Premiership Rugby: A look back at a disastrously tumultuous campaign as Worcester Warriors, Wasps suffered; London Irish next? | Rugby Union News

Ahead of Saturday’s Gallagher Premiership final between Saracens and Sale Sharks at a sold-out Twickenham, we look back on a disastrously tumultuous and chaotic season for the health of English club rugby. 

It’s been a campaign in which two Premiership clubs in Worcester Warriors and Wasps experienced administration, enforced relegation and continue to face the threat of non-existence, while there are grave concerns for another in London Irish, and each and every club remains in differing levels of debt.

We detail below what has happened, when it has, how it has, and what the outlook appears…

Worcester the first card to fall; Extinction on the horizon?

Amid a general climate of Premiership rugby clubs plunged into millions of pounds of debt, August 2022 saw Worcester served a winding-up order by HMRC for unpaid tax.

Warriors played their opening game of the season vs London Irish on September 10, losing heavily 45-14, before releasing a statement on September 13, seeking to counter administration rumours, saying the club were in the final stages of being purchased by a new buyer and were at the last contract-signing phase.

However, no takeover was ever completed, and on September 15, the RFU issued an ultimatum to Worcester for 12pm the following day to confirm compliance for their Round 2 fixture at home to Exeter Chiefs. This was confirmed and the match went ahead on September 18, before the RFU issued the same ultimatum ahead of Worcester’s Round 3 clash at home to Newcastle Falcons – which once again saw compliance confirmed in time for their fixture on September 24.

Losing patience and with growing concern for the long-term situation of players and employees at the club, the RFU then requested Worcester provide evidence of long-term viability by 5pm on September 26.

This deadline was missed, and so Worcester – along with their women’s side – were suspended from the Premiership. Within hours, Worcester confirmed they were seeking to enter into administration.

On October 6, confirmation arrived that Worcester were relegated from the Premiership after their entry into administration, with results for their three fixtures in the 2022/23 season expunged from the record. At this point, notification arrived from the RFU that Worcester would play in the 2023/24 Championship season, subject to finding a new buyer.

New buyers arrived in the form of the Atlas consortium led by former chief executive Jim O’Toole and James Sandford, but there has been no happy ending as yet for Worcester, as on December 16, the RFU rejected the club’s plans for a return to England’s second-tier Championship, due to the « buyers selected by the administrators being unable to fulfil given conditions. »

The RFU have painted a clear picture that unless Worcester find alternative buyers, they will not be able to operate as a professional rugby club. Earlier this month, fresh long-term doubts came to light when it emerged Worcester’s owners took a 21-day £1.15m loan from new Wasps owner Chris Holland – more on them in a moment – in order to meet the RFU’s deadline and complete purchase.

Such a situation arose from the potential for Wasps to compete at Worcester’s home stadium, Sixways, but with this looking more and more unlikely, and the loan repayment due, Sixways may yet be sold for land redevelopment and Worcester’s takeover by Atlas will have been, essentially, for nothing. Extinction for a 152-year-old English rugby club established in 1871 may well, sadly, be next.

Wasps quickly follow suit

By the end of last season, on May 13, Wasps were due to pay a £35m finance bond they had taken out in 2015 to facilitate their move to Coventry’s CBS Arena.

Back in 2014, bondholders raised millions of pounds for Wasps to relocate to the West Midlands and purchase the CBS Arena in a first-of-its-kind scheme.

At £2,000 per bond, plus 6.5 per cent interest over a fixed seven-year period, money was secured to allow Wasps to move and own the stadium, but the date to repay bondholders came and went in May.

Rather than repayment, Wasps Finance PLC released a statement to the London Stock Exchange titled ‘Notice of Refinancing and Delay to Repayment’, where it was said the bonds were being refinanced by bank HSBC, and a new date of June 30 was given.

This came after approved amendments in November 2020 due to the fall in revenue caused by Covid-19.

June 30 came and went without bondholders being repaid too, as Wasps Finance PLC confirmed further delays to refinancing and a new date of August 12.

In late July, a statement released then confirmed Wasps were now « pursuing different refinancing options » parallel to discussions with HSBC.

By August 13, Wasps failed to refinance the bond, but owner Derek Richardson was bullish in response to media reports of an impending issue, commenting: « We are not in administration and we are not going to be. »

Yet, with assurances sought by the RFU unsatisfied, Wasps Holdings announced their intention to enter into administration due to financial difficulties on September 21, and after a second notice filed on October 4 and four games into the season, the RFU suspended Wasps from all competitions on October 12.

Wasps Holdings were formally entered into administration on October 17, with WRFC Players Ltd, the company responsible for payroll, entered into liquidation, immediately making all playing, coaching and employment staff redundant.

All results for the season were expunged, and Wasps’ formal relegation was confirmed with debts revealed at the club of some £95m.

An offer to purchase the club was accepted by administrators on October 30, and on December 16, the club was successfully sold and moved out of administration, with confirmation from the club coming that they would play in the 2023/24 Championship campaign, and rumours of a groundshare agreed with Solihull Moors football club.

On February 14, the RFU announced Wasps would be playing in the Championship next season after an application had been received following an extended deadline. But on May 18, this was revoked by the RFU, which stated certain agreed conditions had not been met.

The result of which, the RFU say, means Wasps will now move to the bottom of the rugby union playing pyramid in England.

« In order to be sure that Wasps were in a position to play in the Championship, the RFU set a deadline for the club to meet the commitments it had made when the licence was first approved and recommit to participating in the Championship in 2023/24. These included evidencing payment to rugby creditors and putting in place suitable governance structures including a majority independent board and a process for managing risk.

