"Close to following" - The RFU could be set for more trouble with clubs

Rugby Football Union faces critical challenge as 'Premiership 2' plans endanger second-tier teams.

In a concerning development for the future of the second tier of rugby, Simon Halliday, the newly appointed chairman of the league, has issued a warning to the Rugby Football Union (RFU). Funding cuts imposed by the RFU have pushed Championship clubs to the brink, endangering their very existence.

The RFU, in collaboration with Premiership Rugby, has expressed plans to introduce a rebranded 'Premiership 2' in the 2025-26 season. However, Halliday has sounded the alarm, cautioning that there may not be enough clubs willing and able to participate in the new division. This concern arises from a significant reduction of approximately 80 percent in funding, leaving Championship clubs struggling to maintain their operations.

The financial setback faced by Championship teams began in 2020 when their funding was initially reduced from £600,000 to £288,000. Unfortunately, this decrease was further slashed to around £160,000 under the guise of a temporary measure in response to the Covid-19 pandemic.

Regrettably, this reduction has since become deeply entrenched, severely compromising the stability of the clubs. After accounting for insurance and travel costs, most clubs find themselves left with meager funds, barely surpassing £50,000.

Consequently, several teams have been compelled to abandon their full-time programs, and others are now contemplating following suit.

“You cannot kick the can down the road any more,” Halliday told Telegraph Sport.

“There is no more road left because clubs are on the brink. You have to be worried about how some clubs have been able to do it themselves without any help.

"These are not poorly managed clubs, in any sense, but they have to know why they are continuing to put money in.

"If you don’t take care of them then you create the ultimate disconnect between the professional and community game and I don’t think you can ever get it back.”

An investigation conducted earlier this season revealed the dire financial crisis engulfing English rugby, with Premiership clubs accumulating debts exceeding £500 million.

Furthermore, a thorough analysis of the clubs' latest financial accounts unveiled that Premiership clubs collectively owed more than £36 million in taxes, with only two out of the 13 clubs having a positive balance with the HMRC.

Outlined below is an examination of the current situation of five clubs, and the findings are deeply concerning.

PA wrote: "Burdened by debts of around £30million and with an owner desperate to sell in Mick Crossan, London Irish are shaping up to become the next club to be removed from the Premiership.

All staff must be paid on Wednesday for the month of May for the Irish to be granted a deadline extension for their proposed takeover by an American consortium. "

PA wrote: "The first club placed into administration back in September, Worcester’s future is still uncertain despite being taken over by Jim O’Toole’s Atlas Group.

"Entrance into the second-tier Championship has been blocked by the RFU for their failure to meet certain conditions and their plan of joining with Stourbridge and relaunching in the fifth tier appears dead in the water."

PA wrote: "The month after Worcester folded, Wasps followed them into administration as the league suffered the crushing blow of losing one of English rugby’s most famous brands.

"Further misery was to come as having targeted rebirth in the Championship, the failure to meet certain conditions forced the RFU to revoke their license and demote them to the foot of the rugby pyramid."

PA wrote: "Even Exeter, one of the few clubs in the pre-pandemic era to operate at a profit, were forced to take special measures in December.

"Chiefs owner Tony Rowe bought a stake in a hotel owned by the club in order for it to service its debts, including covid loans issued by the Government. Rowe’s intervention has shored up the finances for the time being."

PA wrote: "Leicester needed an emergency cash injection of £13m from directors Peter Tom and Tom Scott to address what chief executive Andrea Pinchen described as “very challenging conditions”

"A letter from the club to shareholders sent in March stated that if the funding was not approved, there would be no option but to appoint administrators."