MPs issue damning report on ‘unsustainable’ Gallagher Premiership club finances, after Worcester, Wasps administrations | Rugby Union News

Amid annual losses averaging £4m per Premiership club, the DCMS committee said: “The deaths during the season of two Premiership clubs is a stain on the reputation of the RFU and the PRL. It does not reflect a healthy professional set-up. The finances of the situation are clearly unsustainable ”

MPs have issued reports on Premiership clubs’ finances ‘unsustainable’

MPs have warned the financial situation of Gallagher Premiership clubs is “clearly unsustainable” in a report into the problems facing the professional game in England.

The deaths of former top flight club Wasps and Worcester earlier this season have been described as a “stain on the reputation” of the Rugby Football Union and Premiership Rugby.

The Digital, Culture, Media and Sport (DCMS) committee said RFU chief executive Bill Sweeney and Premiership Rugby partner Simon Massie-Taylor held “very high confidence” that plans to increase revenue and increase collaboration would resolve financial problems amid annual losses. an average of around £4m per club.

Sweeney and Massie-Taylor appeared before a select committee in November after Wasps and Worcester went into administration – a fate which saw both clubs lose their Premiership status due to massive job losses.

The committee concluded that poor oversight from rugby union’s governing body contributed to Wasps and Worcester’s collapse, and criticized the “lack of safeguards at the highest level of the game” to prevent the problem.

“At Wasps, the dangerous and ill-advised relocation to Coventry, and the debt incurred to fund this, is ruining the club’s finances,” the report read.

“At Worcester Warriors, unscrupulous owners are managing the club’s finances while trying to liquidate the club’s assets.

The committee’s conclusions and recommendations include when the RFU publishes its next annual report, the government wrote to the committee with “detailed comments on the financial position and what steps will be taken to prevent clubs from collapsing further”.

The committee added: “The deaths during the playing season of two Premiership clubs is a stain on the reputation of the RFU and PRL. It does not reflect a healthy professional set-up.”

Worcester Warriors and Wasps went into administration and were relegated within weeks

“We welcome the reforms that have been planned to prevent similar incidents in the future, but such an alarming situation should not be necessary for the RFU and PRL to realize the need for such reforms.

“The financial situation of Premiership clubs is clearly unsustainable, and we are surprised by the strong belief of Bill Sweeney and Simon Massie-Taylor that further growth in club profits will solve the problem.”

On player welfare, MPs said the introduction of a benevolent fund was “an urgent need”, and the RFU should implement measures that give players a stronger say in all matters relating to welfare.

Damian Green MP, chairman of the committee’s committee, said: “Club rugby at the top of the game is no problem.

“The inert leadership of the RFU and PRL has allowed mismanagement to collapse two of England’s top rugby teams. Thousands of loyal fans have been deprived of their clubs and hundreds of jobs have been lost.

MP Julian Knight previously accused RFU chief executive Bill Sweeney of being asleep on the job, for failing to keep clubs like Worcester and Wasps.

“We welcome the raft of changes announced by PRL and RFU. Better safeguards and strong owners ‘and directors’ test is very needed. But it is incredibly disappointing that the two clubs have fallen to the rugby governing body to act.

“Worryingly, the root of the problem remains. Rugby clubs are still in debt and the RFU and PRL’s plans to boost income have not been done in the past and are unlikely to make a difference going forward.

“With the upcoming annual report, the RFU must demonstrate to the committee how it will protect the rest of the league from financial ruin.”

In response to the committee’s report, the RFU and Premiership Rugby issued a joint statement.

“Professional rugby clubs are businesses run by individuals,” he said.

“However, it is clear that the pandemic and the economic environment have revealed more and more the fragility of the professional system. Together, we are working hard to overcome these problems and create a sustainable league.

“Although commercial growth will be important, there is also a major focus on monitoring and financial management, as well as improving governance and some other fundamental elements that are important to attract future investment in the club game.

“Plans are in place for a financial monitoring panel where we conduct a third party financial review of all clubs and intend to announce an independent chair in due course.

“Player welfare is an absolute priority for all rugby stakeholders, and players are represented on the Professional Games Council, RFU Board and player welfare committees.”