March 21, 2017

March 21, 2017

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March 20, 2017

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Racing 92 and Stade Francais: Merging Rugby Clubs – What Happens Next?

The Six Nations provides rugby fans with a couple of months every year packed to the rafters of rugby-related issues to talk about. This year in particular provides even more analysis fodder with a group of the best British and Irish players touring New Zealand to take on the mighty All Blacks in the summer.  Debate will rage for months as to who should get a place in the Lions squad.

In fact, there are so many stories and analysis pieces flying round at this time of year that some can stray under the radar in terms of headline space. However, an interesting story has arisen in France this week that will no doubt gain some traction.

It has been announced that two of the major rugby union clubs in France’s top division (the Top 14) are to merge from next season.  Racing 92 and Stade Francais, both based in Paris, are the winners of the last two seasons of the Top 14 and competed for the first ever French Championship in 1892.  They are now aiming to combine forces and resources next season, subject to the approval of the French National Rugby League (the LNR).

Racing and Stade are two of the oldest and most successful clubs in French rugby history, with playing squads liberally sprinkled with star attractions (particularly Racing’s, currently home to Dan Carter). In French rugby terms, it is a little like news breaking in England that Manchester United and Manchester City are deciding to merge and become Manchester Athletic!  Oddly enough, it is said that this was suggested back in the 60’s although the Athletic moniker was creative licence on my part.

Currently, there is little solid information as to how the logistics of this will work. A merger between such major clubs begs a huge number of questions, with just a few being:

  • Which players will be retained in the squad?

  • Which coaches will be retained?

  • Where will the club play?

  • What will the club be named?

  • What colours/badge will be used?

However, some information is starting to filter through. The deputy chairman of Stade has already hinted at how players may be chosen for the squad, suggesting that players will be playing for contracts when the two sides meet in the league next month.  It appears that this announcement has not been taken particularly well by some players so far (who it seems had no idea that a merger was being discussed), with news that the Stade squad is now on strike and calling for their supporters to rally together.  As a result, the LNR have had to call an emergency meeting for the end of the week.  Stade could well be docked points or even face relegation should the strike continue.

With French clubs subject to a €10m salary cap and, from next year, a limit on the number of squad players ineligible to play for France (no more than 16), there are going to be a number of players facing redundancy and looking for new clubs come the end of the season, if not testing the waters already.

A further issue arises with the merger being announced before the clubs are due to meet again in the league – conflict of interest.  It is likely that at least one of the clubs will still have something to play for by the time they meet towards the end of the season (most likely Racing attempting to qualify for the European competition).  Questions will inevitably be asked if one of the clubs requires a win and gets one, while the other has little to play for.

The questions clearly extend beyond the two clubs themselves to the implications the merger would have on the league as a whole. A merger will leave one extra place in the Top 14.  Currently, the bottom two clubs are relegated to the second division, with two being promoted.  However, if there is one extra place, should one of the relegated teams have a stay of execution?  Should the higher placed team in the Top 14 relegation places get the benefit of the doubt?  Early reports suggest that the extra place will be filled by a play-off or the offer of an extra promotion place from the second division.

This is certainly not the first time that two sporting clubs have merged nor is it the first time that controversy has been generated by major changes to established rugby clubs (for example, the introduction of the Welsh regions in 2003).  However, it is rare that a merger takes place between such major and (recently) successful clubs.  There is little doubt that the fallout will continue and it remains to be seen whether the LNR will approve the merger.  However, if approval is granted, the legal, commercial and sporting implications of this merger could have far-reaching consequences for club rugby worldwide.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Christopher Lynn, Squire Patton Boggs, London Labor Lawyer
Associate

Chris Lynn is an associate in our Labour & Employment practice group based in our London office. He trained with Squire Patton Boggs, completing seats in Corporate, Litigation and Pensions. Chris also undertook two secondments, firstly at a leading British motorsports team where he supported the legal department and also at a major retailer where he worked alongside the HR and Policy team. He is involved in the Japan Desk, an initiative to provide tailored advice and support for Japanese businesses in the UK, including seminars and networking events.

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