Troubled USA Rugby files for bankruptcy

USA Rugby have filed for Chapter 11 bankruptcy after running into financial trouble.

The governing body Stateside were already battling financial challenges as a result of overspending in 2019.

And the sudden, unexpected loss of income as a result of the sport grinding to a halt amid the coronavirus pandemic made those challenges ‘insurmountable.’

Earlier this month, USA Rugby suspended all rugby activity to fall in line with government advice with regards to social distancing.

That suspension has resulted in ‘significant loss of revenue from spring and summer membership dues, sponsorship drawbacks and additional revenue sources.’

“This is the most challenging period this organization has faced and all resolves were never taken lightly in coming to this determination,” noted USA Rugby Chair, Barbara O’Brien,

“While the current climate is of course much larger than rugby, we remain focused with stakeholders and supporters in the continued effort toward a balanced rugby community where the game can truly grow.”

Significant staff and budgetary reductions will now be required throughout the organisation and the headquarters are now operating with a condensed staff.

A Chapter 11 bankruptcy will allow USA Rugby to remain in existence and its leadership to remain in position as the organisation reshapes and plots a new way forward.

World Rugby will support a financial package that will allow USA Rugby to reform its governance and finances.

The men’s and women’s sevens and XVs teams will continue to compete as normal.

There will be worries throughout the rugby world that this could be a sign of things to come with all nations experiencing a similarly unexpected loss of income at this time.

English rugby is awash with paycuts and Australian rugby is in a particularly dark hole having just posted a loss of $9.4million, with players Down Under bracing to be hit in the pocket.

It’s looking increasingly unlikely that European nations will be able to travel south for their traditional summer tours, which will lead to further financial woe.

Closer to home, there are considerable fears throughout Welsh rugby with regards to the financial implications of the sport’s unanticipated hiatus.

Last week, the Welsh Rugby Union were seeking a conversation with the Welsh Government to discuss what sort of financial help could be on offer.

There is talk of paycuts hitting the professional game in Wales and fears community clubs could go to the wall.