This was the most distressing and upsetting day I’ve ever had in my career...
WASPS CHIEF EXECUTIVE OPENS UP ABOUT THE TEARS AND SHOCK WHICH FOLLOWED WASPS GOING TO ADMINISTRATION WTH 167 JOB LOSSES
STEPHEN Vaughan has opened up on events that led to Wasps going into administration and what happens next for the club after its darkest ever day.
Wasps Holdings Limited, the holding company for Wasps Men, Wasps Ladies, Wasps Netball, ceased trading with immediate effect on Monday, with Andrew Sheridan and Raj Mittal, partners at specialist business advisory firm FRP, appointed as joint administrators.
Players and staff were invited in to two meetings, one held at the club’s Henley-in-arden training ground base and the other at the Coventry Building Society Arena. It was here that it was announced that 167 employees were being made redundant – including all the playing and coaching staff,
Vaughan, the group’s chief executive, is himself among the casualties, losing his position with the club having joined from Premiership rivals Gloucester in 2019. Here he spoke to the Coventry Telegraph’s rugby writer Bobby Bridge...
Talk us through the meeting...
“It was the most distressing and upsetting day that I’ve had in my professional life. We had all the playing department group together in the room. We explained that despite lots and lots of conversations, hard work, working around the clock, we hadn’t got to a position where we had a bid for the rugby club in what was an acceptable fashion.
“Therefore, FRP, who are our administrators came and spoke to all of the squad and all of the support staff around what the next steps look like and the practical things. What actually has happened now? What redundancy means? What they can claim and what the next steps look like, obviously interjected with more practical matters, such as, what are the next steps for the squad.
“The guys wanted to know, will there be a Wasps next year? Will it be the Premiership? Will it be in the Championship? How do we play a part in that? We had the RPA here present as well. They were supporting the guys. We were in for a long, long time discussing things. There were lots of questions, lots of emotion in the room. This is peoples’ livelihoods, there’s a lot of people who are attached to Wasps. I won’t tell you the names but there’s a lot of very seasoned internationals in there, in tears. Lots of people really upset and emotional. It feels like a grieving process at the moment, we’re all going through it.
“We explained to the lads we are going to be recouping this week. We’re going to look at what life in the Championship would be like, we’re going to see if there is still the appetite. We still have ongoing conversations about what that might look like. Should people want to be a part of that, should we be successful in getting something in play, then if you give us a couple of days just to think about what that looks like.
“It was a really, really hard day. The emotion is still going on now. At 2pm we spoke, it’s 3.35pm and there’s still groups of people. We’ve all been offering support, hugging and chatting, working out what the next steps look like. Understandably, some people are moving forward positively, some people are in shock.
“It’s a wide range of emotions but it’s a very, very tough day.”
How did Wasps end up in administration?
“HMRC was effectively the trigger but it wouldn’t take a professor of economics to work out, since the business moved to Coventry it’s had an inordinate amount of debt hanging around its neck. When I was at Gloucester, there was often conversations about them [Wasps] becoming the biggest club in the world, the richest club in the world, all that rhetoric. But when I looked at the financial statements, they were always the highest losses of any Premiership club bar none, every single year. I had my eyes wide open when I came in.
“The debt was substantial, it’s only got bigger. When I first came into the organisation, we made a lot of changes in the playing department, we got Coventry Building Society in as the main arena partner, we brought Coventry City back to the stadium which has been fantastic. We’ve made million and millions of pounds worth of cost savings through this period. All of these things added up, any other club you would’ve solved all the issues and would be absolutely flying.
“Despite the gargantuan effort from me and my staff to bring the business into a better economic situation, sadly, it was a pebble in the ocean, because of the enormous debt that has been built over the years. Yes, there was the bond, but a number of things had been racked up as well.
“Before we went into Covid, we just had six months, probably for the first time in the club’s recent history, of trading and breaking even. So things were clearly going right at that point. Covid hit, sadly because of the enormous debt we’ve got, it’s like Covid was a sneeze and we caught a cold very, very quickly.
“We had to close the venue, effectively, so the concerts, the conferencing, the events, the hotel and the casino. It really accelerated the issues. Coming out of Covid and trying to reset was very, very difficult.
“The bond that we planned to refinance, we had been led down the aisle by a large high street bank who then left us high and dry. Therefore, it then became a situation where we had the bondholders to pay off, which didn’t happen. That then set confidence levels in the market to an alltime low. We had to try and manage our creditors and our debtors, in very difficult circumstances.
“That then becomes a self-fulfilling prophecy because you end up, it doesn’t matter how good you do on or off the pitch, your creditors become more aggressive with you, your debtors don’t want to pay you and HMRC were proof in kind, we have some amazing creditors we deal with who were very understanding of the wider situation, but unfortunately HMRC decided they wanted a big lumpy payment. Despite we were paying them every month, they wanted a catch-up of their debt and it was just too big. We don’t have a benefactor who puts money into the organisation, therefore that had to come out of working capital and we didn’t have the working capital to be able to do that.
“It’s nobody’s fault, we’ve done an incredible job in cutting costs, that’s had an impact on our marketing, on our matchday experience, we’ve been
very aware of that. At the same time, we had to do that to try and get this business through. But unfortunately we ran out of runway and we had to make decisions with the administration, in the hope we can rise again.”
How realistic is a takeover of the rugby operation now?
“We’re not allowed to talk about it as such because of NDAS etc, but it’s a small group of people, but there are a number of like-minded Wasps people that are also minded to look and see if there’s something we can do in the Championship.
“Getting down to the brass tacks now, we’ve got a very talented group of players, and a very talented group of young players coming through the system. They’ll need to know before too long what the situation is. I spoke to the group today, I explained to them as I have all the way through this, what’s going on and what the next steps are. I also asked them all, irrespective if they’ve had offers from other clubs or organisations, to try and give us a little bit of time if they’d like to stay within the group, I am firmly of the belief that most of them, if not all, are desperately keen to stay. But at the same time, they need to make sure they’re putting themselves and their families first.
“We understand completely that time is against us to keep the core of this squad together. It won’t be a protracted process, if something is happening, it’ll happen in the next few days.”
Is there any hope of playing Premiership rugby this year, if not, how can you keep the group together?
“It’s highly unlikely we are going to play in the Premiership this year.
“For a playing department perspective, we would want to contract the players who want to be here next season, and we can afford within the refined budget. But in that period of time, clearly they are free to do as they wish. To try and find a deal in the Premiership, the Championship, abroad, knowing that they had contracts to come back here ahead of the next year.
“It’s not ideal, in any shape or form, but it would be an option for those players if they wish.”
“This has been the toughest day in my adult professional career, I’ve met with the boys many times and the coaches umpteen times, the one thing, we’re not perfect, we’ve kept everybody up to speed. We’ve had some difficult conversations. We’re all sad, we’re all angry, including me.”