English Premiership side Worcester are set to be placed into administration after they were suspended from all competitions by the Rugby Football Union on Monday for failing to meet a funding ultimatum.
Worcester are burdened by debts totalling more than £25-million ($26.5m), including at least £6m in unpaid taxes, with growing anger expressed towards owners Colin Goldring and Jason Whittingham, who have been accused of asset-stripping the club.
A statement from the RFU said the owners had failed to meet a deadline of 4pm GMT on Monday to provide proof of insurance cover and funding for the monthly payroll and were also missing a “credible plan to take the club forward”.
“The RFU has therefore suspended Worcester Warriors from all competitions, including the Gallagher Premiership … with immediate effect,” it added.
Worcester confirmed they have applied to the UK government’s department of media, culture media and sport (DCMS) to place the club in administration.
“Worcester Warriors can confirm that WRFC Trading Limited, the company that owns the Worcester Warriors Premiership rugby club, has today asked DCMS to place the club into administration,” the club said in a statement.
“DCMS will now apply to the court to appoint administrators.
“As negotiations with possible investors have still not led to critically needed funding, administration is seen as the best solution to safeguard the interests of the business and ensure the best chances of a solution that saves the club.”
In a statement the DCMS said it has agreed to the administration request “to give the club the best possible chance of survival, and to protect a significant taxpayer investment”.
RFU CEO Bill Sweeney acknowledged the decision taken by the sport’s governing body was “incredibly difficult news for fans, staff and players”.
“We met with players and staff last week to explain why this action would be necessary and regrettably without assurances in place we have had to take this action to protect everyone’s best interests,” he said.
Sweeney said he hoped a buyer could be secured to allow the club to return to professional rugby, saying that the RFU would seek to learn from the situation to address broader financial problems in English club rugby.
“While it is the responsibility of each business owner to manage their individual finances, we will look at learnings from this situation to see what regulation can be put in place to provide all parties with more financial transparency,” he added.
Worcester are not the only one of the Premiership’s 13 clubs facing potential financial collapse.
Wasps, twice European champions, announced last week their intention to appoint administrators after failing to meet a May deadline to repay £35m in bonds, which helped finance their relocation to Midlands city Coventry from London in 2014.
There are fears Worcester and Wasps represent the tip of an iceberg, with the collective debts of all Premiership clubs estimated at more than £500m.
Last week, Worcester rugby director Steve Diamond said: “We have been in this period of near-purgatory for a while now, and it is starting to come to a head.
“I don’t know how it has got to this position. It is sad, and it is diabolical that it has been allowed to walk itself to the graveyard, virtually, and I never thought it would get to this position, but it has.”
The club’s Sixways Stadium is now closed – staff were given until Monday afternoon to collect belongings – with no indication when, or if, it will reopen.
Worcester are third from bottom of the Premiership table after one win from their opening three games. They beat struggling Newcastle 39-5 on Saturday.
Premiership Rugby confirmed Saturday’s league match between Gloucester and Worcester has been postponed.
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Photo: David Rogers/Getty Images
