English club rugby is reeling after it was revealed that Wasps have joined Worcester in fighting for their survival amid the threat of administration.
Just hours after Worcester’s owners were set the deadline of 5pm on Monday to prove they are able to lift Sixways out of crisis or face suspension from all competitions, Wasps filed a notice of their intention to appoint an administrator with the High Court.
The Warriors’ financial difficulties have been played out in public for the last two months, but the sudden escalation of the turmoil at the CBS Arena has caused shockwaves on a bleak day for the Gallagher Premiership.
Both clubs are being pursued for unpaid tax and have been served with winding-up orders by HMRC, raising the very real prospect that the top flight could be reduced from 13 to 11 clubs within a matter of weeks.
Wasps are also having difficulty in repaying the £35million bond that was raised to help finance their relocation from High Wycombe to Coventry in 2014.
While confident they will secure the finance needed to prevent administration, failure to do so could result in automatic relegation from the Premiership.
However, the Rugby Football Union has the discretion to reduce or waive any sanction if the insolvency was deemed to be beyond the control of the club, including in circumstances such as a pandemic.
— Premiership Rugby (@premrugby) September 18, 2022
“Due to the impending threat of action from HMRC, Wasps Holdings Limited has taken the difficult decision to file a notice of intention to appoint administrators in order to protect its interests,” a statement from Wasps Holdings Limited read.
“This measure does not mean the business is in administration but provides a crucial period of grace to continue negotiations with a number of interested parties to secure the long-term future of the group.
“These negotiations have been going on for some time, are in advanced stages and we are hopeful of securing a deal.
“In the meantime, the day-to-day operations of the business are unaffected and we will continue to support our players, staff, supporters, bond holders and suppliers. We will keep them fully updated during what we appreciate will be an unsettling time.”
Worcester, meanwhile, have until the evening of September 26 to provide the Rugby Football Union with evidence that they possess the required insurance, are able to meet payroll and have a “credible plan to take the club forward”.
They are burdened by debts totalling over £25million, including at least £6million in unpaid tax, amid growing anger felt towards owners Colin Goldring and Jason Whittingham, who have been accused of asset stripping the club.
In addition, they must prove by 12pm on Thursday that they can stage Saturday’s Premiership match against Newcastle after last Sunday’s first home appearance of the season only took place because of the efforts of staff, many of whom have not been paid their salaries for August.
If Worcester fail to provide the assurances over financing and insurance sought by the RFU, they have been told that suspension could lead to full removal from all leagues.
It is the most dramatic development in the saga to date as patience runs out with owners Goldring and Whittingham, who have yet to sell the club to a new buyer despite repeated claims that a deal is imminent.
While there is no doubt over Wasps’ ability to fulfil their fixture against Bath on Friday night, the prospect of one of England’s most successful clubs going out of business will alarm the Premiership amid concerns that other teams could also be in trouble.