The financial demise of Worcester Warriors and Wasps is a “stain
on the reputation” of the Rugby Football Union (RFU) and
Premiership Rugby Limited (PRL), MPs say today, in a report that
concludes that poor oversight from the sport’s governing bodies
contributed to the clubs’ collapses.
The DCMS Committee criticises a “lack of safeguards in place at
the highest levels of the game” to prevent the issues seen at
Wasps and Worcester Warriors. When Worcester Warriors collapsed,
accounts had not been filed for more than a year, with reports of
player salaries being paid late from May, while problems at Wasps
had been mounting for years.
The report concludes that, at Wasps, debt from a disastrous and
ill-though-through relocation to Coventry crippled the club
financially. At Worcester Warriors, unscrupulous owners
mismanaged club finances while attempting to strip the club of
its assets. Neither the RFU nor the PRL intervened despite Colin
Goldring being barred from working for any legal firm without the
explicit permission of the Solicitors Regulation Authority.
While the Committee welcomes reforms aimed at preventing problems
for clubs in the future, the report raises concerns about the
future of Premiership finances, warning that the financial
situation of Premiership teams is “clearly unsustainable” with
annual losses averaging about £4 million per club. MPs are
critical of the RFU and PRL’s “complacent belief” that their
plans to increase revenues and improve collaboration will solve
rugby’s financial problems.
DCMS Committee Acting Chair MP said: “Club
rugby at the top of the game is in disarray. Inert leadership
from the RFU and PRL has allowed mismanagement to collapse two of
English rugby’s top teams. Thousands of loyal fans have been
deprived of their clubs and hundreds of jobs have been lost.
We welcome the raft of changes announced by the PRL and RFU.
Better safeguards and a stronger owners’ and directors’ test are
desperately needed. But it’s incredibly disappointing that two
clubs had to collapse for the rugby governing bodies to act.
More worryingly, the root of the problem remains. Rugby clubs
are still spiraling into debt and the RFU and PRL’s current
revenue boosting plans haven’t done enough in the past and are
unlikely to make a difference going forward. With its upcoming
annual report, the RFU must demonstrate to the Committee how it
will protect the rest of the league from financial ruin.”
Main conclusions and recommendations
- The financial situation of Premiership clubs is
unsustainable. Further growth in club revenues is unlikely to
solve these problems.
- The demise of two Premiership clubs is a stain on the
reputation of the RFU and PRL. The planned reforms are welcome,
but such alarming circumstances should not have been necessary
for the RFU and PRL to act.
- It is vital that player welfare becomes the central concern
of the authorities going forward, with the introduction of a form
of benevolent fund a pressing need.
- When the annual report is published that the RFU must write
to the DCMS Committee with a detailed commentary of its financial
position and what steps it will be taking to ensure that other
clubs don’t face similar crises.
The Committee took evidence from the RFU,
Premiership Rugby and others in November.
