Executive Chairman Tony De Mulder believes that the club has a solid legal case that will affect the Premiership Rugby Limited’s proposal on promotion and relegation.
The Knights remain against ring-fencing, while a compromise has been offered that would see the Premiership increased from 12 clubs to 13 and the side that finishes bottom in the top divison then face both home and away the Championship champions for the final spot.
Tony spoke below on the latest proposal in an interview with Dave Craven from the Yorkshire Post.
There are 13 Premiership Rugby Limited shareholders, including promoted London Irish and Newcastle Falcons who have just been relegated.
Each receives ‘P Shares’ – even when in the second tier – which significantly outweighs anything Championship clubs receive from central funds and makes the task for ambitious clubs like Doncaster, Cornish Pirates and Ealing almost impossible.
PRL would like to get plans in place for 2019-20 with the new season having a delayed start in October due to the World Cup.
“In a way their current idea is still partially ring-fencing considering the funding of the team that’s coming down,” De Mulder told The Yorkshire Post.
“The ‘P Shares’ system for founding members of the PRL in our opinion – and our lawyers’ opinion – is a cartel, or a monopoly, at least.
“The Championship clubs have had that legal advice; it’s been conveyed to PRL.
“For years now we have been asking PRL for us to actually see the P Shares agreement. They have still refused to give it to us.
“In our lawyer’s opinion, number one, the P Share is absolutely devastating for any (non-PRL) Championship club who gets into the Premiership because of the lack of funding.
“The other is anyone who comes down from the Premiership has then also got a huge advantage over the other Championship clubs.
“We get £600,000 from the RFU, part of which is for stadium development and community work, not just for paying players.
“What the Premiership clubs get is in the millions and a huge difference in the funding.
“The sort of body we’d go to is the Competition Markets Authority. We’d present our case to them who would then hopefully take it on board.
“Those guys have a lot of power. They have the power to make businesses – and it (PRL) is a business – alter what they are doing.
“Most Championship clubs spend at least £1m on their squads alone. You’d want something along those lines and it should be made fair if we are going to take this (deal) on.”
And, after private equity firm CVC Capital Partners invested more than £200m into Premier Rugby in December – for a 27 per cent share – De Mulder feels the Championship is now in a better bargaining position.
“For the first time, in this latest negotiation, the Championship has importance,” he said.
“Before we had little clout. They could tell us what they like.
“But now they have CVC coming in, putting in vast amounts of capital, things are different and the CVC have grandiose ideas of getting a good say in all matters in all leagues in Europe and leading onto the Six Nations as well.
“Okay, the Championship is a small cog in that wheel, but we feel that for the first time we have an important role – and that is to protect promotion and relegation. We are safeguarding it.
“There could be another Exeter. At Doncaster we nearly made the Premiership (in 2016) although, I think, if we’d have got there, we’d have come straight down again because of this unfair funding situation.
“Our negotiation will contain lots of elements of this kind to make the funding fairer for promoted clubs.”
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