Following the financial collapses of Premiership Rugby clubs Worcester Warriors and Wasps, the parliamentary committee for Digital, Culture, Media and Sport (DCMS) have released a statement, warning the Gallagher Premiership clubs that they’re financial situations are “clearly unsustainable.”
The dissolvement of the two Premiership clubs has had a damaging impact on numerous jobs. The publishing committee highlight the instability of the professional game in England, and referred to the situation as “a stain on the reputation” of the RFU and Premiership Rugby governing bodies.
“The demise during the season of two Premiership clubs is a stain on the reputation of the RFU and PRL. It is not indicative of a healthy professional set-up. The financial situation is clearly unsustainable” the statement reads.
Worcester Warriors announced their administration in September of last year, with Wasps following suit the following month. This tragedy has come in due part to the Covid-19 pandemic, and the financial strain the clubs took, having to play the games in empty stadiums, and postpone or cancel fixtures due to positive cases of the virus.
The average financial problems per club, resulted in a accrued reported loss of approximately £4m, for both Worcester and Wasps. The upkeep was far too high, with the clubs unable to pay their player’s and staff’s wages and run the stadium facilities, among other expenses.
The majority of both club’s players have found new homes, such as Worcester’s Ted Hill and Ollie Lawrence signing long-term at Bath, and Wasps stars Jack Willis and Joe Launchbury moving on to Toulouse and Harlequins respectfully. However, there have been numerous jobs lost from each club, from the back-room staff to match day stewards, the impact of these clubs dissolvements is immense, with the DCMS calling for this to be recognised, and changed
Read the full report from The Telegraph here.
Three clubs in trouble:
Harlequins
They wrote: “They borrowed £48m in FY21, maybe through £50m on the back of FY22. If you look at operating profit per employee, they are paying £60,000 per employee and going backwards. It’s the structure of the business – big property investments, borrowings.”
London Irish
They wrote: “They have never made a profit, have £30m worth of borrowings. It’s one club that’s potentially at high risk because of very low turnovers, at best in a good season of £10m.”
PREMIERSHIP CLUBS RANKED BY TOTAL DEBT:
#13. Exeter Chiefs – £13m
#12. Gloucester – £27m
#11. Northampton Saints £26.5m
#10. Worcester Warriors – £26.5m
