Wasps into administration

The Rugby Football Union has rejected applications from Wasps and Worcester Warriors not to impose automatic relegation on them for entering administration.

The RFU announced its board had ratified a recommendation from its Club Financial Viability Group that its so-called ‘no fault insolvency’ clause should not apply to the demise of the two clubs, who were thrown out of the Gallagher Premiership in October.

The administrators for both teams made applications – in hope rather than expectation – for them to be spared relegation to the Championship, citing the impact of the coronavirus crisis as the primary reason for them becoming insolvent.

But the RFU found Wasps’ administrators provided “insufficient evidence” and those for Worcester had not established “on the balance of probabilities” that there had been no fault on the part of the clubs or their directors.

Stating it had not been provided with correspondence between either team and HM Revenue & Customs “despite several requests”, the governing body added in the case of both clubs: “While there may be possibility that the insolvency events may not have happened were it not for the Covid pandemic, that is not the same as to say there was no fault by the club.

“The directors of the club had allowed the club to be in such a precarious position that a shock such as Covid, the challenging debt markets or another external event would have created a real and increased likelihood of an insolvency event happening.”

Bill Sweeney, RFU chief executive, said: “We are all deeply concerned by the insolvency of Worcester Warriors and Wasps rugby clubs. We appreciate this decision will be disappointing for the clubs and their fans but it’s clear from the Club Financial Viability Group’s investigation that there were factors beyond Covid that resulted in the clubs entering insolvency. This has reinforced the need for greater financial transparency between clubs, Premiership Rugby and the RFU to enable both organisations to have better visibility of how these businesses are run.

“We are already working on plans with Premiership Rugby to explore how to improve the structure, governance and business model of rugby union in England and support the clubs in becoming more sustainable. We are pleased that both clubs’ women’s teams have been able to continue and that the academy pathway in the midlands continues to give opportunities to young players.”

Both clubs have the right of appeal to an independent panel but Telegraph Sport has been told neither plan to contest the RFU decision.

Wasps and Worcester’s prospective new owners have been progressing with their rescue bids on the basis they will start next season in the Championship.