« The RFU was also concerned about the lack of progress engaging coaching staff and players. The club stated that it could not meet these commitments, recommit to participating in the Championship in 2023/24 or engage staff of players until further finance was secured. »

Worcester’s plight came in large part due to financial mismanagement from the top, while Wasps were severely hamstrung by the original financial deal which saw them relocate to Coventry.

Both had unpaid taxes, were sought after by HMRC, and larger financial cracks were exposed, resigning the clubs to administration.

London Irish the next card to fall?

Most recently, London Irish have been given a deadline of May 30 by the RFU for a takeover of the Premiership club to be completed or risk suspension.

The Exiles have been in protracted talks with an American consortium over a takeover, but that deal has yet to be finalised.

Seeking assurances that the club will be in a position to take its place in the Premiership for 2023/24 – and will be able to complete that season – the RFU wants one of the following resolutions by their May 30 deadline:

• A takeover of the club has been completed and approved by the RFU, with the buyers undertaking to provide all required working capital to meet the club’s obligations as they fall due for at least season 2023/24; or

• The club evidences that it will continue to be funded to operate throughout the 2023/24 season.

Employees of the club received their April pay a week late and the club had to cover their salaries, with payments eventually going through two days prior to their final match of the Premiership season against Exeter Chiefs last Saturday.

The players also demanded proof that their insurance premiums had been covered before taking to the field for that match.

The Brentford-based club concluded their campaign with a 17-14 win over Exeter and afterwards, director of rugby Declan Kidney struck an optimistic tone, but the lack of progress since is hardly promising.

Irish are £30m in debt and last year owner Mick Crossan said he would sell the club for a pound, if he could.

If the takeover does not happen, Crossan’s future investment and London Irish’s existence as a Premiership club would be in serious doubt, and they could be the third club, from a total of 13 professional outfits in England, to face relegation from the Premiership in less than a year.

A clear and visible disconnect | Salary cap changes need, greater responsibility and transparency

Like most sports, the Covid-19 pandemic hit rugby hard, with most unions and domestic leagues still in recovery mode from the revenue lost.

Yet, it is a head-scratcher all the same that during a period in which two of England’s 13 professional clubs entered into administration and were relegated from the Premiership, the RFU was able and willing to pay Eddie Jones a reported £800,000 in order to remove him, and then pay £1m to Leicester to appoint Steve Borthwick.

It’s a disconnect, in clear terms, between the club and international game: Jones was the highest-paid coach in the whole of world rugby while Worcester Warriors and Wasps – the latter four-time Premiership winners and two-time European champions – were crippled with debts and nearing the end.

Over 200 professional rugby players and staff in England were made redundant overnight. A truly dreadful situation and look for the sport in the country. Indeed, one MP later accused RFU CEO Bill Sweeney of being « asleep on the job » while such a crisis was occurring.

« A failure of the game on an epic scale, » was another comment to come out from Julian Knight MP at the Digital, Culture, Media and Sport Select Committee.

Unlike successful systems in New Zealand and Ireland, where club sides fall under the international unions with regards to finance and future planning, the RFU and Premiership have always been very much separate. Events this season must surely change that?

Premiership clubs throughout the country, irrespective of success or otherwise, are riddled with debts.

As authors Michael Aylwin and Mark Evans wrote in their 2019 book Unholy Union, « football was not a solvent industry until it became so big it could not fail to make money ». Rugby union, commercially, is nowhere near the stratospheric numbers football is, and never will be.

The Premiership, as Aylwin and Evans have posited, has found itself in a circumstance where its clubs were and are « daring each other to ever greater heights of expenditure ».

In a persistent and constant battle between wages and revenue, wages have almost always been shown to have accelerated and increased.

The cumulative losses of Premiership clubs in the first 25 years of the competition stand at more than half a billion pounds. A staggering statistic.

Clubs have seen wage bills of £9m per year, but an average of just £4m brought in per club from match ticket sales.

In response to the pandemic and with sustainability in mind, the Premiership reduced its yearly player salary cap per club to £5m from £6.4m for the start of the 2021/22 season. But for two clubs in Worcester and Wasps, and maybe a third, it came too late.

In fact, according to the Daily Mail, half of the Premiership’s 13 clubs are currently in huge financial difficulty. And all of them are in debt. The cap, in original plans, is set to return to £6.4m in 2024, though clubs are thought to be in discussions to keep it at £5m. And this, in terms of long-term health, would appear a necessity.

« Can I understand a very wealthy club wanting to get that stardust sprinkled in, as they see it, and increase the cap? Yes, I can, » Leicester chief executive Andrea Pinchen has said. « Personally I don’t think that is right for the game as we sit here now today. »

As former England centre Will Greenwood told Sky Sports back in October: « The wage bill and salary cap is too high and with it needs to be joint governance and independent auditors.

« The French do it in terms of Pro D2 and Top 14, so there’s real independent oversight of clubs – if clubs look like they are in hot water with overspending compared to what they are bringing in, they can be warned and told to cut their cloth.

« In the race to be the best, win European Cups, compete at the highest level, clubs [in England] have leveraged and taken on debt. Eventually debt needs to be paid back and when debt becomes really expensive people come calling on your door for it. »

Scrapping plans for the salary cap to be raised back to £6.4m per season, and the introduction of independent regulators and ordinance of club finances would appear imperative steps to take.