary cap on team payrolls, which is now 10 million euros.
If clubs fail to respect the cap or do not provide sufficient financial guarantees, they are punished by the DNACG, the financial ‘gendarme’ of the league, which in 2013 relegated Carcassonne from Pro D2 (second division) to Federale 1 (third division).
In the 2013-14 season, it also provisionally suspended five Perpignan players’ contracts, until it was presented with evidence that the clubs had the means to finance them.
That kind of control and increased money from TV rights have helped make most of the clubs more stable financially.
“The league has implemented several measures to make sure the business model is sustainable in the long term,” said Eschalier, before adding that clubs were now compelled to set aside five percent of their wage bill.
“TV rights have soared from 34 million euros in 2014 to 85 million euros in 2017,” he said.
In addition to financial controls, each French club must ensure that 55 percent of their players have spent three seasons at a French youth academy before the age of 21 or been registered with the French rugby federation (FFR) for at least five years before turning 23.
In effect that limits the import of foreign players, with officials hoping that the national team will eventually benefit from home-grown talent being given a chance to mature.
“No system is perfect and we don’t pretend that the Top 14 is but the French league is a reference in world rugby in terms of performance and there are only a few French sports championships that are in that position,” said Eschalier.
Leading French sports economist Christophe Lepetit agreed.
“Saying that French rugby is in a crisis of growth is wrong. It is in a phase of consolidation and the growth is going to be about 2-3 percent per year,” he told Reuters.
“Of course the salary mass is big but I am not too worried because the rugby officials have been addressing the problem.”
Reporting by Julien Pretot; Editing by Toby Davis