STATEMENT: Government will step in to stabilise Premiership rugby
Rugby NewsFriday, 02 June 2023 at 15:09
In response to the dire financial crisis faced by rugby union and the imminent threat of London Irish becoming the third top-flight club to collapse, the Government has intervened to provide assistance.
Ralph Rimmer, the former Rugby Football League chief executive, and Chris Pilling, a board member of UK Sport, have been appointed to spearhead the efforts in reshaping rugby union's strategic financial and sporting direction.
As part of this collaboration, there are indications that the repayment of Covid loans may be reviewed and potentially renegotiated.
This step has been prompted by the tumultuous year of instability that rugby union has endured, with the looming possibility of another club facing its demise next Tuesday, coinciding with Irish's impending deadline.
Players and staff at the club requested the extension despite only receiving 50% of their May salaries.
The Exiles now have until 16:00 BST on Tuesday, 6 June to complete the takeover process or prove they can fund the club's operating costs for the entire 2023-24 season.
Their statement read: “The Government supports the RFU and PRL’s work to stabilise professional rugby union including attracting new capital investment,”
"It shares the concerns of fans about where the game goes next, and has appointed two independent advisers to work with the RFU and PRL on their plans to restructure the Professional Game Agreement.
“The issues at Worcester, Wasps and London Irish have laid bare the challenges facing the sport of rugby union.
"The inability of rugby clubs to raise capital investment and the financial challenges at various levels within the game have contributed to the need for urgent work to help secure rugby union’s immediate future and advise on its future direction.”
Sports Minister Stuart Andrew said:
This is a challenging time for rugby union and Ralph and Chris have agreed to utilise their experience to help the game develop a clear path for the future.
We have seen several high profile clubs and their fans left devastated in recent times and this additional independent advice will be of huge benefit to the RFU and PRL as they look to implement a new strategic direction for rugby.
Ralph Rimmer said:
I absolutely recognise the importance of this sporting pyramid to communities across the country.
List of the Premiership's five most at risk clubs makes worrying reading
All clubs in the Gallagher Premiership have been facing a concerning period, as highlighted by the Press Association News Agency's recent report.
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.
#1. LONDON IRISH - TEETERING
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. "
Rob Simmons of London Irish during the Gallagher Premiership match between London Irish and Leicester Tigers at The Gtech Community Stadium, London on 25 February 2023 (Photo: Danny Loo/PPAUK)
#2. WORCESTER WARRIORS - GONE
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."
#3. WASPS - GONE
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."
Wasps player Alfie Barbeary during the warm up before the Gallagher Premiership Rugby Match between Wasps and Sale Sharks at Ricoh Arena on 27 Mar. Photo: Steve Bond/PPAUK
#4. EXETER CHIEFS - SHAKY FOUNDATIONS
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."
Sam Simmonds of Exeter Chiefs on the break during the Aviva Premiership Match between Exeter Chiefs and Sale Sharks at Sandy Park, Exeter, Devon, England. - PHOTO: Tom Sandberg/PPAUK
#5. LEICESTER TIGERS - SHAKY FOUNDATIONS
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."
Jasper Wiese of Leicester Tigers celebrates with the Gallagher Premiership Rugby Trophy during the Gallagher Premiership Rugby Final Match between Leicester Tigers and Saracens at Twickenham Stadium on 18 June 2022. Photo: Tom Sandberg/PPAUK
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