Efforts to give English top-flight rugby stronger financial foundations will be accelerated in the wake of the crises facing Wasps and Worcester, the chief executive of Premiership Rugby has said.
The Gallagher Premiership, England’s flagship domestic competition, is in meltdown after the two clubs were suspended amid financial difficulties which threaten their existence.
Wasps said on Wednesday it was now “likely” they would enter administration, having already withdrawn from this weekend’s Premiership match against Exeter.
It is understood Wasps would need to reapply for their current suspension to be lifted if they can demonstrate means and commitment to pay rugby creditors, and their only hope of avoiding following Worcester out of the Premiership if they go into administration would rest on them proving a “no fault” solvency event because of the global pandemic.
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Worcester have been suspended from Premiership action for the rest of this season, with relegation to follow, after the club’s partial liquidation.
The crisis has reignited the debate over sustainability at the top level and Premiership Rugby is now examining a range of options to strengthen clubs’ financial resilience, which will include giving consideration to the structure of the league and the visibility of clubs’ financial information.
The organisation’s chief executive Simon Massie-Taylor said: “As well as supporting efforts to find a long-term sustainable future for both Wasps and Worcester, it is our responsibility to set a more sustainable path for English club rugby.
“This was on the agenda already, but we need to now accelerate the work we are doing with our clubs, the Rugby Football Union, and other stakeholders across the game.
“Our shared goal must be to put in place stronger foundations that underpin the long-term prosperity for the sport in this country.”
Massie-Taylor acknowledged this was a “desperate time” for Wasps’ players, staff and fans, adding: “This is more than a business in difficulty, it’s a community in distress and one that is an integral part of the wider rugby family.”
Wasps Holdings Limited recently confirmed a second notice of intention to appoint administrators had been filed, revealing talks were at “a relatively advanced stage” with possible investors in the face of a winding-up order from HM Revenue and Customs for £2 million (€2.3 million) in unpaid tax.
Wasps also face having to repay a £35 million (€40 million) bond which had helped finance the club’s relocation to Coventry during 2014.
A joint statement from Premiership Rugby and the RFU said those organisations would continue to work with Wasps and an administrator, once appointed, to support efforts to secure a long-term future for the club.
RFU chief executive Bill Sweeney said the news around Wasps was “very sad for English rugby” and added: “Two professional clubs facing financial difficulties is a clear barometer of the challenges being felt by the economy, sport and rugby union specifically.
“The economic environment has compounded these challenges and there is a clear need for more financial transparency from all clubs together with collective long-term investment and planning for the benefit of the professional game overall.”
Exeter’s director of rugby Rob Baxter earlier suggested that a 10-team Premiership could be the best way for the league to thrive in the future.
“I thought it was madness to go to 13 [teams],” Baxter said. “Going to 13 in a weird kind of way almost signed a warrant for someone to not be able to stay in there.
“Before anything else it doesn’t make any common sense and it wrecks the calendar anyway.
“A league of 10 home and away, with their international commitments and a cup competition for the guys not involved in internationals, starts to sound very common sense.”
Sports finance expert Kieran Maguire believes the sport has been reluctant to address soccer’s commercial dominance in England.
Maguire, a lecturer from the University of Liverpool Management School, said: “Rugby is still a relatively new professional sport and in many aspects it’s being run in an amateur way in terms of cash flow and cost control and governance, all the dull words that get accountants excited.
“I know rugby fans would be upset about rugby being called a minority sport, but football is too successful. It takes too many of the column inches and too much of the broadcasters’ focus, because it delivers in terms of eyeballs.
“That’s a challenge – how does rugby increase its income streams and control costs? I think there’s a reluctance to address that.”