Wasps suspended from Premiership and set to enter administration ‘within days’
The Premiership has been plunged deeper into crisis with Wasps suspended and moving to the brink of relegation after revealing they are set to go into administration. The move comes less than a week after Worcester’s fate was sealed, leaving the league two clubs down barely a month into the season.
Wasps’ match against Exeter on Saturday has been cancelled, in effect because they had run out of money to operate, and, as was the case with Worcester, they have been suspended from the Premiership. As per Rugby Football Union, relegation is expected to be confirmed when administration materialises “in the coming days” for one of England’s most storied clubs.
It is understood Wasps players and staff were informed of the club’s imminent fate at a meeting at their training base at lunchtime on Wednesday with no guarantees over whether they would be paid October’s wages. If the company that holds their contracts enters administration it is expected that players could terminate their contracts immediately. If not, they can give 14 days’ notice once payday has come and gone.
It leaves Premiership Rugby in the desperate position of trying to complete the season with 11 teams. Furthermore, it is believed senior figures harbour concerns over another club’s financial outlook. PRL did not intend to redraw its fixture list despite Worcester’s departure from the league but that stance will surely change now and equally pressing will be remodelling the domestic structure.
Wasps had bought themselves time to find fresh investment by twice filing notice of intention to appoint administrators but while they have a handful of interested parties – including the former Newcastle United owner Mike Ashley – none appears either able or willing to conclude a deal before Monday’s deadline. Wasps owe £2m to HMRC and £35m to bondholders as part of the scheme that financed their move to Coventry, were the recipients of a government pandemic bailout and are in debt to the tune of nearly £20m to the owner, Derek Richardson.
RFU regulations dictate that Wasps will be relegated to the Championship for next season when administration is confirmed, with a senior source confirming that they will be treated in the same way as Worcester despite Lawrence Dallaglio’s plea on Sunday. Like Worcester they will be able to appeal against the decision and attempt to prove a “no-fault insolvency” while Wasps’ suspension will be lifted “if they are able to demonstrate the means and commitment to pay rugby creditors”.
A statement from Wasps Holdings Limited read: “It has become clear that there is likely to be insufficient time to find a solvent solution … and it is therefore likely that they will enter into administration in the coming days with a view to concluding deals shortly thereafter … We have been asking potential funders and investors to provide bridging finance to provide enough time for a solvent solution to be found. Regrettably, this has not been possible to date, although we will continue to pursue this until the very last opportunity.”
Wasps remain confident of securing investment after administration, though some suitors are interested in the stadium, complete with casino and hotel, but not the club. Any sale is also likely to be protracted – not least with the RFU under pressure to carry out due diligence. If Wasps are allowed to hold on to their P share, which guarantees central funding, they would be a more attractive proposition for investors but it is understood there is feeling within the league that is unlikely.
“In light of the current situation, we have therefore taken the decision to withdraw the Wasps men’s team from this Saturday’s league fixture against Exeter Chiefs,” continued the statement from Wasps. “This was an extremely difficult decision … however, we strongly believe it is the right course of action when, at this time, we are unable to meet our regulatory requirements in the absence of fully concluded deal negotiations.
“We understand that this news will be disappointing and concerning for everyone involved. Our immediate focus will be on ensuring that all of our players and the staff of Wasps and the arena are fully updated and given the support they need. While these are challenging times, we remain confident that new owners will be found that will allow the clubs and businesses within the group to move forward.”