London Irish have been served a winding-up petition by HM Revenue and Customs as the financial crisis deepens for the stricken Premiership club.
On another sobering day for English rugby union, the Government announced that it would be stepping in to help the Rugby Football Union and Premiership Rugby to work towards sustainability in the professional game after a disastrous year that seems certain to witness the demise of three top-flight clubs.
Irish face being suspended from competition next Tuesday unless they can demonstrate that they can be funded through next season, either by the US consortium purportedly interested in buying them or by their existing ownership.
On Friday, a winding up petition from HMRC over unpaid tax added to that tension. London Irish Rugby Ground Limited, London Irish Holdings Limited and London Irish Scottish Richmond Limited have all been identified as part of the petition.
All three of these companies count Adrian Alli, the club’s interim chief executive, and owner Mick Crossan as directors and list their respective addresses in Sunbury-On-Thames.
While not terminal to the business in itself, and different to a winding-up order, the issue of these winding up petitions follow an ominous trend. Worcester Warriors went into administration last September after months of uncertainty over the payment of wages, which foreshadowed a winding up petition.
London Irish employees have been paid only half of their wages for May, having also had to wait to receive their salaries for April. The latter arrived only two days before the club’s final match of the Premiership season against Exeter Chiefs when Crossan stepped in to stump up the cash as players were about to hand in breach-of-contract letters.
Irish nearing its final June 6 deadline
The timing of the crisis is particularly brutal on players and staff because finding onward destinations will not be easy. Many teams, both in the Premiership across the French Top 14, are finished with their recruitment for next season and tied by salary cap constraints of their respective competitions. Having granted a week-long extension at the request of Irish players and staff, the RFU has stressed that their June 6 deadline is final.
Hours before the news of the Irish winding-up petition emerged on Friday, it was announced that Ralph Rimmer, the former Rugby Football League chief executive, and Chris Pilling, a board member of UK Sport, have been appointed to help rugby union “reshape its strategic financial and sporting direction”. Telegraph Sport understands the repayment of Covid loans could be examined, and perhaps renegotiated, as part of this collaboration.
“The Government supports the RFU and PRL’s work to stabilise professional rugby union including attracting new capital investment,” read a statement from the Department for Culture, Media and Sport. “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.”
Government may offer financial lifeline
The statement also suggested that the Government would be “taking further action to further protect its investment on behalf of taxpayers” after providing “a financial lifeline to keep elite and grassroots rugby afloat during the pandemic”.
Rimmer and Pilling will work closely with CVC as well as the RFU and PRL, reporting directly to Lucy Fraser, the secretary of state for culture, media and sport. Rimmer served as the chief executive of the RFL between 2018 and 2022, a period that saw him secure a 12-year strategic partnership with IMG.
IMG is bidding to grow rugby league with some radical policies. One of these is a grading system that appears likely to govern promotion and relegation to and from the Super League from 2024, where organisations will be marked out of 20 on factors besides performance. These include fandom, finances, their stadium and their prominence within the local community. This could chime with Telegraph Sport’s revelation last month that Wasps are being considered for a franchise place in the Championship as the RFU and PRL ponder ways to strengthen the second tier below what is expected to end up as a 10-team Premiership.