The Gallagher Premiership is facing growing chaos with Wasps looking to appoint an administrator – which could see them relegated – and Worcester given a Monday deadline by the Rugby Football Union to show evidence of a credible long-term financial plan.
Wasps responded to a threat on Wednesday by HMRC of a winding-up order over unpaid tax by warning they would apply for administration, raising the possibility of the club being automatically relegated from the top flight.
However, they later claimed in an internal memo to staff that serving notice of intention to appoint an administrator was “not the same as entering into administration” and it would give them more time to sort out their finances.
The club’s financial future has been under scrutiny ever since a deadline was missed in May to repay £35 million back to bondholders who invested in the club in 2015 to buy the Coventry Building Society Arena, after Wasps moved its home from High Wycombe.
Wasps released a statement at the start of September announcing that a refinancing offer had been received which would have seen bondholders repaid, suggesting that discussions with a lender were “at an advanced stage”.
The club went through a recruitment freeze earlier this year which led to them missing out on key off-season signings, while a number of high-profile players also departed this summer including Malakai Fekitoa, Jimmy Gopperth and Va’ea Fifita.
The RFU’s regulations stipulate that any club entering administration during the course of a season faces the prospect of automatic relegation from the Premiership.
‘An unsettling time for all involved’
On Wednesday Wasps, both behind-the-scenes and publicly, tried to make clear the distinction between serving notice of intention to adjunct an administrator and entering administration. The first option, they said, means that “the club and business can continue to trade whilst it finalizes its negotiations with regards to the refinance package which the board have been working on”.
The memo continued by reassuring staff that salaries would be paid as normal, adding that board members and the club’s restructuring partner would be present at the club’s training ground today to answer questions.
“Clearly this is an unsettling time for all involved, however, at this present moment in time there is no change to daily operations and we have been informed that there is no reason why salaries due next week should not be paid as expected. What this process will do is protect the business in the short-term, to give it an opportunity to complete the refinance process.”